DoD's $46.4M delivery order for USS Manchester maintenance awarded to BAE Systems Maritime Solutions

Contract Overview

Contract Amount: $46,394,082 ($46.4M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2021-07-12

End Date: 2022-08-05

Contract Duration: 389 days

Daily Burn Rate: $119.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C420A USS MANCHESTER (LCS-14) FY21 DSRA DELIVERY ORDER

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $46.4 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: C420A USS MANCHESTER (LCS-14) FY21 DSRA DELIVERY ORDER Key points: 1. Contract value represents a significant investment in naval readiness and ship sustainment. 2. BAE Systems, a major defense contractor, secured this order through full and open competition. 3. The contract duration of 389 days suggests a comprehensive scope of repair and modernization. 4. Fixed-price contract type aims to control costs and provide predictability for the government. 5. The award falls within the Ship Building and Repairing sector, crucial for maintaining naval fleet capabilities. 6. Geographic concentration in California highlights regional defense industrial base activity.

Value Assessment

Rating: good

The $46.4 million award for the USS Manchester (LCS-14) FY21 DSRA appears reasonable given the scope of a Dry-docking, Selected Restricted Availability (DSRA). DSRAs typically involve extensive maintenance, repair, and modernization activities that can be costly. Benchmarking against similar DSRA contracts for Littoral Combat Ships (LCS) would provide a more precise value assessment, but the price seems aligned with the complexity of maintaining a modern naval vessel.

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 bidders had the opportunity to submit proposals. The presence of a single award (no=1) suggests that BAE Systems Maritime Solutions offered the most advantageous proposal based on the evaluation criteria. The competitive process is expected to have driven a fair market price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions, ensuring that government funds are used efficiently.

Public Impact

The primary beneficiary is the U.S. Navy, ensuring the USS Manchester (LCS-14) is maintained in operational readiness. Services delivered include critical repairs, maintenance, and potential upgrades to extend the ship's service life. The geographic impact is concentrated in San Diego, California, supporting the regional defense industrial base and associated workforce. This contract supports skilled labor within the shipbuilding and repair sector, including technicians, engineers, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extensive repair work.
Dependence on a single contractor for critical maintenance could pose risks if performance falters.
Scope creep could lead to increased costs and extended timelines beyond the initial estimates.

Positive Signals

Fixed-price contract type helps mitigate cost escalation risks.
Award to an established contractor like BAE Systems suggests a level of confidence in their capabilities.
Full and open competition indicates a robust bidding process that likely secured competitive pricing.

Sector Analysis

The shipbuilding and repair sector is a vital component of the U.S. defense industrial base, responsible for maintaining and modernizing the Navy's fleet. This contract falls under NAICS code 336611 (Ship Building and Repairing). Spending in this sector is cyclical and heavily influenced by defense budgets and strategic priorities. Comparable spending benchmarks would involve analyzing other DSRA contracts for similar vessel classes within the Navy's budget.

Small Business Impact

This contract does not appear to have a small business set-aside (sb=false). While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors on this delivery order. 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 primarily 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 payment schedules. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Littoral Combat Ship (LCS) Program
Naval Ship Maintenance and Repair Contracts
Defense Logistics Agency (DLA) Support Contracts
Shipbuilding and Repair Industrial Base Support

Risk Flags

Potential for schedule slippage
Risk of cost overruns
Contractor performance variability
Dependence on specific shipyard capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.4 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. C420A USS MANCHESTER (LCS-14) FY21 DSRA DELIVERY ORDER

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 $46.4 million.

What is the period of performance?

Start: 2021-07-12. End: 2022-08-05.

What is BAE Systems Maritime Solutions' track record with similar naval maintenance contracts?

BAE Systems Maritime Solutions has a significant track record in naval shipbuilding and repair, including extensive experience with various classes of U.S. Navy vessels. They have been awarded numerous contracts for maintenance, modernization, and repair services, often involving complex availabilities like DSRAs. Their history includes work on destroyers, amphibious assault ships, and aircraft carriers, demonstrating a broad capability. Analyzing past performance metrics, on-time delivery rates, and cost control on previous similar contracts would provide a more granular assessment of their suitability for this specific USS Manchester maintenance. However, their established presence and repeated awards suggest a generally positive performance history within the naval sector.

How does the $46.4 million cost compare to other DSRA contracts for LCS-class ships?

Benchmarking the $46.4 million cost against other Dry-docking, Selected Restricted Availability (DSRA) contracts for Littoral Combat Ships (LCS) is crucial for a precise value assessment. LCS DSRAs can vary significantly in cost due to the specific scope of work, the ship's condition, and the shipyard's location and overhead. Factors such as the number of systems requiring repair or upgrade, the extent of hull work, and the duration of the availability all influence the final price. Without direct comparative data on recent LCS DSRAs, it's challenging to definitively state if this award is high or low. However, given the complexity and duration (389 days), the figure appears within a plausible range for such a comprehensive maintenance period for a modern naval asset.

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

The primary risks associated with this contract include potential schedule delays if unforeseen maintenance issues are discovered during the availability, which could impact the USS Manchester's operational readiness timeline. Cost overruns are another risk, particularly if the fixed-price contract doesn't adequately account for all potential complexities or if change orders become necessary. Performance risk also exists, where the quality of the repair and maintenance work might not meet the Navy's stringent standards, requiring rework or leading to premature failures. Finally, there's a dependency risk on BAE Systems Maritime Solutions; any disruption to their operations or workforce could affect the timely completion of the contract.

How effective is the 'full and open competition' strategy in ensuring value for this type of naval maintenance contract?

The 'full and open competition' strategy is generally effective in ensuring value for naval maintenance contracts by fostering a competitive environment. This approach allows multiple qualified shipyards to bid, driving down prices and encouraging innovation in service delivery. The Navy can select the offer that provides the best overall value, considering not just price but also technical approach, past performance, and schedule. For a complex availability like a DSRA, competition helps ensure that the Navy receives high-quality work at a fair market price. However, the effectiveness can be influenced by the number of capable bidders and the clarity of the solicitation requirements. If only a few shipyards can realistically perform the work, the competitive pressure might be less intense.

What is the historical spending trend for USS Manchester (LCS-14) maintenance and repair?

Analyzing the historical spending trend for USS Manchester (LCS-14) maintenance and repair requires accessing detailed contract data over its service life. This specific $46.4 million award represents a significant single investment for FY21 DSRA. To understand the trend, one would need to aggregate all previous and subsequent maintenance, repair, and modernization contracts awarded for this vessel. This would reveal the average annual spending, the frequency and cost of major availabilities (like DSRAs), and any patterns of increasing or decreasing maintenance costs as the ship ages. Without access to that comprehensive historical data, this single award provides a snapshot but not a trend.

What are the implications of this contract being a 'Firm Fixed Price' type?

A 'Firm Fixed Price' (FFP) contract type means that the contractor, BAE Systems Maritime Solutions, is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This places the primary risk of cost overruns on the contractor. For the Navy, this offers significant cost certainty and predictability, making budgeting easier. It incentivizes the contractor to manage costs efficiently and perform the work as economically as possible. However, if the scope of work significantly changes or unforeseen issues arise that were not reasonably foreseeable, the Navy might need to issue contract modifications, which could potentially increase the price. For complex availabilities, sometimes an FFP with economic price adjustments or a cost-plus contract might be considered if significant uncertainties exist.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

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

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

Financial Breakdown

Contract Ceiling: $46,394,082

Exercised Options: $46,394,082

Current Obligation: $46,394,082

Actual Outlays: $37,559,423

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002418D4325

IDV Type: IDC

Timeline