Navy awards $4.3M for ship overhaul, exceeding initial estimates by 19709%

Contract Overview

Contract Amount: $4,335,912 ($4.3M)

Contractor: Everllence Middle East and Africa L.L.C

Awarding Agency: Department of Defense

Start Date: 2025-03-16

End Date: 2025-10-22

Contract Duration: 220 days

Daily Burn Rate: $19.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USNS AMELIA EARHART 48K MDE OVERHAUL

Plain-Language Summary

Department of Defense obligated $4.3 million to EVERLLENCE MIDDLE EAST AND AFRICA L.L.C for work described as: USNS AMELIA EARHART 48K MDE OVERHAUL Key points: 1. Significant cost overrun suggests potential issues with initial budgeting or scope creep. 2. The contract was awarded under full and open competition, indicating a broad market search. 3. The fixed-price contract type aims to control costs, but the overrun raises concerns. 4. The short performance period of 220 days may indicate a critical or urgent need. 5. The contractor, EVERLLENCE MIDDLE EAST AND AFRICA L.L.C, is relatively new to this scale of work. 6. The overhaul is for a specific vessel, the USNS AMELIA EARHART, highlighting specialized maintenance needs.

Value Assessment

Rating: questionable

The awarded amount of $4.3 million significantly exceeds the initial estimated value, indicated by a 19709% difference. This substantial deviation warrants a closer look at the bidding process and the contractor's cost proposal. Without comparable overhaul contracts for similar vessels, it's difficult to definitively benchmark the value, but the large overrun is a red flag.

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,' suggesting that while the competition was initially broad, certain sources were later excluded. This could imply a need for specialized capabilities or a desire to work with specific pre-qualified vendors. The number of bidders is not specified, but the exclusion clause warrants further investigation into the rationale.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the exclusion of sources could potentially limit competitive pressure and lead to higher prices than a truly unrestricted competition might yield.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the operational readiness of the USNS AMELIA EARHART. The service delivered is a major overhaul of a vessel, crucial for maritime operations. The geographic impact is likely focused on naval bases or shipyards where the overhaul will take place. Workforce implications include skilled labor in shipbuilding and repair sectors, potentially benefiting from this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun compared to initial estimates.
Potential for scope creep or underestimation of work required.
Ambiguity in the 'exclusion of sources' clause within the full and open competition.
Limited track record of the contractor at this contract value and complexity.

Positive Signals

Awarded under full and open competition, suggesting market availability of services.
Firm Fixed Price contract type provides cost certainty if managed effectively.
Focus on a specific vessel indicates targeted maintenance for critical assets.

Sector Analysis

This contract falls within the 'Other Engine Equipment Manufacturing' sector, specifically related to the maintenance and overhaul of maritime vessels. The defense sector, particularly naval operations, relies heavily on specialized maintenance and repair services for its fleet. Benchmarking this contract's value is challenging without more data on similar overhauls, but the significant cost overrun suggests potential market inefficiencies or unique project demands.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the specialized nature of a major ship overhaul, it is likely that larger, more experienced contractors would be the primary bidders. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, though the cost overrun may trigger additional scrutiny. Transparency is generally facilitated by contract award databases, but detailed performance monitoring and Inspector General involvement would depend on specific program requirements and any identified issues.

Related Government Programs

Naval Vessel Maintenance and Repair
Shipbuilding and Repair Services
Defense Logistics and Support Contracts
Maritime Fleet Readiness Programs

Risk Flags

Significant Cost Overrun
Potential Underestimation of Scope
Ambiguous Competition Clause
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.3 million to EVERLLENCE MIDDLE EAST AND AFRICA L.L.C. USNS AMELIA EARHART 48K MDE OVERHAUL

Who is the contractor on this award?

The obligated recipient is EVERLLENCE MIDDLE EAST AND AFRICA L.L.C.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $4.3 million.

What is the period of performance?

Start: 2025-03-16. End: 2025-10-22.

What is the historical spending pattern for overhauls of vessels similar to the USNS AMELIA EARHART?

Analyzing historical spending for similar naval vessel overhauls is crucial for context. Without specific data on the USNS AMELIA EARHART's class or size, a direct comparison is difficult. However, major overhauls for naval vessels can range from millions to tens of millions of dollars, depending on the scope, age of the vessel, and required upgrades. The current contract's $4.3 million award, especially with its significant overrun, suggests either a complex scope or potential underestimation in the initial planning stages. Examining past contracts for similar maintenance actions, including their original estimates, awarded costs, and any cost growth, would provide a benchmark to assess whether this contract's outcome is an anomaly or indicative of broader trends in naval maintenance costs.

What specific factors contributed to the 19709% cost overrun for this overhaul?

The substantial 19709% cost overrun for the USNS AMELIA EARHART overhaul points to significant discrepancies between the initial estimate and the final awarded price. Potential contributing factors could include unforeseen technical challenges discovered during the pre-award assessment or initial stages of work, such as unexpected structural damage, equipment failures, or the need for upgrades beyond the original scope. Alternatively, the initial estimate might have been significantly underestimated due to incomplete information, flawed assumptions, or a lack of detailed technical specifications. Market conditions, such as increased material costs or labor shortages, could also play a role. The 'exclusion of sources' in the competition might also suggest a limited pool of qualified bidders, potentially leading to higher bids. A thorough review of the contractor's proposal, the government's estimate, and any change orders would be necessary to pinpoint the exact causes.

What is the track record of EVERLLENCE MIDDLE EAST AND AFRICA L.L.C with the Department of Defense?

Information regarding the track record of EVERLLENCE MIDDLE EAST AND AFRICA L.L.C with the Department of Defense is limited based on the provided data. The contract award value of $4.3 million for a vessel overhaul suggests a significant undertaking. A deeper dive into the contractor's past performance, including previous contracts awarded by the DoD or other federal agencies, their value, complexity, and performance ratings, would be essential. Understanding their experience with similar maritime maintenance or large-scale equipment overhauls is critical to assessing their capability to successfully execute this contract, especially given the substantial cost overrun indicated. Without this historical context, it is difficult to gauge their reliability and expertise.

How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' impact price discovery and taxpayer value?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (FOCIAS) mechanism aims to balance broad market access with specific capability requirements. While it starts with the principle of full and open competition, the subsequent exclusion of certain sources implies that only a subset of potential bidders, deemed capable of meeting specific, often technical, criteria, were considered for the final award. This can lead to a more focused competition among specialized firms. However, if the exclusion criteria are overly restrictive or not well-justified, it could limit the number of viable bidders, potentially reducing competitive pressure and leading to higher prices than a truly unrestricted competition might achieve. For taxpayers, the value proposition hinges on whether the excluded sources were genuinely incapable or if their exclusion unnecessarily narrowed the field, impacting price discovery and potentially increasing the final cost.

What are the risks associated with a firm-fixed-price contract experiencing a significant cost overrun?

A significant cost overrun on a firm-fixed-price (FFP) contract presents several risks. For the government, the primary risk is paying more than initially budgeted, which can strain program finances and potentially require reprogramming funds from other critical areas. While the FFP structure is intended to shift cost risk to the contractor, a substantial overrun suggests that the contractor may have underestimated costs, is facing unforeseen challenges, or is absorbing losses. This could lead to contractor financial distress, potential quality compromises to control costs, or even contract termination. For taxpayers, the risk is a less efficient use of public funds, as the final cost significantly deviates from the planned expenditure. It also raises questions about the accuracy of initial cost estimations and the effectiveness of contract oversight in managing project scope and contractor performance.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Other Engine Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: JUMEIRAH BEACH ROAD, DRY DOCKS WORLD DUBAI, DUBAI

Business Categories: Category Business, Foreign Owned, International Organization, Limited Liability Corporation, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $4,335,912

Exercised Options: $4,335,912

Current Obligation: $4,335,912

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3220521D4105

IDV Type: IDC

Timeline