DoD Awards $112M for Non-Nuclear Ship Repair, VSE Corp. Secures Contract

Contract Overview

Contract Amount: $112,424,707 ($112.4M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2004-01-30

End Date: 2010-02-02

Contract Duration: 2,195 days

Daily Burn Rate: $51.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200406!041349!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0014095DF021 !A!N! !N!0536 ! !20040130!20040227!049997380!049997380!049997380!N!VSE CORPORATION !2550 HUNTINGTON AVE !ALEXANDRIA !VA!22303!01000!510!51!ALEXANDRIA !ALEXANDRIA (CITY) !VIRGINIA !+000049289900!Y!N!000000000000!J998!NON-NUCLEAR SHIP REPAIR (EAST) !A3 !SHIPS !000 !* !336612!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!R!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !Z!A!A!A!00 !A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22303

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $112.4 million to VSE CORPORATION for work described as: 200406!041349!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0014095DF021 !A!N! !N!0536 ! !20040130!20040227!049997380!049997380!049997380!N!VSE CORPORATION !2550 HUNTINGTON AVE !ALEXANDRIA !VA!22303!01000!510!51!ALEXANDRIA !ALEX… Key points: 1. Contract awarded to VSE Corporation for non-nuclear ship repair services. 2. Significant value of $112.4 million highlights the ongoing need for naval maintenance. 3. Full and open competition was utilized, suggesting a competitive bidding process. 4. The contract spans over 10 years, indicating a long-term requirement. 5. Sector is Defense, specifically naval ship maintenance.

Value Assessment

Rating: fair

The contract type is Cost Plus Award Fee (CPAF), which can lead to higher costs if performance incentives are aggressively met. Benchmarking against similar ship repair contracts is difficult without detailed scope of work and performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: The competitive nature of the award suggests that taxpayers are likely receiving a reasonable price for the services rendered, though the CPAF structure warrants monitoring.

Public Impact

Ensures continued operational readiness of naval vessels. Supports critical infrastructure maintenance within the Department of Defense. Provides employment opportunities within the shipbuilding and repair industry. Contributes to the economic activity in Alexandria, Virginia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) may lead to cost overruns if not managed effectively.
CPAF contract type can incentivize higher costs.
Lack of specific performance metrics makes it hard to assess value for money.
Potential for scope creep over the extended period.

Positive Signals

Awarded through full and open competition.
VSE Corporation has a history of providing services to the Navy.
Contract addresses a critical defense need.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on ship maintenance and repair. Spending in this area is crucial for maintaining naval fleet readiness. Benchmarks are difficult to establish without specific service details, but naval repair is a significant and consistent government expenditure.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. The prime contractor, VSE Corporation, is a large business. Further analysis would be needed to determine if small businesses are participating as subcontractors.

Oversight & Accountability

The contract was awarded by the Naval Sea Systems Command, a major component of the Department of the Navy. Oversight would typically involve program managers and contracting officers ensuring performance and adherence to contract terms.

Related Government Programs

Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Long contract duration increases risk of cost overruns.
CPAF structure can lead to higher overall costs.
Lack of detailed performance metrics hinders value assessment.
Potential for scope creep over the extended period.
Limited insight into subcontractor participation, especially small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $112.4 million to VSE CORPORATION. 200406!041349!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0014095DF021 !A!N! !N!0536 ! !20040130!20040227!049997380!049997380!049997380!N!VSE CORPORATION !2550 HUNTINGTON AVE !ALEXANDRIA !VA!22303!01000!510!51!ALEXANDRIA !ALEXANDRIA (CITY) !VIRGINIA !+000049289900!Y!N!000000000000!J998!NON-NUCLEAR SHIP REPAIR (EAST) !A3 !SHIPS !000 !* !336612!E! !5!B!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is VSE 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 $112.4 million.

What is the period of performance?

Start: 2004-01-30. End: 2010-02-02.

What specific performance metrics are tied to the award fee in the CPAF structure, and how do they ensure optimal value for the taxpayer?

The Cost Plus Award Fee (CPAF) structure incentivizes contractors to meet or exceed performance objectives. The award fee is contingent upon achieving specific, pre-defined metrics related to quality, timeliness, and cost control. Without access to these specific metrics, it's challenging to definitively assess if the award fee mechanism is driving optimal value or simply increasing costs. Effective oversight is crucial to ensure the metrics are relevant and fairly applied.

Given the 10-year duration, what mechanisms are in place to mitigate the risk of cost escalation and ensure the contract remains competitive throughout its life?

The long duration of the contract presents a risk of cost escalation due to inflation, changing market conditions, and potential scope creep. Mitigation strategies should include regular price reviews, robust change order management processes, and potentially incorporating economic price adjustment clauses tied to objective indices. While awarded competitively, the government should periodically reassess the market to ensure continued fair pricing.

How does the Naval Sea Systems Command ensure that the 'non-nuclear ship repair' services provided by VSE Corporation meet the evolving technological and operational needs of the fleet?

Ensuring evolving needs are met requires proactive communication and contract management. The Naval Sea Systems Command likely employs technical representatives and contracting officers to monitor performance, conduct regular reviews, and facilitate discussions on emerging requirements. The CPAF structure, if well-designed, can also incentivize VSE Corporation to propose innovative solutions and adapt to new technologies to earn higher award fees.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 6348 WALKER LANE, ALEXANDRIA, VA, 22310

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0014095DF021

IDV Type: IDC

Timeline