Navy awards $13.6M for USS Essex maintenance, highlighting BAE Systems' role in ship repair

Contract Overview

Contract Amount: $13,628,308 ($13.6M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2023-06-01

End Date: 2025-10-15

Contract Duration: 867 days

Daily Burn Rate: $15.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C460A_USS ESSEX (LHD-2) SY23 CMAV 0100 DELIVERY ORDER AWARD

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $13.6 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: C460A_USS ESSEX (LHD-2) SY23 CMAV 0100 DELIVERY ORDER AWARD Key points: 1. Contract focuses on crucial maintenance and modernization for a key naval asset. 2. BAE Systems, a major defense contractor, secured this delivery order. 3. The award was made under full and open competition, suggesting a competitive bidding process. 4. Fixed-price contract type aims to control costs for the government. 5. The duration of the contract extends into late 2025, indicating a significant scope of work. 6. This award falls within the ship building and repair sector, a critical area for naval readiness.

Value Assessment

Rating: good

The contract value of $13.6 million for a delivery order for ship maintenance appears reasonable given the complexity of naval vessel upkeep. Benchmarking against similar maintenance contracts for LHD-class ships would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control. However, without detailed work breakdown and historical cost data for this specific vessel, 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 multiple qualified bidders had the opportunity to submit proposals. The presence of a competitive process is generally expected to drive better pricing and terms for the government. The specific number of bidders is not provided, but the designation suggests a robust competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it fosters a competitive environment, which typically leads to more cost-effective solutions and prevents potential price gouging.

Public Impact

The U.S. Navy benefits from the enhanced operational readiness and extended service life of the USS Essex (LHD-2). Services delivered include critical maintenance, repair, and potentially modernization activities. The geographic impact is primarily centered in San Diego, California, where BAE Systems Maritime Solutions is located. This contract supports skilled jobs in the maritime defense industry, particularly in shipbuilding and repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during maintenance, despite fixed-price contract.
Dependence on a single contractor for critical maintenance could pose risks if performance issues emerge.
Scope creep could lead to increased costs if additional work is identified and approved beyond the initial scope.

Positive Signals

Firm fixed-price contract type helps mitigate cost uncertainty for the government.
Award to an established contractor like BAE Systems suggests a level of confidence in their capabilities.
Full and open competition indicates a market that can support multiple capable providers.

Sector Analysis

The ship building and repairing sector is a cornerstone of the defense industrial base, essential for maintaining the operational capabilities of naval fleets. This contract for the USS Essex (LHD-2) falls within this critical segment. Spending in this sector is often characterized by large, complex contracts requiring specialized expertise and facilities. Comparable spending benchmarks would involve analyzing other maintenance and repair contracts for similar amphibious assault ships within the Navy's fleet.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on BAE Systems' own subcontracting plan and the availability of qualified small business suppliers for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair Programs
Amphibious Assault Ship Sustainment
Defense Industrial Base Contracts
Shipbuilding and Repair Services

Risk Flags

Potential for scope creep
Contractor performance risk
Schedule adherence challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.6 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. C460A_USS ESSEX (LHD-2) SY23 CMAV 0100 DELIVERY ORDER AWARD

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 $13.6 million.

What is the period of performance?

Start: 2023-06-01. End: 2025-10-15.

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

BAE Systems Maritime Solutions has a significant track record in naval shipbuilding and repair, including extensive work on various classes of U.S. Navy vessels. They are a major defense contractor with substantial experience in complex maintenance, modernization, and overhaul projects. While specific details on past performance for LHD-2 maintenance are not provided in this data snippet, their general experience suggests a capability to handle such contracts. A deeper dive into their contract history, including past performance reviews and any reported issues on similar projects, would be necessary for a comprehensive assessment. Their established presence in San Diego also indicates a long-term commitment and infrastructure for supporting the Pacific Fleet.

How does the $13.6 million award compare to historical spending on USS Essex (LHD-2) maintenance?

Analyzing the $13.6 million award against historical spending for the USS Essex (LHD-2) requires access to historical contract data for this specific vessel. Without that data, a direct comparison is not possible. However, the award represents a single delivery order for a defined period (June 2023 to October 2025). Major maintenance availabilities for large naval vessels can range from tens to hundreds of millions of dollars depending on the scope (e.g., routine maintenance vs. major overhaul or modernization). This $13.6 million likely covers a specific set of tasks within a broader maintenance plan. Understanding the scope of work for this delivery order is crucial for contextualizing its value relative to past expenditures.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns if unforeseen maintenance issues arise, schedule delays impacting fleet readiness, and performance deficiencies by the contractor. The firm fixed-price (FFP) contract type is a key mitigation strategy, placing the cost risk on BAE Systems. The contract duration extending to October 2025 allows for a phased approach to maintenance. Mitigation for schedule and performance risks would involve robust government oversight, including regular progress reviews, inspections, and adherence to defined milestones. The competitive award process also implicitly mitigates risk by selecting a contractor deemed capable.

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

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and the risks of unforeseen issues are manageable. For routine maintenance and repair tasks where requirements are predictable, FFP provides cost certainty for the government. If the maintenance involves significant unknowns or requires extensive troubleshooting, FFP can incentivize the contractor to cut corners to protect their profit margin, potentially impacting quality. In this case, the Navy has likely assessed the scope to be sufficiently defined for an FFP award. The success in achieving value for money will depend on the accuracy of the initial scope definition and the contractor's execution.

What is the significance of this contract within the broader context of naval ship maintenance spending?

This $13.6 million delivery order is a component of the Navy's overall ship maintenance and sustainment budget, which runs into billions of dollars annually. It represents a specific investment in ensuring the operational readiness of a particular asset, the USS Essex (LHD-2). Such awards are critical for extending the service life of aging vessels and maintaining the fleet's capability. While not a massive sum in the context of shipbuilding or major overhauls, it signifies ongoing commitment to the upkeep of the existing fleet. The frequency and value of such delivery orders collectively contribute to the overall health and readiness of naval assets.

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: N0002421R4427

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

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: $13,628,308

Exercised Options: $13,628,308

Current Obligation: $13,628,308

Subaward Activity

Number of Subawards: 61

Total Subaward Amount: $5,850,095

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002422D4449

IDV Type: IDC

Timeline