Navy awards $31.18M for DDG 1001 post-delivery availability, BAE Systems secures contract

Contract Overview

Contract Amount: $31,180,999 ($31.2M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2019-01-18

End Date: 2020-04-10

Contract Duration: 448 days

Daily Burn Rate: $69.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: DDG 1001 POST DELIVERY AVAILABILITY (INDUSTRIAL EFFORTS AND MATERIAL)

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $31.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: DDG 1001 POST DELIVERY AVAILABILITY (INDUSTRIAL EFFORTS AND MATERIAL) Key points: 1. Contract focuses on industrial efforts and material for a specific vessel. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The contract type is Cost Plus Award Fee, which incentivizes performance. 4. Duration of 448 days indicates a significant period for availability efforts. 5. The contract is a delivery order, implying it's part of a larger indefinite-delivery contract. 6. The value is substantial for post-delivery support services.

Value Assessment

Rating: good

The contract value of $31.18 million for post-delivery availability of a DDG 1001 appears reasonable given the scope of industrial efforts and material required. Benchmarking against similar complex naval vessel support contracts would provide a more precise value-for-money assessment. The Cost Plus Award Fee structure allows for flexibility and incentivizes contractor performance, which can lead to better outcomes than fixed-price contracts in complex, evolving situations. However, the potential for cost overruns inherent in CPFF contracts necessitates robust oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, which can lead to more favorable pricing and better quality services for the government. The transparency of the bidding process under this type of competition is a positive indicator for price discovery.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for receiving the best value through a wide range of offers and competitive pricing.

Public Impact

The primary beneficiary is the U.S. Navy, ensuring the operational readiness of the DDG 1001 guided-missile destroyer. Services delivered include essential industrial efforts and material procurement for vessel availability. The geographic impact is likely concentrated around the contractor's facility in San Diego, California, and potentially other locations where materials are sourced. Workforce implications include employment for skilled labor in shipbuilding, repair, and logistics within BAE Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to higher final costs if not managed closely.
Potential for scope creep in industrial efforts and material requirements.
Dependence on a single delivery order for a specific vessel's availability.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Cost Plus Award Fee structure incentivizes contractor performance and quality.
BAE Systems is a major defense contractor with significant experience in shipbuilding and repair.

Sector Analysis

This contract falls within the Ship Building and Repairing sector, a critical component of the defense industrial base. The market for naval vessel maintenance and modernization is dominated by a few large, specialized contractors. Spending in this sector is often project-based and tied to specific vessel classes and their lifecycle requirements. Comparable spending benchmarks would typically involve analyzing the costs associated with post-delivery support for other vessels in the same class or similar naval platforms.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale industrial effort for a major naval platform, it is likely that BAE Systems, as the prime contractor, would engage small businesses as subcontractors for specialized services or material supply. The extent of small business subcontracting would depend on BAE Systems' internal policies and the specific requirements of the availability effort.

Oversight & Accountability

Oversight for this Cost Plus Award Fee contract would be managed by the Department of the Navy, likely through contracting officers and technical representatives. Accountability measures would be tied to performance metrics and award fee criteria. Transparency is facilitated by the contract's award under full and open competition. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DDG 51 Arleigh Burke-class destroyers
Naval Ship Maintenance and Modernization
Defense Industrial Base Support Services
Shipbuilding and Repair Contracts

Risk Flags

Cost Plus Award Fee contract type requires close monitoring of costs and performance.
Potential for undefined scope in 'industrial efforts and material' leading to cost growth.
Reliance on a single contractor for critical vessel availability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. DDG 1001 POST DELIVERY AVAILABILITY (INDUSTRIAL EFFORTS AND MATERIAL)

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 $31.2 million.

What is the period of performance?

Start: 2019-01-18. End: 2020-04-10.

What is the track record of BAE Systems Maritime Solutions in delivering post-delivery availability services for naval vessels?

BAE Systems Maritime Solutions is a significant player in the defense shipbuilding and repair industry, with extensive experience supporting naval vessels. They have a history of performing complex industrial efforts, including maintenance, modernization, and availability support for various classes of ships. Their track record typically involves managing large workforces, intricate supply chains, and adhering to stringent quality and schedule requirements. Specific to post-delivery availability, their performance would be evaluated based on meeting contractual milestones, managing costs effectively within the CPFF structure, and achieving the required operational readiness for the vessel. While this specific contract is for a delivery order, BAE Systems' broader experience with naval platforms suggests a capability to handle such requirements, though detailed performance on past, similar contracts would offer a more granular assessment.

How does the $31.18 million contract value compare to similar post-delivery availability contracts for DDG-class destroyers?

Direct comparison of the $31.18 million value for this specific DDG 1001 post-delivery availability contract requires access to detailed data on similar contracts, which is not publicly available in a readily comparable format. However, post-delivery availability efforts for major naval platforms like destroyers are inherently complex and costly, involving extensive industrial work, specialized labor, and critical material procurement. The value is influenced by factors such as the specific scope of work, the duration of the availability period, the age and condition of the vessel, and the prevailing market rates for labor and materials. Given the advanced nature of the DDG 1001 and the comprehensive industrial efforts and material required, $31.18 million appears to be within a plausible range for such a specialized service. A more precise benchmark would necessitate analyzing the cost per day or cost per major work item across multiple similar contracts.

What are the primary risks associated with this Cost Plus Award Fee (CPFF) contract for post-delivery availability?

The primary risks associated with this Cost Plus Award Fee (CPFF) contract revolve around cost control and performance management. For the government, the risk is that the final cost could exceed initial estimates if the contractor's costs escalate beyond expectations, even with award fees tied to performance. Effective oversight is crucial to monitor allowable costs and ensure the contractor is managing resources efficiently. For the contractor, the risk lies in achieving the performance targets necessary to earn the maximum award fee, which requires diligent execution of industrial efforts and timely material acquisition. There's also a risk of scope creep, where the definition of 'availability efforts and material' might expand, potentially leading to increased costs and schedule delays if not managed through formal contract modifications. Ensuring clear definition of work and robust performance metrics are key mitigation strategies.

How effective is the 'full and open competition' approach in ensuring value for money for this type of specialized naval support contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money, especially for specialized naval support contracts. By allowing all responsible sources to bid, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive proposals that reflect fair market prices and innovative solutions. This broad competition drives down costs and encourages higher quality service delivery as contractors vie for the award. For complex contracts like post-delivery availability, where technical expertise and specialized capabilities are paramount, full and open competition ensures that the most capable and cost-effective providers are considered. The transparency inherent in this process also aids in price discovery and provides a strong basis for government negotiation and oversight, ultimately benefiting taxpayers.

What are the implications of this contract being a 'delivery order' within a larger contract vehicle?

This contract being a 'delivery order' signifies that it is a specific task or order issued under a pre-existing indefinite-delivery contract (IDIQ) or similar contract vehicle. The implications are that the broader terms, conditions, and potentially pricing structures were established when the parent contract was awarded. This delivery order represents a specific call for services and materials related to the DDG 1001's post-delivery availability. It suggests that the government has a longer-term relationship or framework agreement in place with the contractor for such services, allowing for flexibility in ordering specific requirements as needed. For taxpayers, this can mean more streamlined procurement for recurring or anticipated needs, potentially at pre-negotiated rates, but also necessitates careful management of the overall ceiling and scope of the parent contract to prevent uncontrolled spending.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002416R2321

Pricing Type: COST PLUS AWARD FEE (R)

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, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $31,326,362

Exercised Options: $31,326,362

Current Obligation: $31,180,999

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002417D2321

IDV Type: IDC

Timeline