Navy awards $18.4M for mid-term availability of RAPPAHANNOCK, with 2 bids received

Contract Overview

Contract Amount: $18,411,453 ($18.4M)

Contractor: Guam Industrial Services Inc

Awarding Agency: Department of Defense

Start Date: 2024-10-28

End Date: 2025-06-24

Contract Duration: 239 days

Daily Burn Rate: $77.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: N104E LEGER PM1 RAPPAHANNOCK MID-TERM AVAILABILITY

Place of Performance

Location: SANTA RITA, GUAM County, GUAM, 96915

Plain-Language Summary

Department of Defense obligated $18.4 million to GUAM INDUSTRIAL SERVICES INC for work described as: N104E LEGER PM1 RAPPAHANNOCK MID-TERM AVAILABILITY Key points: 1. Contract value appears reasonable given the scope of mid-term availability services. 2. Limited competition suggests potential for higher pricing than a fully open market. 3. Performance risk is moderate, dependent on contractor's ability to meet delivery schedule. 4. This contract supports critical naval readiness for the RAPPAHANNOCK vessel. 5. The award falls within the Ship Building and Repair sector, a key defense industry.

Value Assessment

Rating: good

The contract value of $18.4 million for a 239-day period of performance seems aligned with typical costs for vessel maintenance and repair. Benchmarking against similar mid-term availability contracts for naval vessels of comparable size and complexity would provide a more precise value assessment. However, the firm-fixed-price structure offers cost certainty to the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. With only two bids received, the level of competition is limited. This suggests that the government may not have achieved the most competitive pricing possible, as fewer bidders generally lead to less price pressure.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers compared to a scenario with a broader range of bidders driving prices down.

Public Impact

The primary beneficiary is the Department of the Navy, ensuring operational readiness of the RAPPAHANNOCK. Services delivered include essential maintenance and repair to keep the vessel in service. The geographic impact is focused on Guam, where the vessel is likely stationed or serviced. Workforce implications include employment for skilled trades in the shipbuilding and repair sector in Guam.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to suboptimal pricing for the government.
Potential for schedule delays if contractor faces unforeseen issues during repair.
Reliance on a single contractor for specialized repair services.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Contract awarded to a company with experience in industrial services.
Clear period of performance defined for the availability.

Sector Analysis

The Ship Building and Repair sector is a critical component of the defense industrial base. This contract for vessel availability falls within the broader category of naval maintenance and sustainment. Spending in this sector is often driven by defense budgets and the need to maintain a ready fleet. Comparable spending benchmarks would involve analyzing other contracts for similar vessel maintenance periods across different naval platforms.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the nature of specialized ship repair, it is possible that subcontracting opportunities may exist for smaller firms providing specific components or services. However, without explicit subcontracting plans or set-aside goals, the direct impact on the small business ecosystem is not clearly defined.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, with penalties or incentives potentially tied to performance and delivery schedules. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Naval Vessel Maintenance Contracts
Ship Repair and Overhaul Services
Defense Industrial Base Support
Department of the Navy Ship Building and Repair Spending

Risk Flags

Limited competition
Potential for schedule slippage
Contract type 'after exclusion of sources' warrants further scrutiny

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.4 million to GUAM INDUSTRIAL SERVICES INC. N104E LEGER PM1 RAPPAHANNOCK MID-TERM AVAILABILITY

Who is the contractor on this award?

The obligated recipient is GUAM INDUSTRIAL SERVICES 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 $18.4 million.

What is the period of performance?

Start: 2024-10-28. End: 2025-06-24.

What is the track record of GUAM INDUSTRIAL SERVICES INC in performing similar naval maintenance contracts?

Assessing the track record of GUAM INDUSTRIAL SERVICES INC requires a review of their past performance on similar contracts, particularly those involving mid-term availability for naval vessels. This would involve examining contract histories for on-time delivery, adherence to budget, quality of work, and any reported disputes or contract modifications. Information from sources like the Federal Procurement Data System (FPDS) or contractor performance assessment reporting (CPARS) would be crucial. A history of successful, timely, and cost-effective performance on comparable projects would indicate a lower risk for this current contract. Conversely, a pattern of delays, cost overruns, or quality issues would raise concerns about the contractor's ability to meet the requirements of the RAPPAHANNOCK availability.

How does the awarded price compare to market rates for similar vessel availability services?

To benchmark the awarded price of $18.4 million against market rates, one would need to identify comparable contracts for mid-term availability of naval vessels of similar size, class, and complexity. This analysis would involve looking at the scope of work, duration of the availability period (239 days), and the specific types of maintenance and repair required. Data from industry reports, cost estimation services, or publicly available contract awards for similar services could be used. If the awarded price is significantly higher than comparable contracts or industry benchmarks, it could indicate potential overpricing or a lack of sufficient competition. Conversely, a price within or below the expected range would suggest good value for money.

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

The primary risks associated with this contract include potential schedule delays due to unforeseen technical issues during the repair process, cost overruns if the firm-fixed-price contract does not adequately account for all potential complexities, and performance risks related to the quality of the repair work. Mitigation strategies typically involve robust government oversight, detailed inspection protocols, and clear performance standards outlined in the contract. The firm-fixed-price nature itself mitigates cost overrun risk for the government, shifting it to the contractor. The limited competition (2 bidders) also presents a risk of not achieving the best possible price. The Navy's mitigation would involve careful contract administration and potentially leveraging lessons learned from previous availabilities.

What is the historical spending pattern for mid-term availability of the RAPPAHANNOCK or similar vessels?

Analyzing historical spending for mid-term availability of the RAPPAHANNOCK or similar vessels would involve examining past contract awards for this specific vessel or comparable naval platforms. This would reveal trends in contract values, durations, and the types of services procured over time. Understanding historical spending helps in assessing whether the current $18.4 million award is consistent with past investments or represents a significant deviation. Significant increases in cost without a corresponding increase in scope or complexity could signal potential issues with pricing or market conditions. Conversely, a stable or decreasing trend might indicate efficiency gains or competitive pressures.

What is the impact of the 'after exclusion of sources' clause on competition and pricing?

The 'after exclusion of sources' clause in the contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' signifies that while the competition was intended to be open, certain potential bidders were deliberately excluded from the process. The reasons for exclusion could range from security concerns, inability to meet specific technical requirements, or past performance issues. This exclusion inherently limits the pool of potential bidders, which in this case resulted in only two offers. A smaller bidder pool generally leads to reduced price competition, potentially resulting in higher prices for the government than if a wider range of qualified sources had been allowed to compete. It also raises questions about the justification for excluding other sources.

Industry Classification

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

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

Solicitation ID: N3220522R0008

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: BLDG 152 ROUTE 2A, AGAT, GU, 96915

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,427,284

Exercised Options: $18,411,453

Current Obligation: $18,411,453

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4044623D0002

IDV Type: IDC

Timeline