Navy awards $6.5M for USS Boxer propulsion controls, highlighting specialized shipbuilding repair needs

Contract Overview

Contract Amount: $6,533,432 ($6.5M)

Contractor: Propulsion Controls Engineering

Awarding Agency: Department of Defense

Start Date: 2025-02-03

End Date: 2026-04-03

Contract Duration: 424 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C460B- USS BOXER (LHD-4) FY25 DO EM 0032 DELIVERY ORDER SSSD-HM&E-25-0032

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $6.5 million to PROPULSION CONTROLS ENGINEERING for work described as: C460B- USS BOXER (LHD-4) FY25 DO EM 0032 DELIVERY ORDER SSSD-HM&E-25-0032 Key points: 1. Contract addresses critical ship maintenance for a key naval asset. 2. Specialized engineering services required, indicating a niche market. 3. Fixed-price contract type aims to control costs for the government. 4. Delivery order structure suggests a need for specific, timely repairs. 5. Competition was open, but with exclusions, warranting further review. 6. Geographic concentration in California for this specific repair work.

Value Assessment

Rating: good

The contract value of $6.5 million for propulsion controls on the USS Boxer appears reasonable given the specialized nature of naval ship repair. Benchmarking against similar complex HM&E (Hull, Mechanical, and Equipment) contracts for LHD-class vessels would provide a more precise value assessment. The firm fixed-price structure is a positive indicator for cost control, assuming the scope was well-defined. Without specific per-unit cost data for the services rendered, a direct comparison is challenging, but the overall award seems aligned with the complexity of maintaining a capital-intensive naval asset.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' While this indicates an initial intent for broad competition, the exclusion of specific sources suggests that only a subset of potential offerors were considered. The number of bidders is not provided, making it difficult to fully assess the level of competition. This approach might be used when specific technical capabilities or past performance are critical, potentially limiting price discovery compared to a truly unrestricted full-and-open competition.

Taxpayer Impact: The exclusion of sources, even with an initial open competition, could potentially limit the number of competitive bids received, possibly impacting the final price achieved for taxpayers. However, if the excluded sources were not capable of meeting the stringent requirements, the competition among the remaining qualified bidders may still have yielded a fair price.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the USS Boxer (LHD-4) remains a capable asset. Services delivered include specialized engineering and repair for the ship's propulsion control systems. Geographic impact is concentrated in California, where the repair work is likely to be performed. Workforce implications include employment for skilled engineers and technicians in the maritime defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to source exclusions, impacting price.
Reliance on specialized contractors may create single-source dependencies in the future.
Scope definition in delivery orders can sometimes lead to change orders and cost overruns if not managed tightly.

Positive Signals

Firm Fixed Price contract type helps mitigate cost uncertainty for the government.
Awarding to a contractor with relevant expertise in propulsion controls is a positive signal.
Delivery order structure allows for specific, targeted repairs as needed.

Sector Analysis

The shipbuilding and repair sector is a critical component of national defense, characterized by high technical barriers to entry and significant government investment. This contract falls within the broader category of naval vessel maintenance and modernization. The market is often dominated by a few large prime contractors and a network of specialized subcontractors. Spending in this area is driven by fleet readiness requirements, aging vessel lifecycles, and evolving technological demands. Comparable spending benchmarks would typically involve analyzing other contracts for similar LHD-class ship maintenance or propulsion system overhauls.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of naval propulsion controls and the likely requirement for extensive experience and certifications, it is probable that the prime contractor is a large business. Subcontracting opportunities for small businesses may exist, particularly for specific components or labor, but this contract does not appear to be directly structured to benefit the small business ecosystem through a set-aside.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order under a larger contract vehicle, it is subject to the terms and conditions of that vehicle. Accountability measures are embedded in the firm fixed-price structure and performance requirements. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Propulsion Systems Maintenance
Department of Defense Procurement
Naval Vessel Modernization

Risk Flags

Potential for limited competition due to source exclusions.
Reliance on specialized contractor capabilities.
Complexity of naval ship repair can introduce unforeseen issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.5 million to PROPULSION CONTROLS ENGINEERING. C460B- USS BOXER (LHD-4) FY25 DO EM 0032 DELIVERY ORDER SSSD-HM&E-25-0032

Who is the contractor on this award?

The obligated recipient is PROPULSION CONTROLS ENGINEERING.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $6.5 million.

What is the period of performance?

Start: 2025-02-03. End: 2026-04-03.

What is the track record of the contractor, Propulsion Controls Engineering, with the Department of the Navy, particularly on similar vessel classes?

Propulsion Controls Engineering (PCE) has a history of performing work for the Department of the Navy, often related to shipboard systems and controls. Their specific experience with LHD-class vessels and propulsion systems is crucial for assessing their capability to execute this contract successfully. Reviewing past performance evaluations and contract history would reveal their reliability, quality of work, and adherence to schedules and budgets on previous Navy contracts. A strong track record suggests a lower risk of performance issues and a higher likelihood of successful project completion within the awarded terms.

How does the awarded amount of $6.5 million compare to the estimated cost or historical spending for similar propulsion control upgrades or repairs on LHD-class ships?

Benchmarking the $6.5 million award against historical data for similar work on LHD-class ships is essential for a value-for-money assessment. If comparable contracts for propulsion control systems on vessels like the USS Boxer (LHD-4) or its sister ships typically range from $5 million to $8 million, then this award appears within a reasonable range. Factors such as the specific scope of work (e.g., repair vs. upgrade, extent of system overhaul), the year of the award, and the prevailing economic conditions influence these costs. A detailed analysis would involve comparing the labor hours, material costs, and overhead rates against industry standards and previous Navy procurements for similar services.

What are the specific risks associated with the 'Full and Open Competition After Exclusion of Sources' approach for this contract?

The primary risk of 'Full and Open Competition After Exclusion of Sources' is the potential for reduced competition, which could lead to higher prices than a truly unrestricted competition might yield. By excluding certain sources, the pool of potential bidders is narrowed, potentially eliminating highly competitive firms. This approach is typically justified when specific technical expertise, proprietary technology, or unique capabilities are required that only a limited number of contractors possess. The risk lies in whether the exclusions were truly necessary and if the remaining competition was sufficient to ensure fair market pricing. If the excluded sources were capable and could have offered competitive bids, taxpayers may have paid a premium.

What is the expected impact of this contract on the operational readiness of the USS Boxer (LHD-4) and the broader U.S. Navy fleet?

This contract directly impacts the operational readiness of the USS Boxer (LHD-4) by ensuring its propulsion control systems are maintained and functional. Effective propulsion is critical for a warship's ability to maneuver, deploy, and perform its mission effectively. By addressing these specific maintenance needs, the contract helps prevent potential mission failures or delays caused by equipment malfunctions. For the broader fleet, maintaining the readiness of individual vessels like the Boxer contributes to the overall naval force projection capability and responsiveness to global security challenges. Timely and effective repairs reduce the likelihood of extended downtime and ensure the ship can meet its deployment schedules.

Are there any indications of cost overruns or contract modifications in previous similar contracts awarded to Propulsion Controls Engineering by the Navy?

To assess the risk of cost overruns, it's necessary to examine Propulsion Controls Engineering's contract modification history with the Navy on similar projects. A pattern of frequent or significant change orders and cost overruns on past contracts could indicate issues with initial scope definition, project management, or unforeseen technical challenges. Conversely, a history of minimal modifications and adherence to the original contract value suggests effective planning and execution. Accessing contract modification data and performance reports for PCE's previous Navy contracts would provide insight into their cost control performance and the likelihood of this current contract remaining within its awarded value.

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 AFTER EXCLUSION OF SOURCES

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

Address: 1620 RIGEL ST, SAN DIEGO, CA, 92113

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

Financial Breakdown

Contract Ceiling: $6,592,052

Exercised Options: $6,592,052

Current Obligation: $6,533,432

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002422D4469

IDV Type: IDC

Timeline