DoD's $26.8M Bremerton Site O&M Contract Awarded to George G. Sharp, Inc. Under Full and Open Competition

Contract Overview

Contract Amount: $26,778,404 ($26.8M)

Contractor: George G. Sharp, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2013-08-31

Contract Duration: 2,161 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: OPERATION AND MAINTENANCE OF NISMO BREMERTON WA SITE

Place of Performance

Location: BREMERTON, KITSAP County, WASHINGTON, 98314

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $26.8 million to GEORGE G. SHARP, INC. for work described as: OPERATION AND MAINTENANCE OF NISMO BREMERTON WA SITE Key points: 1. Value for money assessed through cost-plus award fee structure, incentivizing performance. 2. Competition dynamics indicate a robust bidding process, potentially leading to better pricing. 3. Risk indicators include the cost-plus award fee structure, which can lead to cost overruns if not managed tightly. 4. Performance context is tied to the operational needs of the Bremerton, WA site. 5. Sector positioning within Ship Building and Repairing (NAICS 336611) is a critical defense industrial base component.

Value Assessment

Rating: good

The contract utilized a Cost Plus Award Fee (CPAF) structure, which aims to incentivize contractor performance by linking a portion of the fee to achieving specific performance objectives. While CPAF can be effective, it requires diligent oversight to ensure costs remain controlled and that award fees are genuinely earned through superior performance. Benchmarking this specific contract's per-unit cost is challenging without more granular data on the services provided, but the total value of approximately $26.8 million over its duration suggests a significant investment in site operations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was broad, certain sources were intentionally excluded. The presence of 4 bidders (no) suggests a reasonable level of competition, which is generally positive for price discovery and ensuring the government receives competitive offers. The exclusion of specific sources warrants further investigation to understand the rationale and potential impact on the breadth of competition.

Taxpayer Impact: The broad competition, despite exclusions, likely provided taxpayers with a more competitive price than a sole-source or limited competition award. However, the exclusion of certain sources could mean that taxpayers did not benefit from the absolute lowest possible price if those excluded sources offered superior value or lower costs.

Public Impact

The primary beneficiaries are the Department of the Navy and the operational readiness of the Bremerton, WA naval facility. Services delivered include essential operation and maintenance for the NISMO Bremerton site. Geographic impact is localized to Washington state, specifically the Bremerton area, supporting regional economic activity. Workforce implications include employment for personnel involved in site operations and maintenance, potentially benefiting local labor markets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance metrics and fee structures are not rigorously managed.
The exclusion of specific sources in an otherwise 'full and open' competition raises questions about the completeness of the competitive landscape.
Long contract duration (over 6 years) increases the risk of scope creep or evolving requirements not being adequately addressed without contract modifications.

Positive Signals

Awarded under full and open competition, suggesting a structured and broad solicitation process.
The use of an award fee structure incentivizes contractor performance and alignment with government objectives.
The contract supports critical naval operations, contributing to national security infrastructure.

Sector Analysis

The Ship Building and Repairing sector (NAICS 336611) is a vital component of the U.S. defense industrial base. This contract for site operation and maintenance falls under the broader category of support services for this sector. Spending in this area is often characterized by long-term contracts, specialized requirements, and significant government investment due to the strategic importance of naval facilities. Comparable spending benchmarks would typically involve other facility maintenance and operations contracts within defense installations, which can range from tens to hundreds of millions of dollars depending on the scale and complexity of the site.

Small Business Impact

This contract does not appear to have specific small business set-aside provisions (ss: false, sb: false). As a large-scale contract likely requiring specialized expertise and significant resources, it may not be conducive to small business participation as prime contractors. However, the prime contractor, George G. Sharp, Inc., may engage small businesses for subcontracting opportunities, depending on the specific service requirements and their subcontracting plan. Further analysis would be needed to determine the extent of small business involvement through subcontracting.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy, a component of the Department of Defense. The Cost Plus Award Fee structure necessitates robust oversight to monitor performance against award criteria and to audit incurred costs. Accountability measures are embedded in the award fee mechanism itself, rewarding performance and potentially penalizing deficiencies. Transparency is generally facilitated through contract award databases, though detailed performance reports and cost breakdowns may be less publicly accessible. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Base Maintenance Contracts
Defense Facility Operations Support
Shipyard Infrastructure Services
Department of Defense Construction and Engineering Services

Risk Flags

Potential for cost overruns due to CPAF structure.
Rationale for source exclusion in competition requires clarification.
Long contract duration may increase risk of scope changes.
Performance metrics and award fee criteria need rigorous oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.8 million to GEORGE G. SHARP, INC.. OPERATION AND MAINTENANCE OF NISMO BREMERTON WA SITE

Who is the contractor on this award?

