Navy awards $963.7M contract to Electric Boat Corp. for submarine development and advanced technology

Contract Overview

Contract Amount: $577,040,763 ($577.0M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 1999-05-28

End Date: 2015-05-18

Contract Duration: 5,834 days

Daily Burn Rate: $98.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200511!000154!1700!N62789!SUPERVISOR SHIPBUILDING CONVERSI!N0002499C2900 !A!N! !N!6105 !1A !20050829!20040131!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !+000002380000!N!N!000000000000!AC33!RDTE/SHIPS-ADV TECH DEV !A3 !SHIPS !258 !SSN 21 !336611!E! !3! ! !J! ! !20200930!B! ! !N!Z!D!U!J!1!001!N!3A!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! !1760!N62789!0001! !

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $577.0 million to ELECTRIC BOAT CORPORATION for work described as: 200511!000154!1700!N62789!SUPERVISOR SHIPBUILDING CONVERSI!N0002499C2900 !A!N! !N!6105 !1A !20050829!20040131!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW … Key points: 1. Contract awarded for advanced technology development in shipbuilding, focusing on submarine advancements. 2. Significant portion of funding allocated to research, development, testing, and evaluation (RDT&E). 3. Long-term contract duration suggests a sustained need for specialized shipbuilding expertise. 4. Sole-source award indicates a lack of readily available alternatives or unique capabilities required. 5. Contractor has a long-standing relationship with the Navy for submarine construction and maintenance. 6. Geographic concentration of work in Connecticut may have local economic implications.

Value Assessment

Rating: fair

The contract value of $963.7 million over its duration appears substantial, but a direct comparison to similar advanced submarine technology development contracts is challenging due to the specialized nature of the work. The cost-plus-fixed-fee (CPFF) pricing structure means that actual costs could exceed the initial estimate, with the contractor incentivized to control costs to achieve the fixed fee. Benchmarking the value requires a deeper dive into the specific technological advancements and their associated development costs within the defense sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Electric Boat Corporation, was solicited. This typically occurs when a specific capability is unique to a single provider, or when urgent circumstances preclude full and open competition. The lack of competition means that the Navy did not benefit from price discovery through multiple bids, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not have received the most competitive pricing. Without competitive bidding, there is a risk that the awarded amount is not the lowest possible cost for the required services.

Public Impact

The primary beneficiaries are the U.S. Navy, which receives advanced technology for its submarine fleet, enhancing national security. The contract supports the development of cutting-edge technologies for submarine platforms, potentially including propulsion, stealth, and combat systems. The work is concentrated in Groton, Connecticut, impacting the local workforce and economy in the New London area. This contract sustains specialized jobs in naval engineering, design, and advanced manufacturing within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness for taxpayers.
Cost-plus-fixed-fee structure carries inherent risk of cost overruns if not closely managed.
Long contract duration requires ongoing oversight to ensure performance and value.
Concentration of work in a single geographic location could pose supply chain risks.
Lack of public detail on specific technological advancements makes independent value assessment difficult.

Positive Signals

Contractor has a proven track record and extensive experience in submarine development for the Navy.
Focus on advanced technology development is crucial for maintaining naval superiority.
Long-term nature of the contract provides stability for critical R&D efforts.
The contract supports a vital component of national defense infrastructure.
The award is tied to specific, high-priority defense objectives.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on advanced shipbuilding and submarine technology. The market for highly specialized submarine development is limited, with Electric Boat Corporation and Huntington Ingalls Industries (via its Newport News Shipbuilding division) being the primary domestic players. Spending in this area is driven by national security requirements and the need to maintain a technological edge in undersea warfare. Comparable spending benchmarks are difficult to establish publicly due to the classified nature of much of this technology.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Given the highly specialized and advanced nature of submarine technology development, it is likely that the prime contract is awarded to a large, experienced defense contractor. However, Electric Boat Corporation, as a major defense contractor, would typically be expected to engage small businesses as subcontractors for various components and services, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy, likely through the Supervisor of Shipbuilding, Conversion and Repair, and potentially the Naval Sea Systems Command (NAVSEA). The Inspector General of the Department of Defense would also have jurisdiction to investigate fraud, waste, and abuse. Transparency is limited due to the defense-sensitive nature of the work, but contract performance, cost reporting, and milestone achievements would be subject to regular review.

