DoD's $32.7M contract for USS Normandy repairs awarded to BAE Systems, with 2 bidders

Contract Overview

Contract Amount: $32,765,031 ($32.8M)

Contractor: BAE Systems Maritime Solutions Norfolk Inc.

Awarding Agency: Department of Defense

Start Date: 2016-01-28

End Date: 2017-03-03

Contract Duration: 400 days

Daily Burn Rate: $81.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF USS NORMANDY (CG-60) SRA

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $32.8 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. for work described as: IGF::CT::IGF USS NORMANDY (CG-60) SRA Key points: 1. Value for money appears fair given the fixed-price nature and competitive award. 2. Competition dynamics show a moderate level of engagement with two bidders. 3. Risk indicators are moderate, typical for ship repair contracts of this scope. 4. Performance context is within the standard for naval vessel maintenance. 5. Sector positioning is within the established defense shipbuilding and repair market.

Value Assessment

Rating: fair

The contract value of $32.7 million for ship repair services is within a reasonable range for major naval vessel maintenance. Benchmarking against similar contracts for cruisers of the Ticonderoga class indicates that this price is competitive. The firm-fixed-price structure helps mitigate cost overrun risks for the government, suggesting a degree of value for money, although detailed cost breakdowns are not publicly available for precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Two bids were received, which suggests a moderate level of competition for this specialized service. While two bidders are better than one, a higher number could potentially drive prices down further, but it also reflects the specialized nature of naval ship repair.

Taxpayer Impact: The full and open competition with two bidders suggests that taxpayers received a reasonably competitive price, avoiding the premium often associated with sole-source or limited competition awards.

Public Impact

The primary beneficiary is the U.S. Navy's operational readiness through the maintenance of the USS Normandy. Services delivered include essential repairs and maintenance to ensure the warship's functionality. Geographic impact is centered around the naval base where the repair work is conducted, likely Norfolk, Virginia. Workforce implications include employment for skilled tradespeople in the maritime repair sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during repairs, despite fixed-price contract.
Dependence on a limited number of specialized contractors for critical naval maintenance.
Risk of schedule delays impacting fleet readiness if repair timelines are not met.

Positive Signals

Firm-fixed-price contract structure provides cost certainty for the government.
Awarded through full and open competition, promoting a fair marketplace.
Contract awarded to a known entity with experience in naval shipbuilding and repair.

Sector Analysis

The defense shipbuilding and repair sector is a critical component of national security, involving highly specialized skills and facilities. This contract falls within the broader category of naval vessel maintenance and repair, a market characterized by significant government spending and a limited number of prime contractors capable of handling complex projects. Comparable spending benchmarks for similar naval repair contracts can vary widely based on the ship class and scope of work, but this $32.7 million award is consistent with major overhauls.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans for small businesses. Given the nature of major naval ship repair, prime contracts are typically awarded to large, specialized firms. The extent to which small businesses participate would likely be through subcontracting opportunities offered by the prime contractor, BAE Systems Maritime Solutions.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and performance standards. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair
Shipbuilding and Repair Contracts
Department of the Navy Procurement
Defense Readiness Contracts

Risk Flags

Potential for schedule slippage
Unforeseen repair requirements
Limited competition pool for specialized services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.8 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC.. IGF::CT::IGF USS NORMANDY (CG-60) SRA

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS NORFOLK 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 $32.8 million.

What is the period of performance?

Start: 2016-01-28. End: 2017-03-03.

What is the track record of BAE Systems Maritime Solutions in fulfilling similar naval repair contracts?

BAE Systems Maritime Solutions is a well-established entity with a significant history of supporting naval vessel maintenance and repair. They have been involved in numerous contracts with the Department of the Navy, including complex overhauls and modernization projects for various classes of ships. Their experience typically encompasses a wide range of repair services, from routine maintenance to extensive structural and systems upgrades. While specific performance metrics for past contracts are not detailed here, their continued selection for significant naval contracts suggests a generally positive track record in delivering required services, though like any large contractor, they may have faced challenges or scrutiny on specific projects.

How does the awarded amount compare to the initial estimated cost or budget for this repair project?

The provided data does not include the initial estimated cost or budget for this specific repair project. The awarded amount of $32.7 million represents the final negotiated price between the Department of the Navy and BAE Systems Maritime Solutions. Without the baseline estimate, it is difficult to definitively assess whether the contract was awarded significantly above, below, or at the estimated cost. However, the fact that it was awarded under full and open competition with two bidders suggests that the final price was considered acceptable and competitive by the procuring agency.

What are the primary risks associated with this type of ship repair contract, and how are they mitigated?

Primary risks include unforeseen technical issues discovered during the repair process, potential schedule delays due to complexity or resource availability, and cost growth if the fixed-price nature doesn't fully account for all eventualities. Mitigation strategies involve thorough pre-award inspections and technical assessments, robust project management by the Navy, clear contract terms defining responsibilities and deliverables, and the firm-fixed-price structure itself, which places the cost risk primarily on the contractor. The inclusion of specific performance standards and delivery schedules also serves as a risk mitigation tool.

What is the historical spending pattern for USS Normandy (CG-60) maintenance and repair over its service life?

Historical spending data specifically for the USS Normandy (CG-60) maintenance and repair is not directly available in the provided data snippet. To ascertain this, one would need to access historical contract databases and financial records for this specific vessel over its operational lifespan. Generally, cruisers like the Ticonderoga class undergo periodic maintenance availabilities, including dry-docking, system overhauls, and component replacements, which represent significant capital investments. The frequency and cost of these events are influenced by operational tempo, equipment condition, and planned upgrades. This $32.7 million contract represents one such significant investment in the vessel's upkeep.

How does the competition level (2 bidders) impact the potential for cost savings for the taxpayer?

A competition with two bidders generally offers some cost savings compared to a sole-source or limited competition scenario. It introduces a degree of price pressure, as each bidder aims to win the contract by offering a competitive price. However, the savings potential is typically less pronounced than with a larger number of bidders (e.g., 3-5 or more). For highly specialized services like major naval ship repair, where the pool of qualified contractors is inherently limited, two bidders may represent a reasonable level of competition that balances market dynamics with the availability of capable firms, thus achieving a fair price for the taxpayer.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N5005416R0001

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 750 W BERKLEY AVE, NORFOLK, VA, 23523

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

Financial Breakdown

Contract Ceiling: $32,840,611

Exercised Options: $32,765,031

Current Obligation: $32,765,031

Subaward Activity

Number of Subawards: 68

Total Subaward Amount: $8,428,441

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline