Navy Awards $104M Cost-Plus Contract to Huntington Ingalls for Ship Maintenance

Contract Overview

Contract Amount: $104,277,325 ($104.3M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 1999-10-29

End Date: 2001-09-30

Contract Duration: 702 days

Daily Burn Rate: $148.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $104.3 million to HUNTINGTON INGALLS INC for work described as: Key points: 1. Significant contract value of $104.3 million awarded. 2. Contract awarded via 'Not Competed' method, raising questions about competition. 3. Risk associated with cost-plus contracts where final costs can exceed estimates. 4. Spending falls within the Defense sector, specifically ship maintenance.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to higher final costs than fixed-price contracts. Without specific performance metrics or benchmarks for similar ship maintenance, it's difficult to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This lack of competition may have limited price discovery and potentially led to a higher price than could have been achieved through a competitive process.

Taxpayer Impact: The absence of competition suggests taxpayers may not have received the best possible price for these ship maintenance services.

Public Impact

Taxpayers may be paying more than necessary due to lack of competition. The long duration of the contract (702 days) for maintenance raises questions about efficiency. Dependence on a single contractor for critical maintenance could pose a risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Long contract duration

Positive Signals

Contract awarded to a known entity (Huntington Ingalls)
Specific service area (ship maintenance)

Sector Analysis

This contract falls within the Defense sector, specifically focusing on ship maintenance. Spending benchmarks for similar maintenance contracts are highly variable based on ship type and complexity, but $104 million for a 702-day period warrants scrutiny.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a large corporation like Huntington Ingalls suggests a focus on established, large-scale providers.

Oversight & Accountability

The 'Not Competed' designation suggests limited transparency in the procurement process. Further oversight would be needed to ensure the justification for sole-sourcing was valid and that the pricing is reasonable.

Related Government Programs

Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns due to contract type
Limited transparency in procurement
No clear indication of small business participation
Long contract duration for maintenance services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $104.3 million to HUNTINGTON INGALLS INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $104.3 million.

What is the period of performance?

Start: 1999-10-29. End: 2001-09-30.

What was the specific justification for awarding this contract on a sole-source basis, and was it adequately documented?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent and compelling needs. Adequate documentation would include a detailed explanation of why other sources were not considered or were unable to meet the requirements.

How does the final cost of this contract compare to the initial estimates and the value derived from the services provided?

Assessing the final cost against estimates and value is crucial for cost-plus contracts. Without access to the final expenditure and a detailed breakdown of services rendered, it's impossible to determine if the $104 million was a fair price. Post-award reviews and performance metrics are key to evaluating the true value.

What measures were in place to ensure the efficiency and effectiveness of the ship maintenance performed under this contract?

Effectiveness is typically measured through performance standards, quality control checks, and timely completion of tasks. For a cost-plus contract, oversight is critical to ensure the contractor is performing efficiently and not incurring unnecessary costs. The government should have had technical representatives monitoring the work closely.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline