Navy awards $22.1M engineering services contract to Electric Boat Corporation for shipboard integration

Contract Overview

Contract Amount: $22,141,883 ($22.1M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2024-05-01

End Date: 2029-04-30

Contract Duration: 1,825 days

Daily Burn Rate: $12.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: INSTALL FOR SHIPBOARD INTEGRATION INC 8

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $22.1 million to ELECTRIC BOAT CORPORATION for work described as: INSTALL FOR SHIPBOARD INTEGRATION INC 8 Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits competitive pressure, potentially impacting price efficiency. 3. Long contract duration of 5 years suggests a significant, ongoing need. 4. Focus on shipboard integration points to critical naval infrastructure support. 5. The contractor, Electric Boat Corporation, has a substantial history with the Navy. 6. The contract's value is moderate within the context of major defense procurements.

Value Assessment

Rating: fair

The contract's cost-plus-fixed-fee structure inherently carries higher risk for cost escalation compared to fixed-price contracts. Benchmarking the value is challenging without detailed cost breakdowns, but the per-year value of approximately $4.4 million for specialized engineering services appears within a reasonable range for complex defense projects. However, the lack of competition means there's no direct market comparison to ensure optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Electric Boat Corporation, was solicited. This approach is typically used when a unique capability or specialized expertise is required, or when only one responsible source exists. The absence of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple firms had bid.

Taxpayer Impact: For taxpayers, a sole-source award means there is less assurance that the government secured the best possible price for the services rendered, as competitive bidding was bypassed.

Public Impact

The primary beneficiaries are the U.S. Navy, receiving critical engineering support for its vessels. Services delivered include specialized engineering for shipboard integration, crucial for naval operations. The geographic impact is primarily centered around Electric Boat Corporation's facilities in Connecticut, where the work is likely performed. This contract supports a highly specialized workforce within the defense industrial base, particularly in naval engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee contract type introduces cost overrun risk.
Long contract duration may not reflect evolving technological needs.
Lack of transparency on specific cost drivers due to sole-source nature.

Positive Signals

Award to a known, experienced contractor (Electric Boat Corporation) reduces performance risk.
Focus on critical shipboard integration ensures support for essential naval assets.
Contract duration provides stability for specialized engineering resources.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's naval segment. The market for specialized naval engineering, particularly for complex integration projects on submarines and surface vessels, is dominated by a few key players with the necessary security clearances and expertise. Electric Boat Corporation is a major entity in this niche. Comparable spending benchmarks are difficult to establish due to the specialized nature, but large defense contracts for ship systems integration can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature and the specialized capabilities of Electric Boat Corporation, it is unlikely that significant subcontracting opportunities for small businesses will be mandated or readily available, unless Electric Boat proactively seeks them for specific components or services outside its core expertise.

Oversight & Accountability

Oversight will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are tied to the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency may be limited due to the sole-source award, with public visibility into specific cost elements being restricted. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Systems Engineering
Submarine Construction and Modernization
Defense Engineering Services
Shipboard Combat Systems Integration
Naval Vessel Maintenance and Modernization

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost escalation
Limited public price transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.1 million to ELECTRIC BOAT CORPORATION. INSTALL FOR SHIPBOARD INTEGRATION INC 8

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 $22.1 million.

What is the period of performance?

Start: 2024-05-01. End: 2029-04-30.

What is Electric Boat Corporation's track record with the Department of the Navy, particularly on similar integration contracts?

Electric Boat Corporation (EBC) has a long and established history as a prime contractor for the U.S. Navy, particularly renowned for its role in designing and constructing nuclear-powered submarines. EBC has consistently been awarded large, complex contracts for submarine construction, modernization, and maintenance. While specific data on 'shipboard integration' contracts as a distinct category is not detailed here, EBC's core business involves extensive integration of complex systems (propulsion, weapons, sensors, life support) into naval platforms. Their track record generally indicates successful delivery on highly technical and demanding projects, though like any major defense contractor, they have faced scrutiny over cost and schedule on certain programs. This specific contract likely leverages their deep expertise in integrating systems onto naval vessels, building upon decades of experience.

How does the $22.1 million contract value compare to similar shipboard integration engineering services for naval vessels?

Comparing the $22.1 million value requires context regarding the scope and duration. This contract spans five years, averaging approximately $4.4 million annually. For specialized engineering services related to shipboard integration on naval vessels, this value can be considered moderate. Larger, more complex integration projects, especially those involving new platform development or major refits of capital ships (like aircraft carriers or large destroyers), can easily run into hundreds of millions or even billions of dollars. However, for specific integration tasks on a particular class of vessel or for a defined set of systems, $4.4 million per year is a significant but not extraordinary amount. The lack of competition makes a direct value-for-money assessment difficult, but it's within the expected range for specialized defense engineering support.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for shipboard integration?

The primary risks are twofold. First, the sole-source nature means the Navy did not benefit from competitive bidding, potentially leading to a higher price than could have been achieved in an open market. There's less incentive for the contractor to aggressively control costs when competition is absent. Second, the cost-plus-fixed-fee (CPFF) structure means the contractor is reimbursed for allowable costs plus a negotiated fixed fee. While the fee is fixed, the total cost to the government can escalate if the contractor's costs increase beyond initial estimates. This structure shifts much of the cost risk to the government and requires robust oversight to ensure costs are reasonable and allocable. For complex integration projects where unforeseen technical challenges are common, CPFF contracts can lead to significant cost growth.

What is the expected effectiveness of these engineering services in supporting the Navy's operational readiness?

The effectiveness hinges on the specific integration tasks being performed. If these services are crucial for integrating new technologies, upgrading existing systems, or ensuring the seamless operation of multiple subsystems on board naval vessels, then their effectiveness directly translates to enhanced operational readiness. Successful integration ensures that weapons systems, sensors, communication equipment, and propulsion work harmoniously, which is vital for mission accomplishment. Given that Electric Boat Corporation is a long-standing, specialized contractor, the expectation is that they possess the technical acumen to deliver effective solutions. However, the effectiveness is ultimately measured by the successful deployment and performance of the integrated systems in real-world naval operations.

How does this contract's spending pattern compare to historical Navy spending on shipboard integration and engineering services?

Historical Navy spending on shipboard integration and engineering services is substantial and cyclical, often tied to shipbuilding programs and modernization efforts. Annual spending can fluctuate significantly based on the number and size of new construction projects, major refits, and technology insertion programs. While this specific $22.1 million contract is a single award, the Navy collectively spends billions annually on engineering services, systems integration, and platform support. This contract represents a portion of that larger expenditure. Without access to detailed historical spending data specifically for this type of integration work across the fleet, it's difficult to pinpoint precise historical patterns. However, it aligns with the Navy's continuous need for specialized engineering support to maintain and upgrade its complex fleet.

What are the implications of the 5-year duration (1825 days) for technological relevance and contractor performance?

A five-year contract duration for technology-focused engineering services presents both opportunities and risks. On the positive side, it provides stability and allows the contractor, Electric Boat Corporation, to invest in specialized resources and personnel, fostering deep expertise relevant to the specific integration tasks. This long-term engagement can lead to greater efficiency and a better understanding of the Navy's evolving needs. However, the rapid pace of technological advancement, particularly in areas like C4ISR, cyber, and AI, means that systems integrated early in the contract could become outdated by its end. This necessitates careful contract management, potential for contract modifications, and ensuring that the engineering services remain relevant and adaptable to future technological shifts throughout the five-year period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003024R6028

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $45,258,507

Exercised Options: $23,234,508

Current Obligation: $22,141,883

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $31,261

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline