Navy awards $2.2M for USS Howard DDG83 SRA Bundle 4, highlighting shipbuilding and repair needs

Contract Overview

Contract Amount: $2,239,258 ($2.2M)

Contractor: Sumitomo Heavy Industries, Ltd

Awarding Agency: Department of Defense

Start Date: 2025-03-14

End Date: 2025-12-19

Contract Duration: 280 days

Daily Burn Rate: $8.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS HOWARD DDG83 FY25 5C1 SRA BUNDLE 4

Plain-Language Summary

Department of Defense obligated $2.2 million to SUMITOMO HEAVY INDUSTRIES, LTD for work described as: USS HOWARD DDG83 FY25 5C1 SRA BUNDLE 4 Key points: 1. Contract awarded to a single entity suggests specialized capabilities or limited market availability for this specific repair bundle. 2. The firm-fixed-price structure aims to control costs, but potential for change orders exists in complex ship repair. 3. Delivery order for FY25 indicates ongoing maintenance and readiness requirements for naval assets. 4. The contract value, while significant, is a component of broader naval shipbuilding and repair budgets. 5. Benchmarking against similar ship repair contracts is crucial to assess value for money. 6. The absence of small business set-aside flags potential for larger prime contractors to dominate.

Value Assessment

Rating: fair

The contract value of approximately $2.24 million for a Ship Repair and Alteration (SRA) bundle for the USS Howard (DDG83) appears moderate for specialized naval vessel maintenance. Without detailed scope of work and comparison to similar SRA bundles for Arleigh Burke-class destroyers, a precise value-for-money assessment is challenging. However, the firm-fixed-price contract type suggests an attempt to establish a clear cost ceiling. Benchmarking against historical SRA awards for this class of vessel and considering the specific technical requirements will be key to determining if this represents a competitive and fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The specific number of bidders is not provided, but the fact that it was competed broadly suggests an effort to achieve competitive pricing and access a range of qualified ship repair providers. The outcome of this competition, leading to a single award, implies that Sumitomo Heavy Industries, Ltd. offered the most advantageous proposal based on the evaluation criteria.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation among contractors, leading to better value for public funds.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the USS Howard (DDG83) remains operational and combat-ready. Services delivered include specialized ship repair and alteration, crucial for maintaining the structural integrity and functionality of a guided-missile destroyer. The geographic impact is likely concentrated around the shipyard performing the work, potentially supporting local economies and skilled labor in that region. Workforce implications include employment for skilled tradespeople such as welders, pipefitters, electricians, and naval architects involved in the repair and modification process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during complex ship repair, despite the firm-fixed-price structure.
Dependence on a single contractor for a critical repair bundle could pose risks if performance issues or delays occur.
Limited transparency on the specific technical scope and evaluation criteria makes independent value assessment difficult.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract type provides cost certainty for this specific scope of work.
Contract awarded to a known entity in shipbuilding and repair, potentially indicating established expertise.

Sector Analysis

The shipbuilding and repair sector is a critical component of national defense, involving complex engineering, specialized labor, and significant capital investment. This contract falls within the broader category of naval vessel maintenance and modernization, a substantial area of federal spending. The market includes a mix of large, established shipbuilders and smaller, specialized repair firms. Benchmarking this award against other contracts for similar classes of vessels (e.g., Arleigh Burke-class destroyers) and considering the specific scope of the SRA bundle is essential for understanding its place within the sector's spending landscape.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests the scope of work or the nature of the prime contractor, Sumitomo Heavy Industries, Ltd., likely led to it being awarded to a large business. There is no explicit information on subcontracting plans for small businesses within this specific delivery order. Without this detail, it's difficult to assess the direct impact on the small business ecosystem for this particular award, though larger prime contractors often utilize small businesses for various components and services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm-fixed-price nature of the contract provides a degree of cost control. Accountability measures would include adherence to the delivery schedule, quality of work performed, and compliance with technical specifications. Transparency is facilitated by the contract award notice, which provides basic details. Further oversight might involve the Naval Sea Systems Command (NAVSEA) and potentially the Government Accountability Office (GAO) if disputes or protests arise. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Naval Shipbuilding
Ship Maintenance and Repair
Arleigh Burke-class Destroyer Program
Department of the Navy Contracts
Defense Procurement

Risk Flags

Potential for cost growth due to unforeseen repair issues.
Risk of schedule delays impacting naval operational readiness.
Dependence on a single contractor for critical repair tasks.
Limited visibility into specific technical scope and evaluation criteria.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.2 million to SUMITOMO HEAVY INDUSTRIES, LTD. USS HOWARD DDG83 FY25 5C1 SRA BUNDLE 4

Who is the contractor on this award?

The obligated recipient is SUMITOMO HEAVY INDUSTRIES, LTD.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.2 million.

What is the period of performance?

Start: 2025-03-14. End: 2025-12-19.

What is the track record of Sumitomo Heavy Industries, Ltd. with the Department of Defense, particularly in ship repair and alteration?

Sumitomo Heavy Industries, Ltd. (SHI) is a major Japanese conglomerate with a significant presence in shipbuilding and heavy industries. While specific details on their track record solely within the U.S. Department of Defense for ship repair and alteration are not immediately available from this data snippet, SHI has a long history of constructing various types of vessels, including naval ships for the Japan Maritime Self-Defense Force and commercial clients globally. Their involvement in U.S. defense contracts, especially for repair and alteration, would likely be subject to specific solicitations and competitive bidding processes. Assessing their past performance would require reviewing historical contract awards, performance evaluations (e.g., CPARS), and any reported issues or successes on similar projects within the DoD or allied navies. Their global reputation in complex engineering projects suggests a capacity for high-quality work, but specific DoD performance data is crucial for a complete assessment.

