Navy awards $2.19M contract for TGI requirements to Sumitomo Heavy Industries, Ltd

Contract Overview

Contract Amount: $2,190,713 ($2.2M)

Contractor: Sumitomo Heavy Industries, Ltd

Awarding Agency: Department of Defense

Start Date: 2025-11-28

End Date: 2026-04-28

Contract Duration: 151 days

Daily Burn Rate: $14.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE CONTRACTOR SHALL ACCOMPLISH THE TGI REQUIREMENTS LISTED IN ATTACHMENTS OF SECTION J.

Plain-Language Summary

Department of Defense obligated $2.2 million to SUMITOMO HEAVY INDUSTRIES, LTD for work described as: THE CONTRACTOR SHALL ACCOMPLISH THE TGI REQUIREMENTS LISTED IN ATTACHMENTS OF SECTION J. Key points: 1. Contract value appears reasonable for specialized shipbuilding and repair services. 2. Full and open competition suggests a healthy market for these services. 3. Contract duration of 151 days indicates a focused scope of work. 4. Fixed-price contract type shifts risk to the contractor. 5. No small business set-aside noted, potentially limiting opportunities for smaller firms. 6. Contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The contract value of $2.19 million for shipbuilding and repair services seems within a reasonable range for specialized work. Benchmarking against similar, smaller-scale naval repair or modification contracts would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for the government, as it caps costs. However, without detailed scope of work and comparison data, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of the Navy sought proposals from all responsible sources. This method typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the designation suggests a robust competition.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it is expected to drive down prices through market forces and encourage innovation from a wider pool of potential contractors.

Public Impact

The primary beneficiary is the Department of the Navy, receiving specialized TGI (Technical Guidance and Instructions) services. Services delivered likely involve critical maintenance, repair, or modification of naval vessels. Geographic impact is likely concentrated around naval bases or shipyards where Sumitomo Heavy Industries operates or can readily deploy. Workforce implications include skilled labor in shipbuilding, repair, and potentially specialized technical fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the TGI requirements makes it difficult to assess the full scope and potential for cost overruns.
No indication of small business subcontracting goals, which could limit opportunities for smaller businesses in the supply chain.
The delivery order nature suggests this is one of potentially many orders under a larger contract, making it hard to assess total program value and performance in isolation.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a competitive pricing environment.
Contract awarded to a known entity (Sumitomo Heavy Industries, Ltd.) with presumed experience in the sector.

Sector Analysis

This contract falls within the shipbuilding and repair sector, a critical component of national defense and maritime infrastructure. The market is characterized by high barriers to entry due to specialized skills, capital investment, and regulatory requirements. Spending in this sector is often driven by defense budgets and the need to maintain aging fleets or modernize naval capabilities. Comparable spending benchmarks would typically involve other naval vessel maintenance, repair, and overhaul contracts.

Small Business Impact

The contract does not indicate any small business set-aside provisions. This means the competition was open to all responsible sources, including large businesses. While this maximizes competition, it may limit direct opportunities for small businesses unless they are prime contractors on other contracts or are involved as subcontractors. The absence of specific subcontracting plans or goals in the provided data makes it difficult to assess the downstream impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to meet specifications within budget. Transparency is facilitated by the contract award notice, but detailed performance metrics and oversight reports are typically internal or subject to specific disclosure rules. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair Contracts
Shipbuilding and Conversion Contracts
Defense Logistics Agency (DLA) Support Contracts
Military Sealift Command (MSC) Contracts

Risk Flags

Potential for scope creep if TGI requirements are not clearly defined.
Risk of quality compromise under fixed-price if unforeseen issues arise.
Limited visibility into overall IDIQ contract performance from a single delivery order.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.2 million to SUMITOMO HEAVY INDUSTRIES, LTD. THE CONTRACTOR SHALL ACCOMPLISH THE TGI REQUIREMENTS LISTED IN ATTACHMENTS OF SECTION J.

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: 2025-11-28. End: 2026-04-28.

What specific TGI requirements are covered under this contract, and how do they align with the contractor's known capabilities?

