Navy awards $102M for non-nuclear ship repair, highlighting long-term contract and firm fixed-price structure

Contract Overview

Contract Amount: $101,975,463 ($102.0M)

Contractor: Puget Sound Commerce Center, Inc.

Awarding Agency: Department of Defense

Start Date: 2001-07-09

End Date: 2016-09-23

Contract Duration: 5,555 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200112!000392!1700!BS799 !SUPERVISOR SHIPBUILDING CONVERSI!N0002401C4115 !A!N!*!N!A00001 !20010709!20011105!001288828!001288828!001288828!N!TODD PACIFIC SHIPYARDS CORPORA!1801 16TH AVE SW !SEATTLE !WA!98134!07695!035!53!BREMERTON !KITSAP !WASHINGTON!+000000070000!N!N!000000000000!J999!NON-NUCLEAR SHIP REPAIR (WEST) !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !336611!*!*!3! ! !B!*!*!*!B!*!*!N!A!A !N!J!2!002!N!2A!A!N!C! ! !N!B!N!N! ! !A! !A!A!000!A!B!Y!F!Y! ! ! ! !0001!

Place of Performance

Location: BREMERTON, KITSAP County, WASHINGTON, 98314

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $102.0 million to PUGET SOUND COMMERCE CENTER, INC. for work described as: 200112!000392!1700!BS799 !SUPERVISOR SHIPBUILDING CONVERSI!N0002401C4115 !A!N!*!N!A00001 !20010709!20011105!001288828!001288828!001288828!N!TODD PACIFIC SHIPYARDS CORPORA!1801 16TH AVE SW !SEATTLE !WA!98134!07695!035!53!BREMERTON !KITSA… Key points: 1. Contract awarded for non-nuclear ship repair services, indicating a need for ongoing maintenance and modernization of naval vessels. 2. The firm fixed-price contract structure suggests a clear scope of work and predictable costs for the Navy. 3. A long contract duration of over 5,000 days points to a significant, multi-year commitment to ship maintenance. 4. The contract was awarded under full and open competition, suggesting a competitive bidding process. 5. The primary contractor, PUGET SOUND COMMERCE CENTER, INC., will be responsible for delivering these critical repair services. 6. The North American Industry Classification System (NAICS) code 336611 points to the shipbuilding and repair industry.

Value Assessment

Rating: good

The contract value of $101,975,463.27 for ship repair over a period of approximately 15 years represents a substantial investment. Benchmarking this against similar long-term, large-scale naval repair contracts is challenging without more specific details on the scope of work. However, the firm fixed-price nature suggests that the Navy has a defined budget and expects cost certainty. The duration implies a significant need for these services, and the competitive award process should have driven a reasonable price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which implies that while the competition was broad, certain sources may have been excluded based on specific criteria. The number of bidders is not explicitly stated, but the 'full and open' designation suggests multiple entities had the opportunity to bid. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: A competitive bidding process for this large contract helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Naval forces operating on the West Coast will benefit from well-maintained vessels, ensuring operational readiness. Services delivered include essential repairs and maintenance for non-nuclear naval ships. The contract has a geographic impact primarily focused on the West Coast, likely supporting naval bases in Washington state. The contract supports jobs within the shipbuilding and repair industry, contributing to the maritime workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long duration of the contract (over 15 years) could lead to potential cost overruns if market conditions or repair needs change significantly over time.
The 'exclusion of sources' clause in the competition type warrants further investigation to understand the rationale and potential impact on competition.
Reliance on a single primary contractor for such a long period may reduce flexibility in adapting to new technologies or repair methodologies.

Positive Signals

The firm fixed-price contract provides cost certainty for the Department of the Navy.
Awarding under full and open competition suggests a robust process aimed at achieving value for money.
The contract addresses a critical need for maintaining naval vessel readiness.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval operations and national security. This contract falls under the broader industrial machinery and equipment manufacturing sector, specifically focused on ship maintenance and repair. The NAICS code 336611 covers establishments primarily engaged in building and repairing ships and boats. Spending in this sector is often characterized by large, long-term contracts due to the complexity and cost of naval vessels.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the substantial value and specialized nature of naval ship repair, it is unlikely that small businesses would be the primary awardees unless through subcontracting. Further analysis would be needed to determine if small business subcontracting plans were a requirement and how effectively they were implemented.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The contract's long duration suggests regular performance reviews and milestone tracking would be in place. Transparency is generally maintained through contract awards databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Defense Shipbuilding and Repair
Fleet Readiness Programs
Department of Defense Ship Repair Services

Risk Flags

Long-term contract duration may introduce cost volatility.
Exclusion of sources in competition requires further scrutiny.
Potential for contractor to reduce quality to maintain profit margins on fixed-price contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $102.0 million to PUGET SOUND COMMERCE CENTER, INC.. 200112!000392!1700!BS799 !SUPERVISOR SHIPBUILDING CONVERSI!N0002401C4115 !A!N!*!N!A00001 !20010709!20011105!001288828!001288828!001288828!N!TODD PACIFIC SHIPYARDS CORPORA!1801 16TH AVE SW !SEATTLE !WA!98134!07695!035!53!BREMERTON !KITSAP !WASHINGTON!+000000070000!N!N!000000000000!J999!NON-NUCLEAR SHIP REPAIR (WEST) !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !336611!*!*!3! ! !B!*!*!*!B!*!*!N!

Who is the contractor on this award?

The obligated recipient is PUGET SOUND COMMERCE CENTER, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $102.0 million.

What is the period of performance?

Start: 2001-07-09. End: 2016-09-23.

What specific types of non-nuclear ship repairs are covered under this contract?

The provided data indicates the contract is for 'NON-NUCLEAR SHIP REPAIR (WEST)' but does not detail the specific types of repairs. Typically, such contracts cover a broad range of services including hull maintenance, propulsion system repairs, electrical and electronic system upkeep, habitability improvements, and component replacements for various classes of naval vessels. The exact scope would be detailed in the contract's statement of work, which is not available in this data snippet. These repairs are crucial for maintaining the operational readiness and safety of the fleet.

How does the $101.9 million contract value compare to typical annual spending on non-nuclear ship repair for the Navy?

The $101.9 million contract value represents a significant, multi-year commitment rather than typical annual spending. The contract duration is approximately 15 years (5555 days). Annual spending on ship repair can fluctuate significantly based on fleet size, deployment schedules, and maintenance needs. While this single contract is substantial, the Navy's total annual budget for ship maintenance and repair is in the billions of dollars, encompassing numerous contracts for various types of maintenance, modernization, and repair across the entire fleet. This specific contract likely covers a defined set of vessels or a specific region's repair needs over its extended period.

What are the potential risks associated with a firm fixed-price contract of this duration?

Firm fixed-price contracts offer cost certainty but carry risks, especially over long durations like this 15-year contract. If the cost of labor, materials, or unforeseen technical challenges increases significantly beyond initial projections, the contractor may face reduced profit margins or even losses. Conversely, if costs decrease, the contractor benefits disproportionately. For the government, the risk is that the fixed price may become uncompetitive over time if market rates change substantially, or that the contractor may be incentivized to cut corners on quality to protect profits if not rigorously overseen. Effective contract management and performance monitoring are crucial to mitigate these risks.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply for this contract?

This contract type suggests that the initial solicitation was intended for broad competition ('full and open'). However, 'after exclusion of sources' indicates that certain potential bidders were specifically excluded from participating. The reasons for exclusion are not provided but could be based on factors such as past performance, technical capabilities, security clearances, or specific requirements outlined in the solicitation. While it aims for competition, the exclusion of sources means the pool of bidders was narrower than a purely 'full and open' competition, which could potentially impact the level of price competition achieved.

What is the significance of the NAICS code 336611 for this contract?

The North American Industry Classification System (NAICS) code 336611, 'Ship Building and Repairing,' precisely categorizes the industry and services covered by this contract. This code signifies that the contractor, PUGET SOUND COMMERCE CENTER, INC., is engaged in the business of constructing, repairing, and altering ships and boats. For analysts, this code helps in benchmarking spending against industry averages, understanding the competitive landscape within the maritime defense sector, and identifying relevant industry standards and regulations.

What is the historical spending pattern for non-nuclear ship repair by the Department of the Navy?

The Department of the Navy consistently allocates substantial funding towards ship maintenance, repair, and modernization, as it is critical for maintaining fleet readiness. Historical spending patterns show a significant and ongoing investment in this area, often measured in the billions of dollars annually across various contract types and durations. This specific $101.9 million contract represents one component of that larger, sustained spending. Factors influencing historical spending include fleet size, aging vessel inventory, geopolitical demands, and budget appropriations. Long-term contracts like this one are common for major repair and overhaul projects.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC

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

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline