DoD's $1.3B Boat Building Contract with Huntington Ingalls: A Decade-Long Award with Limited Competition

Contract Overview

Contract Amount: $1,304,530,568 ($1.3B)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2003-11-25

End Date: 2012-12-31

Contract Duration: 3,324 days

Daily Burn Rate: $392.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Place of Performance

Location: WESTWEGO, JEFFERSON County, LOUISIANA, 70094, UNITED STATES OF AMERICA

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $1.30 billion to HUNTINGTON INGALLS INCORPORATED for work described as: Key points: 1. Significant contract value of over $1.3 billion awarded to a single entity. 2. Limited competition noted, raising questions about price discovery and potential cost efficiencies. 3. Long duration (2003-2012) suggests a substantial, long-term project. 4. The 'Boat Building' NAICS code indicates a specific industrial sector focus.

Value Assessment

Rating: questionable

The contract type is 'COST PLUS INCENTIVE FEE', which can lead to cost overruns if not managed tightly. Without comparable contracts, assessing the pricing against market benchmarks is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'NOT COMPETED', indicating a sole-source or limited competition award. This significantly restricts price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a fully competitive process, impacting taxpayer value.

Public Impact

Taxpayers funded a substantial $1.3 billion over nearly a decade for boat building. The award to Huntington Ingalls, a major defense contractor, highlights consolidation in the sector. The long-term nature of the contract implies a sustained need for these vessels within the Navy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Clear sector focus (Boat Building)
Award to established defense contractor

Sector Analysis

The defense sector, particularly shipbuilding and boat building, often involves large, complex contracts. Spending benchmarks can vary widely based on vessel type and technological sophistication.

Small Business Impact

The data indicates this contract was not competed and does not provide information on small business participation. Large defense contracts often have subcontracting goals, but direct award analysis is limited.

Oversight & Accountability

The 'NOT COMPETED' status suggests potential oversight gaps or justifications for sole-sourcing that warrant further investigation into the procurement process.

Related Government Programs

Boat Building
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for cost overruns (cost-plus)
Limited transparency on justification for sole-sourcing
Long contract duration without clear performance metrics for competition
Difficulty in benchmarking pricing due to unique nature or sole-source award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.30 billion to HUNTINGTON INGALLS INCORPORATED. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $1.30 billion.

What is the period of performance?

Start: 2003-11-25. End: 2012-12-31.

What was the justification for not competing this large boat building contract, and were alternative solutions considered?

The justification for not competing this contract is critical for understanding taxpayer value. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services. Without this justification, it's difficult to assess if the government adequately explored competitive options or if market conditions truly limited viable alternatives, potentially leading to suboptimal pricing.

How did the 'COST PLUS INCENTIVE FEE' structure impact the final cost compared to other contract types for similar naval vessels?

Cost-plus incentive fee contracts aim to share risk and reward between the government and contractor, incentivizing cost control and performance. However, they can lead to higher final costs than fixed-price contracts if cost targets are not well-defined or if the contractor's incentives do not strongly align with government cost-saving objectives. Analyzing the final cost against initial estimates and comparing it to similar fixed-price contracts would reveal the true cost-effectiveness.

What was the operational effectiveness and long-term value derived from the boats built under this $1.3 billion contract?

The ultimate effectiveness and value of the boats are paramount, regardless of contract structure. Assessing their performance, reliability, and contribution to naval missions over their service life is crucial. This includes evaluating if they met or exceeded operational requirements and provided a sound return on the significant taxpayer investment, considering maintenance and lifecycle costs.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Boat Building

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: Huntington Ingalls Industries, Inc (UEI: 967362331)

Address: 1000 ACCESS RD, PASCAGOULA, MS, 39567

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline