Navy awards $38.8M engineering services contract to Electric Boat Corp. for submarine support

Contract Overview

Contract Amount: $38,851,639 ($38.9M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2005-05-26

End Date: 2014-12-04

Contract Duration: 3,479 days

Daily Burn Rate: $11.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 31

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $38.9 million to ELECTRIC BOAT CORPORATION for work described as: Key points: 1. Contract awarded via full and open competition after exclusion of sources, indicating a specific justification for limited bidding. 2. The contract duration of 3,479 days suggests a long-term commitment to engineering services. 3. Awarded by the Department of the Navy, this contract falls under the defense sector's significant spending. 4. The 'Engineering Services' category (NAICS 541330) points to specialized technical expertise required for complex projects. 5. The contract type 'COST PLUS FIXED FEE' can lead to cost overruns if not carefully managed. 6. The absence of small business set-aside indicates a focus on large prime contractors for this requirement.

Value Assessment

Rating: fair

Benchmarking the value of this $38.8 million contract is challenging without specific deliverables or performance metrics. The cost-plus-fixed-fee structure introduces inherent risk for cost control. Comparing it to similar long-term engineering support contracts for naval assets would be necessary to assess if the pricing is competitive. The duration suggests a significant scope, but the value-for-money proposition depends heavily on the successful execution and the criticality of the engineering services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This designation implies that while the competition was intended to be open, specific circumstances led to the exclusion of certain potential bidders. The number of bidders is not explicitly stated, but the 'exclusion of sources' suggests a potentially narrowed field compared to a truly open competition. This could impact price discovery and potentially lead to higher costs if the excluded sources represented significant competition.

Taxpayer Impact: Taxpayers may face higher costs due to a potentially reduced competitive landscape. The justification for excluding sources needs to be transparent to ensure fair pricing.

Public Impact

The primary beneficiaries are the Department of the Navy and its submarine fleet, receiving essential engineering support. Services delivered include specialized engineering expertise crucial for the maintenance, modernization, or development of naval assets. The geographic impact is likely concentrated around naval bases and shipyards where Electric Boat Corporation operates, primarily in Connecticut. Workforce implications include the employment of highly skilled engineers and technical personnel within Electric Boat Corporation and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize cost overruns if not rigorously monitored.
The 'exclusion of sources' in the competition raises questions about the breadth of market engagement and potential price impacts.
Long contract duration (3,479 days) increases the risk of scope creep and potential for outdated technology if not managed proactively.

Positive Signals

Awarded to a known entity, Electric Boat Corporation, which has a long history with naval shipbuilding and support.
The contract falls under the Department of Defense, indicating a critical national security requirement.
The engineering services provided are vital for maintaining and enhancing complex naval systems.

Sector Analysis

This contract operates within the defense industrial base, specifically focusing on engineering services for naval platforms. The market for specialized naval engineering is dominated by a few large, experienced contractors like Electric Boat Corporation. Spending in this sector is substantial, driven by the need for advanced technology and long-term support for complex military assets. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Navy or other defense agencies for similar platforms.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SB is false). This suggests that the requirement was deemed to be beyond the scope or capability of small business contractors, or that the prime contractor was selected through a process that did not prioritize small business participation. There is no explicit information on subcontracting plans, but large prime contractors are often required to have small business subcontracting goals. The impact on the small business ecosystem would depend on whether Electric Boat Corporation actively seeks out and utilizes small business subcontractors for specialized services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract award databases, but detailed performance data and cost breakdowns may be limited due to security or proprietary concerns. The Inspector General for the Department of Defense would have jurisdiction to investigate potential fraud, waste, or abuse.

Related Government Programs

Naval Ship Systems Engineering
Submarine Maintenance and Modernization
Defense Engineering Services
Department of the Navy Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited competition due to 'exclusion of sources' may impact price.
Long contract duration increases risk of technological obsolescence and management complexity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.9 million to ELECTRIC BOAT CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ELECTRIC BOAT CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $38.9 million.

What is the period of performance?

Start: 2005-05-26. End: 2014-12-04.

What is the historical spending pattern for engineering services with Electric Boat Corporation by the Department of the Navy?

Analyzing historical spending requires access to comprehensive contract databases beyond the provided data. However, Electric Boat Corporation is a primary contractor for U.S. Navy submarines, including the construction and maintenance of ballistic missile and attack submarines. Their contracts typically involve substantial engineering, design, and lifecycle support services. Historical data would likely show consistent, large-value awards for these complex platforms, reflecting the long-term nature of submarine programs. A detailed analysis would involve aggregating all awarded contracts to Electric Boat Corporation by the Navy over several fiscal years, categorizing them by service type (e.g., R&D, engineering, maintenance), and examining trends in award values and contract types to understand the evolution of their support relationship with the Navy.

How does the 'COST PLUS FIXED FEE' contract type typically perform in terms of cost control compared to other contract types for similar engineering services?

Cost-Plus-Fixed-Fee (CPFF) contracts are used when the extent or duration of the work cannot be determined in advance, making them suitable for research and development or complex engineering projects. In CPFF, the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost can vary. This structure incentivizes the contractor to control costs to maximize their profit margin (as the fee is a fixed percentage of the estimated cost). However, it also places a significant burden on the government to monitor costs closely to prevent overruns. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty for the government. Compared to Cost-Plus-Incentive-Fee (CPIF), CPFF lacks the explicit incentive mechanisms tied to cost targets, potentially making it less effective at driving cost savings unless robust government oversight is in place.

What are the specific engineering services covered under this contract, and what is their criticality to submarine operations?

The provided data only specifies 'Engineering Services' under NAICS code 541330. Without the full contract details or statement of work, the specific services are unknown. However, given the contractor (Electric Boat Corporation) and the client (Department of the Navy), these services are likely related to the design, development, integration, testing, maintenance, modernization, or lifecycle support of submarines. Criticality could range from ensuring the structural integrity of the hull, maintaining the functionality of complex weapon systems, supporting propulsion systems, or integrating new technologies. These services are paramount to the operational readiness, safety, and effectiveness of the submarine fleet, which forms a crucial part of national defense.

What are the potential risks associated with the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation?

This designation suggests that while the initial intent was full and open competition, certain sources were excluded. The risks include a potentially narrowed competitive field, which could lead to higher prices than if all capable sources had participated. It raises questions about the justification for exclusion – was it based on technical qualifications, security concerns, or other factors? If the exclusion was not well-justified or transparent, it could lead to perceptions of unfairness or favoritism. Furthermore, it might limit the government's ability to leverage the full spectrum of innovation and cost-saving solutions available in the market. Thorough documentation and justification for the exclusion are critical to mitigate these risks and ensure the government is obtaining the best value.

How does the long contract duration (3,479 days) impact the management and potential obsolescence of technology?

A contract duration of 3,479 days (approximately 9.5 years) presents significant management challenges. It requires robust contract administration to track performance, manage changes, and ensure compliance over an extended period. From a technological standpoint, such a long duration increases the risk of obsolescence. The technologies and engineering approaches used at the start of the contract may be outdated by its end. To mitigate this, contracts of this length often include provisions for technology refresh, phased upgrades, or periodic reviews to incorporate advancements. Effective management requires proactive planning to anticipate technological shifts and ensure the delivered services remain relevant and effective throughout the contract's life.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 31

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 75 EASTERN POINT RD, GROTON, CT, 02

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline