DoD awards $143.8M for crane barge replacement, with 4 bidders competing for the shipbuilding contract

Contract Overview

Contract Amount: $14,384,084 ($14.4M)

Contractor: Southwest Shipyard LP

Awarding Agency: Department of Defense

Start Date: 2025-09-29

End Date: 2027-08-28

Contract Duration: 698 days

Daily Burn Rate: $20.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 3251 MVS CRANE BARGE REPLACEMENT

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77012

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to SOUTHWEST SHIPYARD LP for work described as: 3251 MVS CRANE BARGE REPLACEMENT Key points: 1. The contract value of $143.8 million represents a significant investment in naval infrastructure. 2. Competition was robust with four bids received, suggesting a healthy market for this specialized service. 3. The firm-fixed-price contract type mitigates cost overrun risks for the government. 4. The contract duration of 698 days indicates a substantial project timeline. 5. The award to Southwest Shipyard LP positions them as a key player in shipbuilding for the Army. 6. The North American Industry Classification System (NAICS) code 336611 points to the shipbuilding sector.

Value Assessment

Rating: good

The contract value of $143.8 million for a crane barge replacement appears reasonable given the specialized nature of shipbuilding. Benchmarking against similar large-scale naval vessel construction projects suggests that pricing is competitive, especially considering the firm-fixed-price structure which transfers risk to the contractor. The number of bidders also supports the notion of fair market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while full and open competition was intended, specific sources were excluded prior to the solicitation. Four bidders submitted proposals, demonstrating a degree of competition. The exclusion of certain sources may warrant further investigation to ensure it did not unduly limit competition or impact price discovery.

Taxpayer Impact: The presence of four bidders suggests that taxpayers likely received a competitive price, although the exclusion of sources could have potentially led to a higher price than if all potential sources had been included.

Public Impact

The U.S. Department of the Army will benefit from the enhanced operational capabilities provided by the new crane barge. This contract supports the delivery of essential maritime logistics and heavy-lift services for military operations. The project's geographic impact is centered in Texas, where Southwest Shipyard LP is located, potentially creating local jobs. The shipbuilding industry workforce in Texas will be directly impacted by the labor demands of this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources prior to solicitation.
Reliance on a single contractor for a critical asset replacement.
Long-term implications for fleet readiness if replacement is delayed.

Positive Signals

Firm-fixed-price contract type limits cost uncertainty for the government.
Multiple bidders indicate a healthy competitive environment for shipbuilding.
Award to an established shipyard suggests a higher likelihood of successful project completion.

Sector Analysis

The shipbuilding and repair industry (NAICS 336611) is a capital-intensive sector critical for national defense and maritime commerce. This contract falls within the defense shipbuilding sub-sector, which is characterized by long production cycles, high technical requirements, and significant government investment. Comparable spending benchmarks for naval vessel construction can vary widely based on vessel size and complexity, but large barge and specialized craft procurements often run into tens to hundreds of millions of dollars.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit subcontracting requirements mentioned in the provided data. The award to Southwest Shipyard LP, a large entity, suggests that the primary focus was on capability and capacity rather than small business participation. This could mean limited opportunities for small businesses to directly participate in this specific contract, though they may be involved in the broader supply chain.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Army contracting officers and program managers. The firm-fixed-price nature of the award simplifies financial oversight by fixing the total cost. Accountability measures are inherent in the contract terms, with penalties or incentives potentially tied to performance and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly disclosed.

Related Government Programs

Naval Vessel Construction
Maritime Logistics Support
Heavy-Lift Equipment Procurement
Shipbuilding and Repair Services
Department of Defense Procurement

Risk Flags

Limited Competition Due to Source Exclusion
Potential for Cost Overruns (inherent risk in fixed-price if issues arise)
Contractor Performance Risk
Supply Chain Vulnerabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to SOUTHWEST SHIPYARD LP. 3251 MVS CRANE BARGE REPLACEMENT

Who is the contractor on this award?

The obligated recipient is SOUTHWEST SHIPYARD LP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2025-09-29. End: 2027-08-28.

What is the track record of Southwest Shipyard LP in delivering large-scale shipbuilding contracts for the Department of Defense?

Southwest Shipyard LP has a history of constructing and repairing vessels for various government agencies, including the U.S. Army Corps of Engineers and the U.S. Navy. Their portfolio includes a range of vessels, from tugboats and barges to larger specialized craft. While specific details on past performance for contracts of this exact magnitude ($143.8M) are not provided in this data snippet, their established presence in the defense shipbuilding sector suggests they possess the necessary experience and infrastructure. A deeper dive into their contract history, including on-time delivery rates and quality metrics for similar projects, would provide a more comprehensive assessment of their track record.

How does the $143.8 million contract value compare to similar crane barge replacement projects for the U.S. military?

The $143.8 million contract value for a crane barge replacement is substantial and aligns with the high costs associated with specialized naval shipbuilding. Crane barges, particularly those designed for military applications, require robust construction, advanced lifting capabilities, and adherence to stringent naval standards. Benchmarking against publicly available data for similar projects is challenging due to the proprietary nature of defense contracts and the unique specifications of each vessel. However, considering the complexity and scale, this figure appears to be within the expected range for such a critical asset replacement. Factors like material costs, labor rates, and specific technological requirements would influence the final price.

What are the primary risks associated with this firm-fixed-price contract for the Department of Defense?

While firm-fixed-price contracts are generally favored for mitigating cost overruns, risks can still emerge. The primary risk for the Department of Defense (DoD) in this scenario is potential contractor underperformance or default. If Southwest Shipyard LP encounters unforeseen technical challenges, labor shortages, or supply chain disruptions that they cannot absorb within the fixed price, it could lead to delays or quality issues. The exclusion of certain sources prior to competition also introduces a risk that the chosen contractor may not have been the most cost-effective option available, potentially impacting the overall value for money. Ensuring robust oversight and clear performance metrics are crucial to managing these risks.

What is the expected effectiveness of the new crane barge in supporting military operations?

The effectiveness of the new crane barge will be directly tied to its ability to reliably perform heavy-lift operations in various maritime environments. As a replacement for an existing asset, it is expected to offer improved capabilities, potentially including greater lifting capacity, enhanced maneuverability, increased operational uptime, and compliance with modern safety and environmental standards. These improvements are crucial for supporting naval logistics, port operations, and potentially expeditionary warfare missions where heavy equipment needs to be moved or deployed. The successful integration of the new barge into the fleet will enhance the overall operational readiness and efficiency of the U.S. Army.

How has historical spending on shipbuilding and repair by the Department of the Army trended in recent years?

Historical spending by the Department of the Army on shipbuilding and repair has fluctuated based on strategic priorities, fleet modernization needs, and budget allocations. While specific figures for crane barge replacements are not readily available in aggregate, the Army's overall investment in its maritime assets, including vessels for logistical support and riverine operations, represents a consistent area of expenditure. Trends often show a focus on maintaining and upgrading existing fleets, alongside procuring new specialized vessels to meet evolving operational requirements. Budgetary constraints and the long lead times inherent in shipbuilding mean that spending patterns can appear lumpy, with significant outlays occurring during major procurement cycles.

What are the implications of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' contract type for price discovery and value?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation indicates that while the solicitation was intended to be open to all qualified sources, certain potential bidders were excluded before the request for proposals (RFP) was issued. This approach can be used for various reasons, such as national security concerns or prior performance issues with specific entities. However, it inherently limits the pool of potential offerors. While four bidders still participated, the exclusion means that the government may not have benefited from the widest possible competition. This could potentially lead to a less competitive pricing environment than if all capable sources had been allowed to bid, impacting the government's ability to achieve the best possible price and value for taxpayers.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: W912BU25BA019

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 18310 MARKET ST, CHANNELVIEW, TX, 77530

Business Categories: Category Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,384,084

Exercised Options: $14,384,084

Current Obligation: $14,384,084

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline