Navy awards $121.5M for USS Shoup (DDG 86) FY11 DSRA, a sole-source contract for ship repair

Contract Overview

Contract Amount: $121,544,919 ($121.5M)

Contractor: Puget Sound Commerce Center, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-02-01

End Date: 2016-09-14

Contract Duration: 2,052 days

Daily Burn Rate: $59.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: EXECUTION PLANNING FOR USS SHOUP (DDG 86) FY11 DSRA

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98134

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $121.5 million to PUGET SOUND COMMERCE CENTER, INC. for work described as: EXECUTION PLANNING FOR USS SHOUP (DDG 86) FY11 DSRA Key points: 1. Contract awarded on a cost-plus-award-fee basis, allowing for performance incentives. 2. Long contract duration of 2052 days suggests a complex and extensive scope of work. 3. The contract was not competed, raising questions about potential cost efficiencies. 4. The primary contractor, Puget Sound Commerce Center, Inc., is responsible for execution planning. 5. The work is categorized under Ship Building and Repairing, a specialized sector. 6. The contract is for the fiscal year 2011 Drydocking and Special Repair Availability (DSRA).

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific scope of 'execution planning' for a DSRA. Without competitive bids, it's difficult to assess if the $121.5 million represents a fair market price. The cost-plus-award-fee structure means the final cost could fluctuate based on performance, but the initial award amount sets a high baseline. Comparisons to similar DSRA contracts for destroyers would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential bidders. This approach is typically used when only one contractor possesses the necessary specialized skills, facilities, or security clearances required for the work. The lack of competition limits the government's ability to leverage market forces to drive down costs and ensure the best possible pricing.

Taxpayer Impact: Taxpayers may not have received the most cost-effective solution due to the absence of competitive bidding. The government could not benefit from potential price reductions that might have emerged from a competitive procurement process.

Public Impact

The primary beneficiary is the U.S. Navy, specifically the USS Shoup (DDG 86), which will undergo necessary repairs and maintenance. The services delivered include detailed execution planning for the ship's Drydocking and Special Repair Availability. The geographic impact is centered in Washington state, where Puget Sound Commerce Center, Inc. is located. The contract supports specialized jobs within the maritime repair and shipbuilding industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Long contract duration could lead to cost overruns if not managed effectively.
Cost-plus-award-fee contracts can sometimes incentivize higher spending if not carefully monitored.

Positive Signals

Contract awarded to a specific entity for specialized execution planning, suggesting a tailored approach.
The award fee component allows for incentivizing contractor performance and quality.
The contract addresses critical maintenance needs for a naval vessel, ensuring operational readiness.

Sector Analysis

The maritime shipbuilding and repair sector is highly specialized, involving complex engineering and skilled labor. This contract falls within the broader defense industrial base, focusing on maintaining naval assets. The North American Industry Classification System (NAICS) code 336611 (Ship Building and Repairing) indicates a specific segment of this market. Benchmarking against similar DSRA contracts for guided-missile destroyers would provide context, but the sole-source nature complicates direct cost comparisons.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business) flag is also false. This suggests that the prime contract was not specifically targeted towards small businesses, and there is no explicit indication of subcontracting requirements for small businesses within the provided data. The impact on the small business ecosystem is therefore likely minimal unless the prime contractor voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The 'cost-plus-award-fee' structure necessitates close monitoring of costs and performance to ensure the award fee is justified and that the overall expenditure remains within reasonable bounds. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Repair Contracts
Defense Maintenance and Repair
Shipbuilding and Repair Services
Drydocking and Special Repair Availability (DSRA)

Risk Flags

Sole-source award
Long contract duration
Cost-plus contract type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $121.5 million to PUGET SOUND COMMERCE CENTER, INC.. EXECUTION PLANNING FOR USS SHOUP (DDG 86) FY11 DSRA

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 $121.5 million.

What is the period of performance?

Start: 2011-02-01. End: 2016-09-14.

What is the track record of Puget Sound Commerce Center, Inc. with similar sole-source Navy contracts?

Analyzing the track record of Puget Sound Commerce Center, Inc. for similar sole-source Navy contracts requires access to historical contract databases beyond the provided snippet. Generally, sole-source awards are justified by unique capabilities or urgent needs. If the company has a history of successful performance on comparable contracts, it lends credibility to this award. However, without specific data on their past performance, cost control, and adherence to schedules on similar sole-source agreements, it's difficult to definitively assess their reliability in this instance. A review of past performance evaluations and any contract disputes or terminations would be crucial for a comprehensive understanding.

How does the $121.5 million award compare to the average cost of DSRA for a DDG-class destroyer?

Directly comparing the $121.5 million award for the USS Shoup's FY11 DSRA to an average cost is challenging without more specific data points and context. The cost of a DSRA can vary significantly based on the specific class of destroyer, the extent of the required repairs and upgrades, the shipyard's location and overhead, and the prevailing economic conditions at the time of the award. Furthermore, this contract is for 'execution planning,' which might represent a distinct phase or scope compared to the full execution of the DSRA itself. To establish a meaningful benchmark, one would need to identify comparable DSRA contracts for similar DDG classes awarded around the same fiscal year, factoring in the scope of work and the specific services included in the contract value.

What are the primary risks associated with a sole-source award for ship repair execution planning?

The primary risks associated with a sole-source award for ship repair execution planning include a lack of competitive pressure, which can lead to inflated pricing and reduced incentive for efficiency. Without multiple bidders, the government cannot be assured it is receiving the best value for its money. There's also a risk that the chosen contractor may not possess the most innovative or cost-effective solutions compared to what might have emerged from a competitive process. Furthermore, sole-source awards can sometimes be perceived as less transparent, potentially raising concerns about fairness and the justification for not competing the requirement. Effective oversight and robust negotiation become even more critical in sole-source situations to mitigate these risks.

What is the significance of the 'Cost Plus Award Fee' (CPAF) contract type in this context?

The 'Cost Plus Award Fee' (CPAF) contract type signifies that the contractor is reimbursed for all allowable costs incurred, plus a fixed fee that is subject to an award amount based on performance criteria. In the context of ship repair execution planning, this means Puget Sound Commerce Center, Inc. will be paid for its expenses, and additionally, it can earn a performance-based fee. This structure aims to incentivize the contractor to achieve specific performance objectives, such as meeting deadlines, maintaining quality standards, and potentially controlling costs within defined parameters. The government retains significant control over the award fee determination, allowing it to reward superior performance and penalize subpar results, thereby aligning contractor incentives with government objectives.

How does the contract duration of 2052 days impact the overall cost and risk?

A contract duration of 2052 days (approximately 5.6 years) for ship repair execution planning is exceptionally long and suggests a highly complex, multi-phase project or a long-term support agreement. Such extended durations inherently increase the risk of cost escalation due to inflation, potential changes in material costs, and unforeseen technical challenges that may arise over time. It also requires sustained government oversight to ensure the contractor remains on track and efficient throughout the period. While a longer duration might allow for more thorough planning and phased execution, it also means that the initial cost estimate of $121.5 million is subject to greater uncertainty and potential adjustments. Managing such a long-term contract effectively requires robust program management and continuous risk assessment.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002411R4401

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC

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

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

Financial Breakdown

Contract Ceiling: $125,754,973

Exercised Options: $125,754,973

Current Obligation: $121,544,919

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline