Department of the Navy awards $37.6M for ship repair, with BAE Systems Maritime Solutions securing the contract

Contract Overview

Contract Amount: $37,640,427 ($37.6M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2018-01-18

End Date: 2019-06-14

Contract Duration: 512 days

Daily Burn Rate: $73.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF - C440_USS CAPE ST GEORGE (CG-71) FISCAL YEAR 18 SPECIAL SELECTED RESTRICTED AVAILABILITY (SSRA); SSP: TPPC-CG71-SWRMC18-CNO1.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92113

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $37.6 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: IGF::CT::IGF - C440_USS CAPE ST GEORGE (CG-71) FISCAL YEAR 18 SPECIAL SELECTED RESTRICTED AVAILABILITY (SSRA); SSP: TPPC-CG71-SWRMC18-CNO1. Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger agreement, indicating ongoing program needs. 3. Fixed-price contract type suggests cost certainty for the government, shifting risk to the contractor. 4. The duration of 512 days points to a substantial scope of work for ship repair. 5. The contract is for fiscal year 2018 special selected restricted availability, highlighting a specific operational need. 6. The North American Industry Classification System (NAICS) code 336611 points to shipbuilding and repair services.

Value Assessment

Rating: good

The contract value of $37.6 million for ship repair services appears reasonable given the scope and duration. Benchmarking against similar contracts for naval vessel maintenance and repair would provide a more precise assessment of value for money. The firm fixed-price nature of the contract helps in managing cost predictability. However, without specific details on the services rendered and comparison to market rates for specialized repair work, a definitive value assessment is challenging.

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. The presence of two bidders suggests a moderate level of competition for this specific delivery order. While two bidders are better than one, a higher number of competitors could potentially drive prices down further and offer a wider range of technical solutions. The specific details of the bidding process and the nature of the competition are not fully elaborated.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple companies to bid, potentially leading to lower prices and better value. Even with two bidders, the competitive pressure can result in cost savings compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the U.S. Navy's operational readiness and the specific vessel, USS CAPE ST GEORGE (CG-71). Services delivered include specialized repair and maintenance to ensure the vessel's functionality and longevity. The geographic impact is centered in San Diego, California, where BAE Systems Maritime Solutions is located and likely where the work will be performed. The contract supports skilled labor within the maritime repair and shipbuilding industry in the San Diego region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen complexities arise during the repair process, despite the fixed-price nature.
Dependence on a single contractor for critical repair services could pose a risk if performance issues emerge.
The specific nature of 'special selected restricted availability' might imply unique or complex requirements that could be challenging to meet.
Limited competition (two bidders) might not have fully explored the market's cost-saving potential.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating a structured and fair procurement process.
BAE Systems Maritime Solutions is an established entity in the defense sector, suggesting a degree of reliability.
The contract addresses a specific, likely critical, operational need for the U.S. Navy.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval fleet readiness. This contract falls within the broader category of defense contracting, specifically focusing on maintenance and repair services for naval vessels. The market for such services is specialized, often dominated by a few large, experienced contractors capable of handling complex naval ship requirements. Spending in this sector is directly tied to fleet size, operational tempo, and the age of vessels requiring upkeep.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, and the prime contractor, BAE Systems Maritime Solutions, is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this delivery order. The impact on the small business ecosystem would depend on whether BAE Systems engages small businesses for specialized services or supplies as subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General of the Department of Defense would have jurisdiction for audits and investigations into fraud, waste, or abuse. Transparency is generally maintained through contract award databases like FPDS-NG, which provide basic details of the contract. However, detailed performance metrics and specific oversight activities are not publicly disclosed.

Related Government Programs

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

Risk Flags

Potential for scope creep if additional repair needs are identified.
Risk of performance delays impacting naval readiness.
Dependence on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.6 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. IGF::CT::IGF - C440_USS CAPE ST GEORGE (CG-71) FISCAL YEAR 18 SPECIAL SELECTED RESTRICTED AVAILABILITY (SSRA); SSP: TPPC-CG71-SWRMC18-CNO1.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO 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 $37.6 million.

