DoD's $802M CVN 78 Contract with Huntington Ingalls Faces Limited Competition Concerns
Contract Overview
Contract Amount: $80,229,483 ($80.2M)
Contractor: Huntington Ingalls Inc
Awarding Agency: Department of Defense
Start Date: 2021-08-01
End Date: 2022-03-01
Contract Duration: 212 days
Daily Burn Rate: $378.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CVN 78 FY18-23 PIA/CIA EXECUTION.
Place of Performance
Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $80.2 million to HUNTINGTON INGALLS INC for work described as: CVN 78 FY18-23 PIA/CIA EXECUTION. Key points: 1. Significant contract value of $802 million for CVN 78 execution. 2. Sole-source award to Huntington Ingalls Inc. raises competition questions. 3. Potential risks associated with limited competition and cost-plus fixed fee structure. 4. Spending falls within the Ship Building and Repairing sector.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, combined with limited competition, suggests potential for cost overruns. Benchmarking is difficult without comparable contracts, but the CPFF structure often leads to higher final costs than fixed-price agreements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited-source award. This lack of competitive bidding can lead to higher prices and reduced incentive for cost efficiency.
Taxpayer Impact: Taxpayer funds are potentially being spent at a premium due to the absence of competitive pricing mechanisms.
Public Impact
Major defense spending on aircraft carrier construction. Impacts shipbuilding industry and associated supply chains. Potential for cost overruns affects overall defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Cost Plus Fixed Fee contract type
- Lack of clear pricing benchmarks
Positive Signals
- Essential national defense asset (CVN 78)
- Experienced contractor (Huntington Ingalls Inc.)
Sector Analysis
This contract falls under the Ship Building and Repairing sector, a critical but often high-cost area for the Department of Defense. Benchmarks for aircraft carrier construction are complex due to unique specifications and long lead times.
Small Business Impact
No information is provided regarding small business participation in this contract. Large defense contracts often involve complex subcontracting, but the primary awardee's small business engagement is not detailed here.
Oversight & Accountability
The contract's limited competition and CPFF structure warrant close oversight to ensure cost control and prevent potential waste. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Lack of competitive bidding may lead to inflated prices.
- Limited transparency on cost drivers and efficiency.
- Risk of contractor not achieving optimal cost performance.
Tags
ship-building-and-repairing, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $80.2 million to HUNTINGTON INGALLS INC. CVN 78 FY18-23 PIA/CIA EXECUTION.
Who is the contractor on this award?
The obligated recipient is HUNTINGTON INGALLS 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 $80.2 million.
What is the period of performance?
Start: 2021-08-01. End: 2022-03-01.
What specific justifications were provided for awarding this contract on a limited or sole-source basis, and were alternatives explored?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION.' This implies a justification was likely made, possibly citing unique capabilities or urgent needs. However, without further documentation, it's unclear if alternative procurement strategies were thoroughly explored or if the justification was robust enough to satisfy competitive principles.
How does the cost performance of this CPFF contract compare to historical data for similar naval shipbuilding projects, particularly those with limited competition?
Benchmarking this specific Cost Plus Fixed Fee (CPFF) contract against historical data is challenging without more granular cost breakdowns and comparable projects. CPFF contracts inherently carry higher risk of cost escalation than fixed-price contracts. A detailed analysis would require comparing actual costs against initial estimates and the fixed fee earned, relative to similar complex, limited-competition naval builds.
What measures are in place to ensure effective cost control and prevent scope creep given the CPFF structure and limited competition?
Effective cost control for a CPFF contract with limited competition relies heavily on stringent oversight, detailed performance metrics, and robust change management processes. The Department of the Navy must implement rigorous monitoring of expenditures, regular audits, and clear criteria for approving any changes to the contract's scope or cost baseline to mitigate risks.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002417R4320
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Huntington Ingalls Industries, Inc
Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $109,735,749
Exercised Options: $109,735,749
Current Obligation: $80,229,483
Actual Outlays: $71,527,420
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0002419D4306
IDV Type: IDC
Timeline
Start Date: 2021-08-01
Current End Date: 2022-03-01
Potential End Date: 2022-03-01 00:00:00
Last Modified: 2023-09-12
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