DoD awards $34M for Littoral Combat Ship maintenance, with 3 bidders vying for the contract

Contract Overview

Contract Amount: $33,951,154 ($34.0M)

Contractor: National Steel and Shipbuilding Company

Awarding Agency: Department of Defense

Start Date: 2019-12-06

End Date: 2020-11-13

Contract Duration: 343 days

Daily Burn Rate: $99.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C480/LCS - USS JACKSON (LCS-6) FY20 (DSRA) BASIC AWARD

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92136

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $34.0 million to NATIONAL STEEL AND SHIPBUILDING COMPANY for work described as: C480/LCS - USS JACKSON (LCS-6) FY20 (DSRA) BASIC AWARD Key points: 1. Value for money appears fair given the specialized nature of naval vessel maintenance. 2. Competition dynamics show a moderate level of interest with three bidders. 3. Risk indicators are moderate, typical for complex defense maintenance contracts. 4. Performance context is tied to the operational readiness of a key naval asset. 5. Sector positioning is within the defense shipbuilding and repair industry.

Value Assessment

Rating: fair

The contract value of approximately $34 million for the maintenance of the USS Jackson (LCS-6) appears within a reasonable range for specialized naval vessel upkeep. Benchmarking against similar contracts for Littoral Combat Ship (LCS) maintenance is challenging due to the unique configurations and service lives of these vessels. However, the firm-fixed-price nature of the award suggests an attempt to control costs upfront. Further analysis would require detailed cost breakdowns and comparison with historical maintenance costs for this class of ship.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified contractors were solicited. The presence of three bidders suggests a reasonable level of competition for this specialized service. A higher number of bidders might typically lead to more aggressive pricing, but the technical complexity and specific requirements for LCS maintenance can limit the pool of capable firms.

Taxpayer Impact: The full and open competition, with three bidders, provides a degree of assurance that taxpayer funds are being used efficiently by fostering a competitive environment, though the specialized nature of the work may limit the extent of price reduction.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the operational readiness of the USS Jackson. Services delivered include essential maintenance and repair to keep the LCS-6 in active service. The geographic impact is centered around the vessel's homeport and maintenance facilities, likely in California. Workforce implications include employment for skilled tradespeople in shipbuilding and repair sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise beyond the scope of the firm-fixed-price award.
Dependence on a limited number of specialized contractors for future LCS maintenance needs.
Ensuring timely completion to maintain operational readiness of the fleet.

Positive Signals

Awarded under full and open competition, maximizing potential contractor interest.
Firm-fixed-price contract type helps to establish cost certainty.
Experienced contractor likely possesses the necessary expertise for LCS maintenance.

Sector Analysis

The defense shipbuilding and repair sector is characterized by high barriers to entry, specialized labor, and significant government investment. Contracts for naval vessel maintenance are critical for maintaining fleet readiness and are typically awarded through competitive processes. The Littoral Combat Ship program represents a modern class of naval vessels, requiring specific maintenance expertise that may be concentrated among a few key industry players.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the specialized nature of Littoral Combat Ship maintenance, it is likely that larger, established defense contractors or shipyards would be the primary awardees, potentially limiting direct opportunities for small businesses unless they are part of a larger subcontracting team.

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 contract, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is facilitated by the contract award process, which was conducted under full and open competition. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Littoral Combat Ship (LCS) Program
Naval Vessel Maintenance and Repair
Defense Shipbuilding and Repair Contracts
Ship Maintenance and Modernization

Risk Flags

Potential for cost overruns if unforeseen issues arise.
Dependence on specialized contractor capabilities.
Timeliness of delivery critical for fleet readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.0 million to NATIONAL STEEL AND SHIPBUILDING COMPANY. C480/LCS - USS JACKSON (LCS-6) FY20 (DSRA) BASIC AWARD

Who is the contractor on this award?

The obligated recipient is NATIONAL STEEL AND SHIPBUILDING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $34.0 million.

What is the period of performance?

Start: 2019-12-06. End: 2020-11-13.

What is the track record of NATIONAL STEEL AND SHIPBUILDING COMPANY with similar naval maintenance contracts?

NATIONAL STEEL AND SHIPBUILDING COMPANY (NASSCO) has a long history of shipbuilding and repair for the U.S. Navy, including work on various classes of vessels. While specific details on their performance for Littoral Combat Ships (LCS) require deeper investigation into past contracts and performance reviews, NASSCO's extensive experience in naval maintenance suggests a strong capability. Their involvement in constructing and repairing naval assets positions them as a key player. However, a thorough assessment would involve examining their on-time delivery rates, quality of work, and any past performance issues or commendations related to similar complex maintenance projects for the Navy.

How does the awarded amount compare to the estimated cost or budget for this maintenance period?

The provided data indicates an award amount of $33,951,153.51. Without access to the original contract solicitation, estimated cost, or budget allocated for this specific maintenance period, a direct comparison is not possible. However, the fact that it was awarded under full and open competition with three bidders suggests that the pricing was considered competitive by the Department of the Navy. To assess value, one would need to compare this award to the initial government estimate (if available) and potentially to historical spending on similar maintenance tasks for the LCS class, adjusted for inflation and scope differences.

What are the primary risks associated with this specific contract for LCS maintenance?

The primary risks associated with this contract include potential scope creep if unforeseen maintenance issues are discovered that exceed the initial firm-fixed-price agreement, leading to change orders and increased costs. There's also a risk related to the availability of specialized parts and skilled labor required for LCS maintenance, which could cause delays. Furthermore, ensuring the contractor meets the stringent quality and performance standards for naval vessels is critical. The aging nature of some LCS components could also present unexpected challenges. Finally, the dependence on a limited number of qualified shipyards for this specialized maintenance represents a systemic risk to fleet readiness.

How effective is the competition level in ensuring optimal pricing for taxpayers?

The competition level, with three bidders for this contract, is moderately effective in ensuring optimal pricing for taxpayers. Full and open competition generally promotes better pricing than sole-source or limited competition. Having three bidders indicates that there is interest and capability within the market for this type of specialized work. However, the effectiveness is tempered by the fact that the Littoral Combat Ship maintenance is a niche service, potentially limiting the number of truly competitive firms. While three bidders are better than one or two, a larger pool might have driven prices down further. The firm-fixed-price structure also helps lock in costs, but the ultimate value depends on the initial pricing strategy and the contractor's efficiency.

What is the historical spending trend for USS JACKSON (LCS-6) maintenance?

Historical spending data specifically for the USS JACKSON (LCS-6) maintenance is not directly available in the provided data snippet. This award represents a single maintenance event for FY20. To understand historical spending trends, one would need to access contract databases and analyze all previous maintenance, repair, and overhaul (MRO) contracts awarded for LCS-6 across different fiscal years. This would involve identifying recurring maintenance needs, the frequency of major overhauls, and the associated costs over the vessel's service life. Comparing these trends would reveal patterns in spending and potential cost efficiencies or escalations over time.

Are there any specific performance metrics or key performance indicators (KPIs) associated with this contract?

The provided data does not explicitly list specific performance metrics or Key Performance Indicators (KPIs) for this contract. However, for naval vessel maintenance contracts, typical KPIs often include on-time completion of scheduled maintenance, adherence to quality standards (e.g., defect rates), cost control within the awarded amount, and successful completion of sea trials or operational readiness tests post-maintenance. The firm-fixed-price nature implies that meeting the defined scope of work within budget is a primary performance expectation. The Navy would likely have internal metrics and inspection processes to evaluate the contractor's performance against the contract requirements.

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: N0002417R4325

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 2798 HARBOR DR, SAN DIEGO, CA, 92113

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,840,112

Exercised Options: $33,951,154

Current Obligation: $33,951,154

Actual Outlays: $10,012,498

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002418D4327

IDV Type: IDC

Timeline