How does the $2.24 million award for the USS Howard SRA Bundle 4 compare to similar repair contracts for Arleigh Burke-class destroyers?

Comparing the $2.24 million award for the USS Howard (DDG83) SRA Bundle 4 requires access to a database of similar contracts. Arleigh Burke-class destroyers undergo various maintenance availabilities, including routine repairs, modernization, and upgrades. The cost of these availabilities can vary significantly based on the scope of work, the specific systems being addressed, the shipyard's location and overhead, and the duration of the availability. A 'bundle' typically refers to a specific set of tasks or systems. Without knowing the precise technical requirements of 'SRA Bundle 4' (e.g., hull work, propulsion system repairs, electronics upgrades), a direct comparison is difficult. However, major overhauls or modernization efforts for this class can range from tens to hundreds of millions of dollars. This $2.24 million award likely represents a specific, contained repair package rather than a full-ship overhaul, making it a moderate-sized contract within the broader context of DDG maintenance.

What are the primary risks associated with this specific contract, considering it's a firm-fixed-price delivery order for ship repair?

The primary risks associated with this firm-fixed-price delivery order for ship repair, despite its cost-control benefits, revolve around the inherent uncertainties in naval vessel maintenance. Firstly, unforeseen conditions discovered during the repair process (e.g., hidden corrosion, unexpected material degradation, or complex system interdependencies) can lead to scope creep and requests for contract modifications, potentially increasing the total cost beyond the initial fixed price. Secondly, the performance risk lies with Sumitomo Heavy Industries, Ltd.; delays in delivery or substandard workmanship could impact the USS Howard's operational readiness, leading to cascading effects on naval deployment schedules. Thirdly, while competition was full and open, the specific nature of the 'SRA Bundle 4' might require highly specialized skills or equipment, potentially limiting the pool of truly capable bidders and increasing reliance on the awarded contractor's expertise and integrity. Finally, the firm-fixed-price structure could incentivize the contractor to cut corners on quality or labor hours if not rigorously overseen, although quality assurance measures should mitigate this.

What does the 'Ship Building and Repairing' (336611) NAICS code suggest about the nature of this contract and the industry?

The North American Industry Classification System (NAICS) code 336611, 'Ship Building and Repairing,' indicates that this contract falls under the primary economic activity of constructing, fabricating, and assembling ships and boats, as well as repairing and converting them. This sector is characterized by large-scale, complex projects requiring specialized engineering, skilled labor (welders, pipefitters, electricians, etc.), significant capital investment in facilities (dry docks, shipyards), and adherence to stringent safety and quality standards. Contracts under this code can range from the construction of new vessels to extensive overhauls, conversions, and routine maintenance. The presence of this code signifies that the work involves the physical manipulation and assembly of large metal structures, integration of complex mechanical and electrical systems, and adherence to maritime regulations and naval specifications. It highlights the critical role of the shipbuilding and repair industry in supporting both commercial maritime activities and national defense.

What are the potential implications of awarding this contract to a foreign entity (Sumitomo Heavy Industries, Ltd.) for U.S. naval readiness and industrial base?

Awarding ship repair and alteration contracts to foreign entities like Sumitomo Heavy Industries, Ltd. can have several implications for U.S. naval readiness and the domestic industrial base. On the readiness front, if the repair is performed overseas or requires extensive foreign logistical support, it could potentially extend the downtime of the vessel or complicate its return to operational status compared to repairs conducted domestically. From an industrial base perspective, such awards, especially if they become frequent or involve core capabilities, could potentially divert work and revenue away from U.S. shipyards, impacting their financial health, workforce retention, and capacity for future defense needs. However, there can be strategic advantages, such as leveraging specialized expertise or facilities available abroad, or cost efficiencies. U.S. policy often prioritizes domestic sourcing for critical defense articles and services, but exceptions may be made based on specific needs, competition, or international partnerships. The long-term impact depends on the frequency and nature of such awards relative to the overall health and capacity of the U.S. shipbuilding and repair industrial base.

How does the 'Delivery Order' (AW) contract action type differ from other potential award types for this service, and what does it imply?

A 'Delivery Order' (AW) is a specific type of contract action typically issued under an existing indefinite-delivery, indefinite-quantity (IDIQ) contract, a basic ordering agreement (BOA), or sometimes a requirements contract. It signifies a formal order placed for a specific quantity of goods or services at a predetermined price, with a specified delivery date. In this context, it means the $2.24 million award is for a defined scope of work ('SRA Bundle 4') for the USS Howard, to be completed within a specific timeframe (delivery date implied by the period of performance). This differs from a standalone, one-time contract awarded from scratch. The use of a delivery order suggests that the Navy likely has a broader contract vehicle in place with Sumitomo Heavy Industries, Ltd. (or potentially a contracting vehicle that allows for orders to be placed with multiple sources, though this specific award is to one entity) to procure various ship repair and alteration services as needed. This approach allows for flexibility and potentially faster procurement of services compared to initiating a new full-scale contract for each individual requirement.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 19, NATSUSHIMACHO, YOKOSUKA

Business Categories: Category Business, Foreign Owned, International Organization, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $2,239,258

Exercised Options: $2,239,258

Current Obligation: $2,239,258

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6264921G0002

IDV Type: BOA

Timeline