Navy Awards $29.7M BOA for LCS 18 PSA to Austal USA, LLC
Contract Overview
Contract Amount: $29,741,852 ($29.7M)
Contractor: Austal USA, LLC
Awarding Agency: Department of Defense
Start Date: 2019-10-30
End Date: 2020-09-30
Contract Duration: 336 days
Daily Burn Rate: $88.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: POST DELIVERY - BASIC ORDERING AGREEMENT (BOA) ITEM 0001 LCS 18 PSA EXECUTION
Place of Performance
Location: MOBILE, MOBILE County, ALABAMA, 36610
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $29.7 million to AUSTAL USA, LLC for work described as: POST DELIVERY - BASIC ORDERING AGREEMENT (BOA) ITEM 0001 LCS 18 PSA EXECUTION Key points: 1. The award represents a significant investment in shipbuilding and repair capabilities. 2. Competition was not utilized for this specific task order. 3. Potential risks include the lack of competitive pricing and limited oversight on this sole-source award. 4. The sector is dominated by large shipbuilding and repair firms.
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This award was not competed, indicating a sole-source justification. The lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition may result in a higher cost to taxpayers than if the work had been competitively bid.
Public Impact
Impacts the shipbuilding and repair sector, potentially affecting other companies vying for similar work. Ensures continued support for the Littoral Combat Ship (LCS) program. Raises questions about the justification for a sole-source award in a sector with multiple potential providers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Limited transparency on pricing justification
Positive Signals
- Supports critical naval shipbuilding and repair
- Awarded to a known entity with existing capabilities
Sector Analysis
The shipbuilding and repair sector is capital-intensive and highly specialized. Spending benchmarks vary widely based on the complexity and scale of the vessel or repair work.
Small Business Impact
This award was made to Austal USA, LLC, a large business. There is no indication of small business participation in this specific task order.
Oversight & Accountability
The use of a Basic Ordering Agreement (BOA) with subsequent task orders requires careful oversight to ensure fair pricing and adherence to contract terms, especially in sole-source situations.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Cost-plus contract type introduces cost overrun risk
- Potential for reduced price discovery
- Limited transparency on justification for sole-source award
Tags
ship-building-and-repairing, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.7 million to AUSTAL USA, LLC. POST DELIVERY - BASIC ORDERING AGREEMENT (BOA) ITEM 0001 LCS 18 PSA EXECUTION
Who is the contractor on this award?
The obligated recipient is AUSTAL USA, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $29.7 million.
What is the period of performance?
Start: 2019-10-30. End: 2020-09-30.
What was the specific justification for awarding this task order on a sole-source basis under the BOA, given the potential for competition in the shipbuilding and repair sector?
The justification for a sole-source award typically stems from unique capabilities, urgent needs, or specific circumstances where only one contractor can fulfill the requirement. Without access to the full contract documentation and justification, it's difficult to ascertain the precise reasons. However, for a BOA, task orders can sometimes be sole-sourced if they fall within pre-negotiated terms or if specific conditions are met, such as follow-on work to a previously competed prime contract.
How does the Cost Plus Fixed Fee (CPFF) structure for this $29.7 million award mitigate risks associated with potential cost overruns and ensure value for taxpayer money?
The CPFF structure aims to provide a fixed profit margin for the contractor while allowing for the recovery of actual costs. However, it places the risk of cost overruns primarily on the government. Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are crucial to ensure value. Without transparency into the fee negotiation and ongoing cost monitoring, it's challenging to assess the risk mitigation effectiveness.
What is the long-term strategic impact of awarding significant portions of LCS support through sole-source BOAs on the overall competitiveness and innovation within the naval shipbuilding industry?
Sole-source awards, particularly through BOAs, can reduce competitive pressure, potentially stifling innovation and leading to less efficient cost structures over time. While they can ensure continuity of support, a consistent reliance on them may disincentivize new entrants and limit the government's ability to leverage market dynamics for better pricing and technological advancements in the long run.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002419R2318
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Austal Limited
Address: 100 ADDSCO RD, MOBILE, AL, 36602
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $32,372,575
Exercised Options: $32,372,575
Current Obligation: $29,741,852
Actual Outlays: $6,830,915
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0002419G2318
IDV Type: BOA
Timeline
Start Date: 2019-10-30
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2025-07-29
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