Navy Awards $187.6M Contract for Destroyer Ship Building and Repair to Todd Pacific Shipyards

Contract Overview

Contract Amount: $187,576,073 ($187.6M)

Contractor: Vigor Shipyards, LLC

Awarding Agency: Department of Defense

Start Date: 2000-06-08

End Date: 2010-06-23

Contract Duration: 3,667 days

Daily Burn Rate: $51.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 200012!1700!002881!BZ008 !NAVAL SEA SYSTEMS COMMAND !N0002400C8514 !A!*!* !20000608!20000830!086417136!001288828!001288828!N!4P759!TODD PACIFIC SHIPYARDS CORP !1801 16TH AVE SW !SEATTLE !WA!98134!63000!033!53!SEATTLE !KING !WASHINGTON!0001!+000002343413!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !2SCB!DESTROYER DD-963 CLASS !3731!1!*!*!*!B!A!*!D !N!V!1!001!N!7A!A!N!Z!* !* !N!B!N!B!*!A!A!A!A!* !*!N!A!B!N!*!*!*!Y!*!

Place of Performance

Location: EVERETT, SNOHOMISH County, WASHINGTON, 98207

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $187.6 million to VIGOR SHIPYARDS, LLC for work described as: 200012!1700!002881!BZ008 !NAVAL SEA SYSTEMS COMMAND !N0002400C8514 !A!*!* !20000608!20000830!086417136!001288828!001288828!N!4P759!TODD PACIFIC SHIPYARDS CORP !1801 16TH AVE SW !SEATTLE !WA!98134!63000!033!53!SEATTLE !KIN… Key points: 1. The contract value is substantial at $187.6 million, indicating a significant investment in naval capabilities. 2. Competition was limited, with Vigor Shipyards, LLC identified as a potential competitor, raising questions about price discovery. 3. The risk associated with this contract is moderate, given the 'NOT COMPETED' status and 'COST PLUS INCENTIVE FEE' pricing structure. 4. The sector is Ship Building and Repair, a critical component of national defense infrastructure.

Value Assessment

Rating: fair

The contract value of $187.6 million for destroyer ship building and repair appears high, especially given the 'NOT COMPETED' status. Benchmarking against similar contracts for destroyer classes would be necessary to assess true value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, limiting the opportunity for competitive bidding and potentially impacting price discovery. The presence of a known competitor, Vigor Shipyards, LLC, suggests that competition was possible but not pursued.

Taxpayer Impact: The lack of competition may lead to higher costs for taxpayers compared to a fully competed contract.

Public Impact

This contract directly impacts national defense by ensuring the readiness and maintenance of critical naval assets. The award to Todd Pacific Shipyards supports jobs and economic activity in the shipbuilding sector, particularly in Washington state. Transparency in the procurement process is crucial given the significant taxpayer funds involved and the limited competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Cost-plus contract type
Lack of clear justification for sole-source award

Positive Signals

Supports critical defense infrastructure
Potential for job creation in shipbuilding sector

Sector Analysis

The Ship Building and Repair sector is vital for national security, involving complex and high-value contracts. Spending in this sector is often driven by defense needs and technological advancements, with significant government oversight required.

Small Business Impact

There is no indication in the provided data whether small businesses were involved as subcontractors or partners in this contract. Further investigation would be needed to determine their participation and the impact on small business utilization.

Oversight & Accountability

The 'NOT COMPETED' status warrants close oversight to ensure the justification for limited competition is sound and that the pricing is fair and reasonable. The Department of the Navy should provide clear documentation supporting this procurement approach.

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
Potential for cost overruns
Limited transparency in award justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $187.6 million to VIGOR SHIPYARDS, LLC. 200012!1700!002881!BZ008 !NAVAL SEA SYSTEMS COMMAND !N0002400C8514 !A!*!* !20000608!20000830!086417136!001288828!001288828!N!4P759!TODD PACIFIC SHIPYARDS CORP !1801 16TH AVE SW !SEATTLE !WA!98134!63000!033!53!SEATTLE !KING !WASHINGTON!0001!+000002343413!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !2SCB!DESTROYER DD-963 CLASS !3731!1!*!*!*!B!A!*!D !N!V!

Who is the contractor on this award?

The obligated recipient is VIGOR SHIPYARDS, 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 $187.6 million.

What is the period of performance?

Start: 2000-06-08. End: 2010-06-23.

What was the specific justification for not competing this significant contract, and were alternative sources considered?

The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require access to the contract file to understand the specific justification, such as urgent and compelling needs, or if only one source was capable of meeting the requirement. Without this information, it's difficult to assess the validity of the sole-source award and its potential impact on value for money.

How does the 'COST PLUS INCENTIVE FEE' structure ensure cost control and performance for this destroyer class maintenance contract?

A Cost Plus Incentive Fee (CPIF) contract aims to incentivize the contractor to control costs and meet performance targets. The final profit is adjusted based on whether the final costs are below or above a target cost, and performance outcomes. For this contract, the effectiveness of the CPIF structure depends on clearly defined performance metrics and a well-established target cost that genuinely encourages efficiency.

What is the long-term strategic value of awarding this contract to Todd Pacific Shipyards, considering potential future shipbuilding needs?

The long-term strategic value hinges on Todd Pacific Shipyards' demonstrated capability, capacity, and commitment to quality in maintaining the destroyer fleet. If they prove to be a reliable and cost-effective partner, it could foster a stable relationship for future maintenance and potentially new construction. However, the lack of competition raises concerns about whether this award truly represents the best long-term strategic option available to the Navy.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Carlyle Group Management L.L.C.

Address: 1801 16TH AVE SW, SEATTLE, WA, 98134

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $1,391,967

Exercised Options: $1,391,967

Current Obligation: $187,576,073

Actual Outlays: $1,391,967

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline