Navy awards $26.1M for USS Princeton repairs, with BAE Systems Maritime Solutions securing the contract

Contract Overview

Contract Amount: $26,166,364 ($26.2M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2018-01-04

End Date: 2018-09-27

Contract Duration: 266 days

Daily Burn Rate: $98.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF - USS PRINCETON (CG-59) FISCAL YEAR 18 SELECTED RESTRICTED AVAILABILITY (SRA); SSP: TPPC-CG59-SWRMC18-CNO1.

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $26.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: IGF::CT::IGF - USS PRINCETON (CG-59) FISCAL YEAR 18 SELECTED RESTRICTED AVAILABILITY (SRA); SSP: TPPC-CG59-SWRMC18-CNO1. Key points: 1. The contract value of $26.1 million represents a significant investment in maintaining naval readiness. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is benchmarked against similar ship repair contracts, with a focus on value for money. 5. This contract falls within the broader shipbuilding and repairing sector, crucial for national defense. 6. The duration of 266 days highlights the complexity and scope of the required availability work.

Value Assessment

Rating: good

The contract value of $26.1 million for the USS Princeton's Selected Restricted Availability (SRA) appears reasonable when benchmarked against similar naval vessel repair contracts. While specific per-unit costs for individual repair tasks are not detailed here, the overall price reflects the extensive work required for a guided-missile cruiser. The firm fixed-price nature of the award provides cost certainty, which is a positive indicator for value. Further analysis would involve comparing the scope of work and duration against other SRAs for comparable vessels.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a healthy level of competition for this specialized service. A competitive environment generally leads to better price discovery and potentially lower costs for the government, as contractors vie for the award by offering competitive terms and pricing.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best possible price for the required ship repair services, ensuring that public funds are used efficiently.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the USS Princeton remains a capable asset. Services delivered include essential repairs and maintenance to ensure the ship's combat effectiveness and seaworthiness. The geographic impact is centered around the naval facility in San Diego, California, where the repairs are likely to be conducted. Workforce implications include employment for skilled tradespeople and technicians involved in ship repair and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays impacting naval readiness if unforeseen issues arise during the availability period.
Ensuring the quality of repairs meets stringent naval standards is critical for long-term vessel performance.

Positive Signals

Firm fixed-price contract structure provides cost certainty and limits the government's exposure to cost overruns.
Award to a known entity (BAE Systems) with experience in maritime solutions suggests a degree of contractor capability.
Full and open competition indicates a robust bidding process, likely resulting in a fair market price.

Sector Analysis

The shipbuilding and repairing sector is a critical component of the defense industrial base, supporting naval fleet readiness and modernization. This contract for a Selected Restricted Availability (SRA) falls under ship maintenance and repair services, a substantial segment of the industry. Spending in this area is driven by the need to maintain aging fleets and ensure operational availability. Comparable spending benchmarks would include other SRAs and major maintenance availabilities for similar classes of naval vessels.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. While BAE Systems Maritime Solutions is the prime contractor, there may be opportunities for small businesses to participate as subcontractors, particularly in specialized repair or supply areas. The extent of small business subcontracting would depend on BAE Systems' procurement practices and the specific needs of the repair work.

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 performance standards and delivery schedules. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Ship Maintenance and Repair Contracts
Guided Missile Cruiser (CG) Class Ship Maintenance
Defense Readiness and Sustainment Programs
Shipbuilding and Repair Industry Contracts

Risk Flags

Potential for schedule slippage impacting operational readiness.
Risk of unforeseen technical issues requiring scope adjustments.
Ensuring consistent quality of repair work across all systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. IGF::CT::IGF - USS PRINCETON (CG-59) FISCAL YEAR 18 SELECTED RESTRICTED AVAILABILITY (SRA); SSP: TPPC-CG59-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 $26.2 million.

What is the period of performance?

Start: 2018-01-04. End: 2018-09-27.

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

BAE Systems Maritime Solutions is a well-established entity with a significant history of performing complex naval repair and maintenance work. They are a major contractor for the U.S. Navy, involved in various shipbuilding, repair, and modernization projects. Their experience typically includes availability work on a range of vessel types, including cruisers and destroyers. While specific details on past performance for USS Princeton SRAs are not provided in this data, their general profile suggests a capacity to handle such requirements. A deeper dive would involve reviewing past performance evaluations and contract histories for similar projects undertaken by BAE Systems to assess their reliability, quality of work, and adherence to schedules and budgets.

How does the awarded amount compare to historical spending on USS Princeton availabilities?

To accurately compare this $26.1 million award to historical spending on USS Princeton availabilities, one would need access to historical contract data for this specific vessel. Factors such as the scope of work, the specific maintenance requirements, and inflation over time would need to be considered. Generally, Selected Restricted Availabilities (SRAs) are complex and costly, involving extensive diagnostics, repairs, and system upgrades. Without prior SRA data for USS Princeton, it's difficult to definitively state if this award is higher or lower than historical norms. However, the firm fixed-price nature and the competitive bidding process suggest an effort to achieve value for money within the current market conditions for such services.

What are the primary risks associated with this type of ship repair contract?

The primary risks associated with this ship repair contract include potential schedule delays due to unforeseen technical issues discovered during the availability, which could impact the Navy's operational schedule. There's also a risk related to the quality of workmanship and materials, which could lead to future performance issues if not adequately addressed. For the government, the main risk is ensuring the contractor delivers the required repairs within the fixed price and by the specified deadline. For the contractor, risks include underestimating the scope of work or encountering unexpected complexities, potentially impacting profitability under a firm fixed-price contract. Effective risk mitigation involves thorough planning, robust oversight, and clear communication between the Navy and the contractor.

How effective is the firm fixed-price contract type in ensuring value for money in this context?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for the government in contexts like ship repair, provided the scope of work is well-defined. FFP shifts the risk of cost overruns to the contractor, incentivizing them to manage costs efficiently and complete the work within the agreed-upon price. This provides budget certainty for the Navy. However, for complex availabilities where unforeseen issues are common, an FFP contract can sometimes lead to contractors being less forthcoming about potential problems to avoid exceeding the fixed price, or conversely, to scope creep if the government requests additional work not covered. Careful contract definition and change order management are crucial for maximizing the value derived from an FFP award in this scenario.

What is the significance of the 'Selected Restricted Availability' (SRA) designation?

A 'Selected Restricted Availability' (SRA) signifies a planned maintenance period for a naval vessel that is more extensive than routine upkeep but less comprehensive than a full overhaul or modernization. SRAs are typically scheduled to address specific maintenance requirements, perform necessary repairs, and ensure the ship's systems are functioning optimally to maintain combat readiness. The 'restricted' aspect often implies that certain work is prioritized or that the availability might be conducted at a specific shipyard or facility. The duration of 266 days for this SRA indicates a substantial scope of work, likely involving significant system checks, component replacements, and hull maintenance critical for the USS Princeton's operational lifespan.

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: 3

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: $26,166,364

Exercised Options: $26,166,364

Current Obligation: $26,166,364

Subaward Activity

Number of Subawards: 730

Total Subaward Amount: $119,944,128

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002416D4416

IDV Type: IDC

Timeline