What is the period of performance?

Start: 2018-01-18. End: 2019-06-14.

What is the historical spending pattern for BAE Systems Maritime Solutions with the Department of the Navy for similar ship repair services?

Analyzing historical spending for BAE Systems Maritime Solutions with the Department of the Navy reveals a consistent pattern of significant contract awards, particularly in ship repair and maintenance. Over the past decade, the company has secured numerous contracts, often through competitive bidding, for a wide range of naval vessels. These awards reflect its established position as a key contractor within the defense industrial base. Specific spending figures fluctuate annually based on fleet needs, modernization programs, and the availability of other qualified contractors. However, BAE Systems consistently ranks among the top recipients of naval shipbuilding and repair contracts, indicating a strong, ongoing relationship and a substantial share of the available market.

How does the awarded amount of $37.6 million compare to the average cost of similar ship repair contracts for a guided-missile destroyer (CG) class vessel?

The awarded amount of $37.6 million for the USS CAPE ST GEORGE (CG-71) repair contract needs to be contextualized against the complexity and scope of work. Guided-missile cruisers (CGs) are large, sophisticated vessels with extensive systems requiring specialized maintenance. The average cost for major overhauls or repairs can vary significantly, ranging from tens of millions to over a hundred million dollars, depending on the extent of work, required upgrades, and the specific availability period. This $37.6 million contract, described as a 'special selected restricted availability,' suggests a focused scope rather than a full-life cycle overhaul. Therefore, it appears to be within a reasonable range for significant, but not exhaustive, repair and maintenance services for a vessel of this class, especially when considering the firm fixed-price nature which implies defined deliverables.

What are the key performance indicators (KPIs) used to assess the success of this contract, and how was contractor performance evaluated?

While specific KPIs for this contract are not publicly detailed, typical performance indicators for naval ship repair contracts include adherence to schedule, quality of workmanship, cost control (within the fixed-price framework), safety compliance, and meeting technical specifications. Contractor performance is usually evaluated through formal reviews conducted by the Navy's contracting officer's representative (COR) and project managers. These evaluations often result in performance ratings that can influence future contract awards. For BAE Systems Maritime Solutions, their track record with the Navy, including past performance on similar contracts, would have been a critical factor in the award decision and would continue to be monitored throughout the contract duration.

What is the risk profile associated with this specific contract, considering its duration and the nature of ship repair?

The risk profile for this contract involves several factors. The duration of 512 days indicates a substantial project, increasing the potential for unforeseen issues, such as discovering additional repair needs once work commences or encountering supply chain disruptions. The firm fixed-price nature shifts cost overrun risk to the contractor, but it can also incentivize cutting corners if not rigorously overseen. Technical risks include the complexity of repairing aging naval systems and ensuring compatibility with evolving operational requirements. Furthermore, the reliance on a single contractor for a critical availability period introduces performance risk; delays or substandard work could impact the Navy's operational readiness. However, the use of a known, experienced contractor like BAE Systems mitigates some of these risks.

How does the competition level (2 bidders) for this delivery order potentially impact the government's ability to secure favorable pricing and terms?

A competition level of two bidders for this delivery order presents a mixed scenario for the government regarding pricing and terms. On one hand, having two bidders ensures some level of competition, which is generally preferable to a sole-source award. This competition likely pressured both BAE Systems Maritime Solutions and the other bidder to offer competitive pricing and terms to win the contract. On the other hand, a higher number of bidders (e.g., three or more) typically intensifies competition, potentially leading to even more aggressive pricing and innovative solutions. With only two bidders, there's a possibility that the market's full competitive potential wasn't realized, and the government might not have achieved the absolute lowest possible price. The government's negotiation leverage is present but potentially less robust than in a multi-bidder scenario.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002416R4401

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 2205 E BELT ST, SAN DIEGO, CA, 92113

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: $37,640,427

Exercised Options: $37,640,427

Current Obligation: $37,640,427

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002416D4416

IDV Type: IDC

Timeline