Related Government Programs

Virginia-class Submarine Program
Columbia-class Submarine Program
Advanced Undersea Technologies R&D
Naval Ship Systems Engineering
Defense Research and Development

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration
High dollar value
Defense sector - sensitive technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $577.0 million to ELECTRIC BOAT CORPORATION. 200511!000154!1700!N62789!SUPERVISOR SHIPBUILDING CONVERSI!N0002499C2900 !A!N! !N!6105 !1A !20050829!20040131!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !+000002380000!N!N!000000000000!AC33!RDTE/SHIPS-ADV TECH DEV !A3 !SHIPS !258 !SSN 21 !336611!E! !3! ! !J! ! !202

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 $577.0 million.

What is the period of performance?

Start: 1999-05-28. End: 2015-05-18.

What is Electric Boat Corporation's historical performance record with the Department of the Navy, particularly on submarine development contracts?

Electric Boat Corporation has a long and established history of building submarines for the U.S. Navy, dating back over a century. They are the primary builder of attack submarines (SSNs) and are responsible for the construction of the new Columbia-class ballistic missile submarines (SSBNs). Historically, their performance has been critical to maintaining the Navy's undersea fleet. While specific performance metrics on individual contracts are often not publicly disclosed, the continued awarding of major, sole-source contracts suggests a high level of confidence from the Navy in their capabilities and reliability. Challenges in large defense programs are not uncommon, but Electric Boat's role as a sole or primary provider indicates a strong, albeit sometimes complex, working relationship with the Navy.

How does the value of this contract compare to other major submarine development programs or similar R&D efforts within the Department of Defense?

The $963.7 million awarded to Electric Boat Corporation for advanced technology development in shipbuilding is a significant sum, reflecting the complexity and long-term nature of submarine R&D. To provide a precise comparison, one would need to identify contracts with similar scopes, such as the development phases of new submarine classes or major technology insertion programs. For instance, the overall cost of developing a new class of submarines can run into billions of dollars. This $963.7 million contract likely represents a substantial portion of the R&D funding for specific advanced capabilities or a critical phase of a larger submarine modernization effort. Without access to detailed program breakdowns and classified R&D budgets, direct apples-to-apples comparisons are challenging, but the amount is consistent with the high-cost, high-technology nature of advanced naval platforms.

What are the primary risks associated with a sole-source award for advanced defense technology development?

The primary risk associated with a sole-source award for advanced defense technology development is the potential for reduced cost-effectiveness. Without competitive bidding, the government may not achieve the lowest possible price for the goods or services. This can lead to higher expenditures for taxpayers. Another risk is a potential decrease in innovation or urgency, as the contractor may face less pressure to optimize performance or efficiency compared to a competitive environment. Furthermore, sole-source contracts can sometimes mask inefficiencies or allow for less rigorous scrutiny of costs and performance, although robust oversight mechanisms are intended to mitigate this. The reliance on a single provider also creates a risk if that contractor experiences significant financial, technical, or operational difficulties.

What specific advanced technologies are likely being developed or advanced under this contract?

While the specific details of advanced technologies developed under defense contracts are often classified, this contract's focus on 'SUPERVISOR SHIPBUILDING CONVERSI' and 'RDTE/SHIPS-ADV TECH DEV' suggests development in areas critical to future submarine capabilities. This could include advancements in quieter propulsion systems (e.g., next-generation nuclear reactors or alternative power sources), improved sonar and sensor technologies for enhanced detection, advanced materials for stealthier hulls, modernized combat systems and weapons integration, cyber resilience for underwater platforms, and potentially artificial intelligence applications for navigation, threat assessment, or operational efficiency. The goal is typically to maintain or enhance the U.S. Navy's strategic advantage in undersea warfare.

What is the historical spending trend for submarine development and advanced shipbuilding technologies by the Department of the Navy?

Historical spending by the Department of the Navy on submarine development and advanced shipbuilding technologies has been consistently high, reflecting the strategic importance and immense cost of these platforms. Major submarine programs, such as the Virginia-class attack submarines and the upcoming Columbia-class ballistic missile submarines, represent multi-billion dollar investments over decades. Funding for Research, Development, Test, and Evaluation (RDT&E) related to undersea warfare and shipbuilding is a significant component of the Navy's budget. While specific figures fluctuate based on program lifecycles (e.g., peak R&D funding during initial design versus procurement funding for established classes), the overall trend indicates sustained, substantial investment necessary to maintain a modern, capable submarine fleet and technological superiority.

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: General Dynamics Corp (UEI: 001381284)

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

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline