DoD's $61M LCS Ship Repair Contract Awarded to National Steel and Shipbuilding Company

Contract Overview

Contract Amount: $61,089,861 ($61.1M)

Contractor: National Steel and Shipbuilding Company

Awarding Agency: Department of Defense

Start Date: 2020-09-17

End Date: 2021-11-05

Contract Duration: 414 days

Daily Burn Rate: $147.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C480 LCS USS MONTGOMERY (LCS-8) FY20 DSRA

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $61.1 million to NATIONAL STEEL AND SHIPBUILDING COMPANY for work described as: C480 LCS USS MONTGOMERY (LCS-8) FY20 DSRA Key points: 1. Contract value represents a significant investment in naval readiness and maintenance. 2. Competition dynamics for specialized naval repair services can be limited, potentially impacting pricing. 3. Performance period and fixed-price structure suggest a defined scope and cost control objective. 4. This contract falls within the broader context of naval shipbuilding and repair, a critical sector for national defense. 5. The award to a large, established shipyard indicates a focus on capacity and proven capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this specific repair contract is challenging without detailed scope of work and comparable repair histories. However, the $61 million figure for a Littoral Combat Ship (LCS) deep-sea repair availability (DSRA) suggests a substantial undertaking. Comparing it to other LCS repair contracts or similar vessel maintenance would be necessary for a precise value assessment. The firm fixed-price nature aims to control costs, but the final value depends on the execution and any potential change orders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of two bids suggests a degree of competition, though the specific number of interested parties and the nature of their proposals are not detailed. Full and open competition is generally expected to yield competitive pricing and a wider selection of qualified contractors.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing due to the open bidding process, which aims to prevent cost overruns and ensure the government receives fair value for the repair services.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the operational readiness of the USS Montgomery (LCS-8). The contract delivers critical maintenance and repair services to a key naval asset. The geographic impact is centered in California, where the repair work is likely to be performed. This contract supports skilled labor within the shipbuilding and repair industry, potentially including specialized technicians and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work expands beyond initial estimates.
Dependence on a single contractor for a critical repair window could lead to schedule delays if issues arise.
The complexity of LCS systems may present unforeseen repair challenges impacting cost and timeline.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, suggesting a competitive bidding process.
The contractor, National Steel and Shipbuilding Company, has established experience in shipbuilding and repair.

Sector Analysis

The shipbuilding and repair sector is a vital component of the defense industrial base, characterized by high capital investment, specialized labor, and complex project management. This contract for an LCS DSRA fits within the broader market for naval vessel maintenance and modernization. Comparable spending benchmarks would involve analyzing other major repair availabilities for naval vessels, particularly other LCS class ships, and the associated costs for labor, materials, and overhead.

Small Business Impact

The contract was awarded to National Steel and Shipbuilding Company, a large prime contractor, and there is no indication of a small business set-aside. While the prime contractor may utilize small businesses for subcontracting, the primary award does not directly benefit small businesses through a set-aside. Further analysis would be needed to determine the extent of small business subcontracting opportunities.

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 firm fixed-price contract terms, requiring delivery of specified services within the agreed-upon cost. Transparency is facilitated through contract award databases, though detailed performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Littoral Combat Ship (LCS) Program
Naval Ship Maintenance and Repair
Defense Shipbuilding and Repair Contracts
Department of the Navy Ship Acquisition

Risk Flags

Potential for schedule delays impacting fleet readiness.
Risk of cost increases if unforeseen repair issues arise.
Dependence on specialized parts and supply chain stability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.1 million to NATIONAL STEEL AND SHIPBUILDING COMPANY. C480 LCS USS MONTGOMERY (LCS-8) FY20 DSRA

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 $61.1 million.

What is the period of performance?

Start: 2020-09-17. End: 2021-11-05.

What is the historical track record of National Steel and Shipbuilding Company with similar naval repair contracts?

National Steel and Shipbuilding Company (NASSCO) has a long and extensive history of constructing and repairing naval vessels for the U.S. Navy. They have been involved in building various classes of ships, including destroyers, amphibious assault ships, and oilers. Their experience with major repair availabilities and modernization projects for naval fleets is substantial. While specific data on past LCS repair contracts awarded to NASSCO would require deeper database searches, their general track record in the naval shipbuilding and repair sector is well-established, suggesting a high level of capability and experience relevant to this contract.

How does the awarded amount compare to the estimated cost or budget for this specific LCS repair availability?

The provided data indicates an award amount of $61,089,860.53. Without access to the original contract solicitation, the government's independent cost estimate (ICE), or the awarded contractor's proposal details, it is impossible to definitively state how this award compares to the budget or estimated cost. However, the fact that it was awarded under 'Full and Open Competition' with two bids suggests that the award amount was likely within a competitive range and potentially aligned with government expectations. Further analysis would require accessing the contract file to compare the award to the government's estimate and the competitor's bid.

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

Key risks for this type of contract include scope creep, where unforeseen issues discovered during the repair process necessitate additional work and increase costs beyond the fixed price. Technical risks involve the complexity of modern naval systems, particularly the LCS, which can lead to unexpected repair challenges and delays. Schedule risks are also significant, as delays in returning a vessel to operational status can impact fleet readiness. Contractor performance risk exists, though mitigated by the contractor's experience. Finally, supply chain disruptions for specialized parts could impact timely completion.

What is the typical duration and complexity of a Deep Sea Repair Availability (DSRA) for a Littoral Combat Ship?

A Deep Sea Repair Availability (DSRA) for a Littoral Combat Ship (LCS) is a comprehensive maintenance and repair period designed to address significant maintenance requirements and ensure the vessel's long-term operational readiness. The duration, as indicated by the contract's 414 days (approximately 13.5 months), suggests a substantial undertaking. These availabilities typically involve a wide range of work, including hull maintenance, propulsion system overhauls, combat system diagnostics and repairs, habitability upgrades, and scheduled preventative maintenance. The complexity stems from the advanced technology integrated into the LCS platforms, requiring specialized expertise and equipment.

Analyzing historical spending patterns for LCS maintenance and repair requires access to detailed contract databases and budget information across multiple fiscal years. Generally, as the LCS fleet ma

Analyzing historical spending patterns for LCS maintenance and repair requires access to detailed contract databases and budget information across multiple fiscal years. Generally, as the LCS fleet matures and individual vessels accumulate operational hours, the need for more extensive and costly maintenance and repair availabilities increases. Spending trends would likely show an upward trajectory in maintenance costs as the ships age and require more significant upkeep. Factors such as the number of ships undergoing DSRA in a given year, the specific maintenance requirements, and the competitive landscape for repair services would all influence year-over-year spending.

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: 2

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: $62,217,931

Exercised Options: $61,089,861

Current Obligation: $61,089,861

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