Navy Awards $3.4B for Destroyer Construction to Bath Iron Works
Contract Overview
Contract Amount: $3,405,711,408 ($3.4B)
Contractor: Bath Iron Works Corporation
Awarding Agency: Department of Defense
Start Date: 2002-08-01
End Date: 2011-12-30
Contract Duration: 3,438 days
Daily Burn Rate: $990.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: 200212!025207!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002402C2303 !A!N! !N! !20020801!20080426!045953718!045953718!001381284!N!BATH IRON WORKS CORPORATION !700 WASHINGTON ST STOP 1 !BATH !ME!04530!03355!023!23!BATH !SAGADAHOC !MAINE !+000464373508!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !336611!E! !3! ! ! ! ! !99990909!B! ! !A! !A!Y!L!2!002!N!3A!A!N!D! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! !Y! ! !0001!
Place of Performance
Location: BATH, SAGADAHOC County, MAINE, 04530
State: Maine Government Spending
Plain-Language Summary
Department of Defense obligated $3.41 billion to BATH IRON WORKS CORPORATION for work described as: 200212!025207!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002402C2303 !A!N! !N! !20020801!20080426!045953718!045953718!001381284!N!BATH IRON WORKS CORPORATION !700 WASHINGTON ST STOP 1 !BATH !ME!04530!03355!023!23!BATH !SAGAD… Key points: 1. Contract awarded for construction of DDG-51 class destroyers. 2. Bath Iron Works is the sole contractor, raising competition concerns. 3. Fixed Price Incentive contract type suggests shared risk but potential for cost overruns. 4. Long-term contract duration indicates significant investment in naval shipbuilding. 5. Sector focus on Defense, specifically shipbuilding and repair.
Value Assessment
Rating: fair
The total award amount is $3,405,711,408. Benchmarking against similar destroyer construction contracts is difficult without more granular cost data, but the scale suggests a significant investment per vessel.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may impact price discovery and potentially lead to higher costs compared to broader competition.
Taxpayer Impact: Taxpayer funds are allocated for critical naval assets. The limited competition raises questions about achieving the best possible value for the investment.
Public Impact
Supports national defense by funding the construction of advanced naval vessels. Impacts the shipbuilding industry and associated supply chains. Ensures the U.S. Navy maintains its fleet capabilities. Potential for job creation in the shipbuilding sector.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Limited competition raises cost concerns.
- Fixed Price Incentive contract requires careful monitoring.
- Long contract duration increases exposure to economic fluctuations.
Positive Signals
- Secures critical naval assets.
- Supports a key defense industrial base.
- Long-term commitment provides stability for the contractor.
Sector Analysis
This contract falls within the Defense sector, specifically shipbuilding and repair. Spending in this area is driven by national security needs and fleet modernization programs. Benchmarks are highly specific to vessel type and complexity.
Small Business Impact
Analysis of small business participation is not detailed in the provided data. Large shipbuilding contracts often involve extensive subcontracting, which could offer opportunities for small businesses, but direct award information is absent.
Oversight & Accountability
The contract is managed by the Department of the Navy, part of the Department of Defense. Oversight would involve program management, contract administration, and potentially congressional review given the significant funding.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Limited competition may result in higher costs.
- Potential for cost overruns under FPI contract.
- Long contract duration exposes project to schedule delays.
- Dependence on a single source for critical naval assets.
Tags
ship-building-and-repairing, department-of-defense, me, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.41 billion to BATH IRON WORKS CORPORATION. 200212!025207!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002402C2303 !A!N! !N! !20020801!20080426!045953718!045953718!001381284!N!BATH IRON WORKS CORPORATION !700 WASHINGTON ST STOP 1 !BATH !ME!04530!03355!023!23!BATH !SAGADAHOC !MAINE !+000464373508!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !336611!E! !3! ! ! ! ! !99990909!B
Who is the contractor on this award?
The obligated recipient is BATH IRON WORKS 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 $3.41 billion.
What is the period of performance?
Start: 2002-08-01. End: 2011-12-30.
What specific factors led to the exclusion of other sources in this competition, and how were they documented?
The data indicates 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This suggests that while a competition was held, certain sources were excluded. The specific justification for exclusion, such as unique capabilities, prior performance, or specialized facilities, would typically be detailed in the contract award documentation and justification for other than full and open competition (J&A).
How does the Fixed Price Incentive (FPI) structure balance cost control with performance incentives for Bath Iron Works?
An FPI contract establishes a target cost, target profit, and final cost ceiling. If the final cost is below the target, both the contractor and the government share in the savings. If it exceeds the target, the contractor bears a portion of the overrun up to the ceiling. This structure incentivizes the contractor to control costs while meeting performance specifications.
What is the projected economic impact and job creation associated with this $3.4 billion contract over its duration?
A contract of this magnitude for shipbuilding typically generates significant economic activity, including direct employment at the shipyard and indirect employment through the supply chain. The exact job creation figures would depend on the labor intensity of the specific destroyer class being built and the sourcing of materials and components.
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
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Parent Company: General Dynamics Corp
Address: 700 WASHINGTON ST STOP 1, BATH, ME, 04530
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2002-08-01
Current End Date: 2011-12-30
Potential End Date: 2011-12-30 00:00:00
Last Modified: 2022-09-22
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