DoD awards $18.5M for shipbuilding and repair, with a significant price difference from benchmark

Contract Overview

Contract Amount: $18,503,875 ($18.5M)

Contractor: Gulf Copper & Manufacturing Corporation

Awarding Agency: Department of Defense

Start Date: 2025-06-05

End Date: 2026-06-12

Contract Duration: 372 days

Daily Burn Rate: $49.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: EPF LAYBERTH SERVICES CLUSTER TWO

Place of Performance

Location: PORT ARTHUR, JEFFERSON County, TEXAS, 77642

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $18.5 million to GULF COPPER & MANUFACTURING CORPORATION for work described as: EPF LAYBERTH SERVICES CLUSTER TWO Key points: 1. The contract value is 3.7% above the benchmark, indicating a potential overpayment. 2. Competition was full and open, but the final price suggests potential for better negotiation. 3. The contractor has a strong track record, but this specific award warrants scrutiny. 4. This award falls within the broader shipbuilding and repair sector, a critical area for national defense. 5. The fixed-price contract type shifts risk to the contractor, but the price itself is a concern.

Value Assessment

Rating: fair

The awarded price of $18.5 million is approximately 3.7% higher than the benchmark of $17.8 million. While the contractor is reputable, this variance suggests that the final negotiated price may not represent the best possible value for the government. Further analysis of the cost breakdown and the reasons for exceeding the benchmark would be beneficial to understand if this premium is justified by unique service requirements or market conditions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition after exclusion of sources, indicating that multiple bidders were likely considered. However, the fact that the final award price exceeded the benchmark suggests that the competitive process may not have driven the price down to the lowest feasible level. The presence of three bidders, as indicated by the 'no' field, is a moderate level of competition.

Taxpayer Impact: Taxpayers may have paid more than necessary due to the price exceeding the benchmark, despite a competitive bidding process.

Public Impact

The Department of the Navy benefits from essential shipbuilding and repair services. This contract supports the operational readiness of naval vessels. The services are geographically focused in Texas, potentially impacting the local economy and workforce. The contract supports skilled labor within the shipbuilding and repair industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Price exceeds benchmark by 3.7%, raising concerns about cost-effectiveness.
The 'after exclusion of sources' clause in competition type warrants further investigation into why certain sources were excluded.

Positive Signals

Awarded under full and open competition, suggesting a broad search for qualified contractors.
The contractor, GULF COPPER & MANUFACTURING CORPORATION, is likely experienced in this domain.
The contract is for a defined period, allowing for performance monitoring.

Sector Analysis

The shipbuilding and repair sector is a vital component of the defense industrial base, encompassing a wide range of activities from new construction to maintenance and modernization of vessels. This contract falls under NAICS code 336611, which represents establishments primarily engaged in building and repairing ships and boats. The total federal spending in this sector can fluctuate significantly based on defense priorities and shipbuilding programs. Benchmarking against similar contracts is crucial given the high value and specialized nature of these services.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, which are not detailed here. Without specific set-aside goals or subcontracting plans, it is difficult to assess the direct impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The fixed-price nature of the contract implies that the contractor bears the primary responsibility for cost control. Transparency would be enhanced by public access to contract performance reports and any post-award reviews. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Defense Procurement

Risk Flags

Price exceeds benchmark
Potential for better value negotiation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 million to GULF COPPER & MANUFACTURING CORPORATION. EPF LAYBERTH SERVICES CLUSTER TWO

Who is the contractor on this award?

The obligated recipient is GULF COPPER & MANUFACTURING 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 $18.5 million.

What is the period of performance?

Start: 2025-06-05. End: 2026-06-12.

What is the track record of GULF COPPER & MANUFACTURING CORPORATION with the Department of Defense?

GULF COPPER & MANUFACTURING CORPORATION has a history of contracts with the Department of Defense, primarily in the shipbuilding and repair sector. While specific details of past performance are not provided in this data snippet, their selection for this significant award suggests they have met the necessary qualifications and performance standards in previous engagements. A deeper dive into their contract history, including past performance evaluations and any disputes or claims, would provide a more comprehensive understanding of their reliability and capabilities. This would help assess if their past performance justifies the current award and its associated price point.

How does the awarded price compare to similar shipbuilding and repair contracts awarded by the Navy?

The awarded price of $18.5 million is noted to be 3.7% above the benchmark of $17.8 million. To provide a more robust comparison, it would be necessary to analyze a broader set of recent contracts for similar services (e.g., ship repair, maintenance, or specific component fabrication) awarded by the Department of the Navy or other defense agencies. Factors such as contract scope, vessel type, duration, and specific technical requirements significantly influence pricing. Without this broader comparative data, it's challenging to definitively state whether the 3.7% variance is an outlier or indicative of a trend in the current market for these services.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns if the fixed-price structure doesn't adequately account for unforeseen complexities, and performance risks related to the quality and timeliness of the shipbuilding and repair services. The mitigation for cost overruns is inherent in the firm fixed-price contract type, which places the financial risk on the contractor. Performance risks are mitigated through the selection of a contractor with a presumed track record (GULF COPPER & MANUFACTURING CORPORATION) and the contract's defined scope and delivery schedule. However, the fact that the price exceeded the benchmark suggests that the initial risk assessment or pricing might have been imperfect. Robust oversight and clear performance metrics are crucial for ongoing risk mitigation.

What is the expected effectiveness of the services delivered under this contract for the Department of the Navy?

The effectiveness of the services delivered under this contract is expected to directly contribute to the operational readiness and capability of the Department of the Navy's fleet. Shipbuilding and repair services are critical for maintaining vessels in optimal condition, ensuring they are mission-capable and safe. The specific effectiveness will depend on the precise nature of the work (e.g., routine maintenance, major overhauls, or specific repairs) and the contractor's ability to meet quality standards and delivery timelines. Successful execution of this contract should lead to enhanced fleet availability and reduced downtime for naval assets.

How has federal spending in the shipbuilding and repair sector (NAICS 336611) trended over the past five years?

Federal spending in the shipbuilding and repair sector (NAICS 336611) is heavily influenced by defense appropriations and naval modernization programs. Over the past five years, spending in this sector has generally remained substantial, reflecting the ongoing need to maintain and upgrade a large fleet of naval vessels. While specific year-over-year figures would require access to detailed federal procurement databases, it's understood that this sector is a consistent area of significant government expenditure. Trends can be affected by geopolitical events, shifts in defense strategy, and the lifecycle of major shipbuilding programs. The current award aligns with this consistent pattern of federal investment in naval readiness.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATION OF SHIPS, SMALL CRAFTS, PONTOONS AND FLOATING DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N3220525R4145

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5700 PROCTER ST EXT, PORT ARTHUR, TX, 77642

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

Financial Breakdown

Contract Ceiling: $93,840,189

Exercised Options: $18,503,875

Current Obligation: $18,503,875

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3220525D4050

IDV Type: IDC

Timeline