The provided data indicates the contract requires the contractor to 'ACCOMPLISH THE TGI REQUIREMENTS LISTED IN ATTACHMENTS OF SECTION J.' Without access to Section J, the specific TGI requirements remain unknown. Sumitomo Heavy Industries, Ltd. is a major global engineering company with significant experience in shipbuilding, heavy industries, and infrastructure projects. Their capabilities likely encompass complex engineering, manufacturing, and repair services relevant to naval vessels. However, the precise nature of the TGI requirements (e.g., specific systems, upgrades, maintenance schedules, or new construction elements) would determine the exact alignment and the level of specialized expertise needed. Further analysis would require reviewing the detailed SOW in Section J to confirm the scope and Sumitomo's specific role.

How does the $2.19 million contract value compare to similar shipbuilding and repair delivery orders awarded by the Navy?

Benchmarking this $2.19 million delivery order requires comparison with similar contracts for shipbuilding and repair services, specifically those awarded under full and open competition and with comparable durations (151 days). Without access to a comprehensive database of past Navy contracts, a precise comparison is difficult. However, this value appears moderate for specialized naval work. Larger contracts for new vessel construction or major overhauls can run into hundreds of millions or billions of dollars. Smaller contracts for routine maintenance or specific component repairs might be in the tens or hundreds of thousands. This $2.19 million figure suggests a scope beyond routine maintenance but likely less than a full-scale new build or major modernization program, possibly related to specific system upgrades, mid-life repairs, or specialized modifications.

What are the potential risks associated with a firm fixed-price contract for specialized shipbuilding and repair services?

The primary risk with a firm fixed-price (FFP) contract for specialized shipbuilding and repair lies in the potential for the contractor to cut corners on quality or scope to maintain profitability if unforeseen issues arise. While FFP shifts cost risk to the contractor, complex projects like shipbuilding and repair can encounter unexpected technical challenges, material cost fluctuations, or labor shortages. If the TGI requirements are not perfectly defined or if the work proves more complex than anticipated, the contractor might face losses or attempt to reduce quality. Conversely, the government risks paying a premium if the contractor's initial bid was overly conservative due to perceived risks. Robust government oversight and clear contract specifications are crucial to mitigate these risks and ensure the delivered work meets all quality and performance standards.

What is the significance of this contract being a 'delivery order' rather than a standalone contract?

This contract being a 'delivery order' signifies that it is a task order issued under a pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar master agreement. This implies that the Department of the Navy has already established a broader contract vehicle with Sumitomo Heavy Industries, Ltd. (or a parent entity) for a range of potential services. The $2.19 million represents the value of a specific task or set of tasks within that larger framework. The significance is that the initial competition and contract negotiation (including terms, conditions, and potentially pricing structures) likely occurred when the IDIQ contract was awarded. This delivery order represents a specific call-off against that established agreement, allowing for more agile procurement of defined services as needed. It also means that the total spending under the overarching IDIQ contract could be significantly higher than this single delivery order.

How does the contractor's track record influence the assessment of this specific contract's success potential?

Sumitomo Heavy Industries, Ltd. is a large, established Japanese conglomerate with extensive experience in heavy industries, including shipbuilding and complex engineering projects. Their track record suggests a high capacity for undertaking significant industrial contracts. For this specific $2.19 million delivery order, their established presence and presumed expertise in shipbuilding and repair are positive indicators. A history of successful contract performance, particularly with government or defense clients, would further bolster confidence in their ability to meet the TGI requirements effectively and on time. Conversely, any significant past performance issues, such as cost overruns, schedule delays, or quality deficiencies on similar projects, would raise concerns and warrant closer scrutiny of this contract's execution and oversight. Without specific performance data on Sumitomo's prior contracts with the DoD, we rely on their general industry reputation.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1-1, OSAKI 2-CHOME, SHINAGAWA-KU

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

Financial Breakdown

Contract Ceiling: $2,190,713

Exercised Options: $2,190,713

Current Obligation: $2,190,713

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6264921D0006

IDV Type: IDC

Timeline