Navy awards $30.7M for DDG 1001 shipbuilding and repair, with BAE Systems as prime contractor

Contract Overview

Contract Amount: $30,717,527 ($30.7M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2022-09-19

End Date: 2023-05-29

Contract Duration: 252 days

Daily Burn Rate: $121.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DDG 1001 PSA BASE AWARD

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.7 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: DDG 1001 PSA BASE AWARD Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Fixed-price contract type aims to control costs for the government. 3. The contract duration of 252 days indicates a focused scope of work. 4. Prime contractor BAE Systems has a significant presence in the defense shipbuilding sector. 5. The award is a delivery order, likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The North American Industry Classification System (NAICS) code 336611 points to shipbuilding and repair services.

Value Assessment

Rating: good

The contract value of $30.7 million for a DDG 1001 related task order appears reasonable within the context of large naval shipbuilding programs. Benchmarking against similar delivery orders for complex naval vessels is challenging without more specific task details. However, the firm-fixed-price structure suggests an effort to establish a clear cost ceiling. Further analysis would require comparing the scope of work to historical awards for similar ship classes and repair activities.

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 this method generally fosters a competitive environment, which can lead to better pricing and innovation. The Navy's decision to use full and open competition suggests confidence in the market's ability to provide qualified contractors for this type of work.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the U.S. Navy, receiving critical shipbuilding and repair services for the DDG 1001. Services delivered include shipbuilding and repair activities essential for maintaining naval fleet readiness. The geographic impact is centered around the contractor's location in San Diego, California, and potentially shipyards involved in the DDG 1001 program. Workforce implications include employment opportunities for skilled labor in shipbuilding and repair trades within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the scope of work for this delivery order makes it difficult to fully assess value for money.
Potential for cost overruns if unforeseen issues arise during the shipbuilding or repair process, despite the fixed-price nature.
Dependence on a single prime contractor for critical naval shipbuilding components could pose supply chain risks.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Prime contractor BAE Systems has extensive experience in naval shipbuilding, suggesting technical capability.
The contract supports the modernization and readiness of the U.S. Navy's fleet.

Sector Analysis

The defense shipbuilding and repair sector is a highly specialized and capital-intensive industry. Contracts like this are crucial for maintaining the U.S. Navy's technological advantage and operational readiness. The market is dominated by a few large prime contractors, including BAE Systems, which possess the necessary infrastructure, expertise, and security clearances. Spending in this sector is driven by defense budgets, geopolitical factors, and the need for fleet modernization and sustainment. Comparable spending benchmarks would typically involve other DDG-class ship construction or major repair contracts.

Small Business Impact

The data indicates that this contract was not 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 would depend on the specific requirements of the delivery order and the prime contractor's subcontracting plan. Analysis of subcontracting data would be necessary to determine the actual 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. As a delivery order under a larger contract, it likely adheres to established oversight mechanisms for shipbuilding and repair. Transparency is generally maintained through contract award announcements and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DDG 51 Class Destroyer Program
Naval Shipbuilding and Repair Contracts
Department of Defense Shipbuilding and Repair Spending
BAE Systems Defense Contracts

Risk Flags

Potential for cost growth despite fixed-price contract
Limited transparency on specific scope of work
Dependence on prime contractor capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.7 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. DDG 1001 PSA BASE 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 $30.7 million.

What is the period of performance?

Start: 2022-09-19. End: 2023-05-29.

What is the specific scope of work for this DDG 1001 delivery order?

The provided data identifies this as a 'DDG 1001 PSA BASE AWARD' with a firm-fixed-price contract type and a duration of 252 days. 'PSA' could potentially stand for 'Program Support Activity' or a similar designation related to the ship's construction, outfitting, or post-delivery support. Without further details on the specific task order, it's difficult to ascertain the exact nature of the work, such as whether it pertains to new construction, modernization, repair, or specific system integration for the DDG 1001 guided-missile destroyer. This lack of specificity limits a granular assessment of value and performance.

How does the $30.7 million award compare to other DDG 1001 related contracts?

Comparing this $30.7 million award requires context regarding the specific phase of the DDG 1001 program. The DDG 1001 is part of the Zumwalt-class of destroyers, which have historically faced cost challenges and program adjustments. This award is likely a delivery order under a broader contract vehicle, possibly for specific outfitting, testing, or post-delivery support. To benchmark effectively, one would need to examine other delivery orders or contract modifications for the DDG 1001 or similar vessels, looking at the scope of work, duration, and total cost. Without access to the specific task order details or a database of comparable awards for this particular ship class, a precise comparison is difficult.

What are the key risks associated with this contract for BAE Systems and the Navy?

For BAE Systems, key risks include potential cost overruns if the fixed-price contract doesn't adequately account for unforeseen technical challenges or material cost increases during the 252-day performance period. Schedule delays could also impact profitability. For the Navy, risks involve ensuring the quality of work meets stringent naval standards, potential schedule slippage affecting fleet readiness, and the possibility that the awarded price might not represent the absolute lowest achievable had competition been more intense or the scope better defined. Dependence on a single contractor for critical tasks also presents a risk.

What is BAE Systems' track record in shipbuilding and repair, particularly for naval vessels?

BAE Systems is a major global defense contractor with a significant footprint in naval shipbuilding and repair. They have a long history of constructing and maintaining various classes of naval vessels for the U.S. Navy and other allied navies. This includes work on destroyers, aircraft carriers, amphibious assault ships, and submarines. Their experience encompasses complex systems integration, hull construction, and advanced technologies. Given their established role and extensive portfolio in this sector, BAE Systems generally possesses a strong track record for delivering on large-scale naval projects, although specific performance can vary by contract.

How has federal spending on shipbuilding and repair evolved over the past five years?

Federal spending on shipbuilding and repair has generally remained substantial, driven by the U.S. Navy's need to maintain and modernize its fleet. While specific figures fluctuate annually based on budget allocations and strategic priorities, there has been a consistent demand for new vessel construction, conversions, and extensive maintenance. Factors influencing spending include geopolitical tensions, the retirement of older vessels, and the introduction of new ship classes incorporating advanced technologies. The Zumwalt-class program, to which the DDG 1001 belongs, has seen significant investment but also faced scrutiny over costs and production rates. Overall, the sector represents a multi-billion dollar annual commitment from the federal government.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

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: $30,717,527

Exercised Options: $30,717,527

Current Obligation: $30,717,527

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