The obligated recipient is GEORGE G. SHARP, 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 $26.8 million.

What is the period of performance?

Start: 2007-10-01. End: 2013-08-31.

What is the track record of George G. Sharp, Inc. with the Department of Defense, particularly in similar site operation and maintenance contracts?

George G. Sharp, Inc. has a history of providing professional services, including naval architecture and marine engineering, to the Department of Defense. While specific details on their track record for large-scale site operation and maintenance contracts like this one are not immediately available from the provided data, their specialization in shipbuilding and repairing suggests a relevant expertise. Analyzing their past performance on similar contracts, including any performance evaluations, past performance questionnaires, and contract awards, would be crucial to fully assess their capability and reliability for this specific requirement. Their experience in managing complex projects within the defense sector is a positive indicator, but a deeper dive into project specifics and outcomes is warranted.

How does the total contract value of approximately $26.8 million compare to similar site operation and maintenance contracts for naval facilities of comparable size and scope?

The total contract value of approximately $26.8 million over a period of roughly 6 years (from October 2007 to August 2013) translates to an average annual value of around $4.47 million. To benchmark this effectively, one would need to compare it against other Operation and Maintenance (O&M) contracts for naval facilities. Factors such as the specific services included (e.g., infrastructure maintenance, utilities, security, environmental services), the size and complexity of the site (e.g., acreage, number of buildings, specialized equipment), and the geographic location (which affects labor and material costs) are critical. Without access to a database of comparable contracts, it's difficult to definitively state whether $4.47 million annually is high, low, or average. However, for a significant naval site, this figure suggests a substantial but potentially reasonable investment for comprehensive O&M.

What are the primary risks associated with the Cost Plus Award Fee (CPAF) contract type used for this agreement, and how were they mitigated?

The primary risks associated with a CPAF contract include potential cost overruns if the contractor's costs exceed the target cost, and the possibility of the government paying higher fees than intended if the award criteria are not sufficiently stringent or if performance is not meticulously evaluated. Contractors may also focus on achieving award fee criteria at the expense of other important, but unmeasured, aspects of performance. Mitigation strategies typically involve robust government oversight, clear and measurable performance objectives, independent cost estimates, and a well-defined process for evaluating performance and determining award fees. The Department of the Navy would have been responsible for establishing these metrics and diligently monitoring the contractor's progress and expenditures to manage these risks effectively throughout the contract's life.

What was the specific rationale for excluding certain sources in an otherwise 'Full and Open Competition After Exclusion of Sources' award?

The designation 'Full and Open Competition After Exclusion of Sources' implies that while the solicitation was broadly advertised, specific potential bidders were intentionally not considered or were prohibited from bidding. The rationale for such exclusions can vary. Common reasons include national security concerns, past performance issues with specific contractors, proprietary technology or intellectual property limitations, or specific requirements that only a limited number of entities could meet. Without further documentation specific to this contract, the exact reason for excluding sources remains unclear. Understanding this rationale is important because it could indicate potential risks or limitations in the competitive process, potentially impacting the final price or the range of solutions considered.

How has spending on Operation and Maintenance (O&M) for naval facilities like the Bremerton site evolved over time, and does this contract represent a significant shift?

Spending on O&M for naval facilities is a consistent and significant part of the Department of the Navy's budget, driven by the need to maintain readiness and operational capability across its extensive infrastructure. Historically, O&M spending fluctuates based on infrastructure needs, modernization efforts, and overall defense budgets. This specific contract, valued at approximately $26.8 million over its duration, represents a substantial but likely typical investment for maintaining a key naval site. It does not inherently represent a significant shift unless it deviates drastically from historical spending patterns for similar facilities or introduces novel O&M approaches. Analyzing trends in Navy O&M spending, particularly for shipbuilding and repair facilities, would provide context on whether this contract's value aligns with broader fiscal patterns or indicates a change in investment strategy.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018907RZ007

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 5041 CORP WODS DR STE 100, VIRGINIA BEACH, VA, 23462

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Small Business

Financial Breakdown

Contract Ceiling: $30,632,683

Exercised Options: $27,530,042

Current Obligation: $26,778,404

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline