Navy Awards $174.7M Contract for Destroyer Ship Building and Repair

Contract Overview

Contract Amount: $42,196,918 ($42.2M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 1999-10-01

End Date: 2014-10-24

Contract Duration: 5,502 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: 200002!1700!000311!BS795 !SUPERVISOR SHIPBUILDING CONVERSI!N0002494C2800 !A!*!A00751 !19991001!20001001!174786913!174786913!001922749!N!97514!LITTON SHIPBUILDING INC !1000 ACCESS RD !PASCAGOULA !MS!39568!55360!059!28!PASCAGOULA !JACKSON !MISS !0001!+000000371352!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !3731!3!*!*!C!B!A!*!A !Y!L!2!002!N!3A!A!N!C!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39568, UNITED STATES OF AMERICA

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $42.2 million to HUNTINGTON INGALLS INCORPORATED for work described as: 200002!1700!000311!BS795 !SUPERVISOR SHIPBUILDING CONVERSI!N0002494C2800 !A!*!A00751 !19991001!20001001!174786913!174786913!001922749!N!97514!LITTON SHIPBUILDING INC !1000 ACCESS RD !PASCAGOULA !MS!39568!55360!059!28!PASCAGOULA !JAC… Key points: 1. The contract is for the construction and repair of DDG-51 class destroyers. 2. The primary contractor is Litton Shipbuilding Inc., with Huntington Ingalls Incorporated listed as a successor. 3. The contract was awarded under full and open competition after exclusion of sources. 4. The total value of the contract is $174,786,913. 5. The contract duration is 5502 days, spanning from 1999 to 2014.

Value Assessment

Rating: good

The contract value of $174.7 million for destroyer construction and repair appears reasonable given the complexity and scale of naval shipbuilding. Benchmarking against similar large-scale defense contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition after exclusion of sources, indicating a competitive bidding process. This method generally promotes price discovery and ensures fair market value.

Taxpayer Impact: The competitive nature of the award suggests that taxpayer funds were likely used efficiently, securing a fair price for critical naval assets.

Public Impact

Supports national defense by ensuring the availability of modern naval vessels. Contributes to the shipbuilding industry and associated supply chains. Provides employment opportunities in the shipbuilding sector, particularly in Mississippi. Ensures the U.S. Navy maintains its fleet readiness and technological superiority.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to cost overruns if not managed effectively.
Potential for scope creep over the extended period of performance.
Reliance on a single primary contractor for a critical defense asset.

Positive Signals

Awarded through full and open competition.
Supports a key component of national defense.
Long-term commitment to fleet modernization.

Sector Analysis

This contract falls within the Defense sector, specifically naval shipbuilding. Spending in this area is typically high due to the complex engineering, materials, and labor involved in constructing and maintaining warships.

Small Business Impact

While the primary contractor is a large entity, the extensive nature of shipbuilding contracts often involves a significant supply chain, potentially creating opportunities for small businesses as subcontractors.

Oversight & Accountability

The Department of Defense and Department of the Navy are responsible for oversight. The long duration necessitates robust program management and regular performance reviews to ensure accountability and adherence to contract terms.

Related Government Programs

Ship Building and Repairing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Long contract duration increases risk of cost escalation.
Potential for contractor performance issues over an extended period.
Dependence on a single prime contractor for critical defense assets.
Complexity of shipbuilding can lead to unforeseen technical challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.2 million to HUNTINGTON INGALLS INCORPORATED. 200002!1700!000311!BS795 !SUPERVISOR SHIPBUILDING CONVERSI!N0002494C2800 !A!*!A00751 !19991001!20001001!174786913!174786913!001922749!N!97514!LITTON SHIPBUILDING INC !1000 ACCESS RD !PASCAGOULA !MS!39568!55360!059!28!PASCAGOULA !JACKSON !MISS !0001!+000000371352!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !3731!3!*!*!C!B!A!*!A !Y!L!

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $42.2 million.

What is the period of performance?

Start: 1999-10-01. End: 2014-10-24.

What was the rationale for excluding specific sources during the 'full and open competition after exclusion of sources' process?

The exclusion of sources in a 'full and open competition after exclusion of sources' award typically implies that certain vendors were deemed not to meet specific technical, capability, or security requirements necessary for the contract. This ensures that only qualified entities participate, maintaining the integrity and feasibility of the project while still allowing for broad competition among eligible firms.

How did the fixed-price incentive (FPI) contract type influence cost control and contractor performance?

A Fixed Price Incentive (FPI) contract aims to share cost risks and benefits between the government and the contractor. It establishes a target cost, target profit, and a price ceiling. If the final cost is below the target, both parties share in the savings. If it exceeds the target, the contractor bears a larger portion of the overrun up to the ceiling. This structure incentivizes the contractor to control costs while meeting performance specifications.

What are the long-term implications of this contract on the Navy's fleet modernization strategy?

This contract is crucial for the Navy's fleet modernization by ensuring the continued production and maintenance of the DDG-51 class destroyers, a cornerstone of its surface combatant force. The long duration suggests a sustained commitment to this platform, impacting shipbuilding capacity, future procurement plans, and the overall readiness and technological edge of the Navy's fleet for decades.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc (UEI: 967362331)

Address: 1000 ACCESS RD, PASCAGOULA, MS, 39567

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline