Navy Awards $298M Cost-Plus Contract to Electric Boat for Submarine R&D

Contract Overview

Contract Amount: $298,391,667 ($298.4M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 1996-12-17

End Date: 2014-02-12

Contract Duration: 6,266 days

Daily Burn Rate: $47.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199712!1700!1635!BZ002!NAVAL SEA SYSTEMS COMMAND !N0002495C2103 !A!*!P00017 !19961217!19970930!963737366!963737366!001381284!N!96196!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !0001!+000039082000!N!N!000000000000!AC33!RDTE/SHIPS-ADV TECH DEV !A3 !SHIPS !2SDN!SUBMARINE NUCLEAR-SSN !3731!3!*!*!C!B!A!*!D !N!U!1!001!N!3A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $298.4 million to ELECTRIC BOAT CORPORATION for work described as: 199712!1700!1635!BZ002!NAVAL SEA SYSTEMS COMMAND !N0002495C2103 !A!*!P00017 !19961217!19970930!963737366!963737366!001381284!N!96196!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LO… Key points: 1. The contract, valued at $298,391,667, is for research, development, testing, and evaluation related to submarine advanced technology. 2. Electric Boat Corporation, a sole-source provider for certain submarine programs, secured this award. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 4. This spending falls under the 'RDTE/SHIPS-ADV TECH DEV' category, indicating investment in future naval capabilities.

Value Assessment

Rating: questionable

The contract value of $298M is substantial for R&D. Without specific deliverables or benchmarks, assessing value for money is difficult. The CPFF structure carries inherent risk of cost escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This limits price discovery and potentially increases costs for the government.

Taxpayer Impact: The absence of competition for this significant R&D contract may result in taxpayers paying a premium for the developed technologies.

Public Impact

Investment in advanced submarine technology ensures continued naval superiority. Long-term contracts with sole-source providers can impact budget predictability. The CPFF structure requires robust oversight to ensure efficient use of funds. This award supports high-skilled jobs in Connecticut's defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Cost-Plus Fixed Fee contract type carries cost overrun risk.
Long contract duration (1996-2014) may not reflect current needs or pricing.
Lack of detailed R&D scope makes value assessment difficult.

Positive Signals

Supports critical advanced technology development for submarines.
Awarded to a known, experienced contractor in the submarine sector.
Contract duration suggests a long-term strategic investment.

Sector Analysis

This contract falls under the Research, Development, Testing, and Evaluation (RDTE) for Ships, specifically advanced technology development for submarines. Defense R&D spending is crucial for maintaining technological superiority, but often involves high costs and long development cycles.

Small Business Impact

There is no indication that small businesses were involved in this contract, as it was awarded directly to Electric Boat Corporation on a sole-source basis.

Oversight & Accountability

The long duration of this contract (from 1996 to 2014) necessitates strong oversight to ensure that funds were used effectively and that the project remained aligned with evolving defense needs.

Related Government Programs

Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee (CPFF) contract type is prone to cost overruns.
Long contract duration (1996-2014) raises questions about current relevance and potential for outdated technology.
Lack of detailed R&D scope makes value assessment difficult.
Significant contract value without clear competitive benchmarks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $298.4 million to ELECTRIC BOAT CORPORATION. 199712!1700!1635!BZ002!NAVAL SEA SYSTEMS COMMAND !N0002495C2103 !A!*!P00017 !19961217!19970930!963737366!963737366!001381284!N!96196!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !0001!+000039082000!N!N!000000000000!AC33!RDTE/SHIPS-ADV TECH DEV !A3 !SHIPS !2SDN!SUBMARINE NUCLEAR-SSN !3731!3!*!*!C!B!A!*!D !N!U!1!0

Who is the contractor on this award?

The obligated recipient is ELECTRIC BOAT CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $298.4 million.

What is the period of performance?

Start: 1996-12-17. End: 2014-02-12.

What specific technological advancements were achieved through this $298M contract, and how do they compare to the initial objectives?

The contract focused on advanced technology development for submarines. Without specific project details and post-completion reports, it's challenging to quantify the exact advancements. However, given the duration and funding, it's expected to have contributed to enhancements in areas like stealth, propulsion, or combat systems, maintaining the US Navy's technological edge.

Given the sole-source nature and CPFF structure, what mechanisms were in place to mitigate cost overruns and ensure fair pricing?

Sole-source awards inherently limit competitive pressure on pricing. For CPFF contracts, robust government oversight, including detailed cost audits, performance monitoring, and negotiation of fixed fees, is crucial. The effectiveness of these mechanisms would depend on the diligence of the contracting officers and the transparency of Electric Boat's cost reporting throughout the contract's extensive lifecycle.

How does this investment in submarine R&D align with current and future naval strategic priorities, considering the contract's original award date?

Awarded in 1996, the contract's alignment with current priorities requires evaluation. While foundational R&D often has long-term benefits, the rapid evolution of technology and geopolitical landscapes means that R&D initiated decades ago may need significant adaptation or may have been superseded. Continuous assessment of R&D portfolios is essential to ensure relevance and maximize return on investment.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: General Dynamics Corp

Address: 75 EASTERN POINT RD, GROTON, CT, 06340

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline