DoD's $137.7M Ship Repair Contract with BAE Systems Hawaii Shipyards Faces Scrutiny for Value and Competition
Contract Overview
Contract Amount: $137,672,712 ($137.7M)
Contractor: BAE Systems Hawaii Shipyards Inc.
Awarding Agency: Department of Defense
Start Date: 2012-07-23
End Date: 2014-08-27
Contract Duration: 765 days
Daily Burn Rate: $180.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: IGF::OT::IGF PEARL HARBOR MSMO
Place of Performance
Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860
State: Hawaii Government Spending
Plain-Language Summary
Department of Defense obligated $137.7 million to BAE SYSTEMS HAWAII SHIPYARDS INC. for work described as: IGF::OT::IGF PEARL HARBOR MSMO Key points: 1. The contract awarded to BAE Systems Hawaii Shipyards for $137.7M raises questions about cost-effectiveness given the 'Cost Plus Award Fee' structure. 2. Full and open competition was utilized, but the specific pricing mechanisms and award fee criteria warrant closer examination for taxpayer value. 3. Potential risks include cost overruns inherent in 'Cost Plus' contracts and the effectiveness of oversight in ensuring fair pricing. 4. The sector is Ship Building and Repair, a critical but often high-cost area for the Department of Defense.
Value Assessment
Rating: questionable
The contract's 'Cost Plus Award Fee' structure makes direct pricing assessment difficult without detailed performance metrics. Benchmarking against similar ship repair contracts is essential to determine if the $137.7M represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery. However, the 'Cost Plus Award Fee' structure means the final price is not fixed upfront, potentially impacting the rigor of price negotiation.
Taxpayer Impact: The use of a 'Cost Plus Award Fee' contract necessitates robust oversight to ensure that costs are reasonable and that award fees are tied to demonstrable performance, thereby protecting taxpayer funds.
Public Impact
Taxpayers may be exposed to higher costs due to the 'Cost Plus Award Fee' structure, which incentivizes spending to achieve award fees. The critical nature of naval ship repair means delays or cost overruns can impact national security readiness. Transparency in the award fee criteria and performance metrics is crucial for public trust and accountability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure
- Potential for cost overruns
- Lack of fixed price
- Limited transparency on award fee criteria
Positive Signals
- Full and open competition
- Award fee structure can incentivize performance
Sector Analysis
This contract falls within the Ship Building and Repair sector, which is vital for maintaining naval fleet readiness. Spending in this sector can be highly variable due to the specialized nature of work and the long lifecycle of naval assets.
Small Business Impact
The data indicates this contract was awarded to BAE Systems Hawaii Shipyards Inc., a large entity. There is no explicit indication of small business subcontracting in the provided data, suggesting limited direct impact on small businesses for this specific award.
Oversight & Accountability
Oversight of 'Cost Plus Award Fee' contracts is critical. The Department of the Navy must ensure rigorous monitoring of costs and the objective application of award fee criteria to prevent waste and ensure value for money.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Plus Award Fee structure
- Potential for cost overruns
- Limited transparency on award fee criteria
- Lack of small business participation noted
Tags
ship-building-and-repairing, department-of-defense, hi, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $137.7 million to BAE SYSTEMS HAWAII SHIPYARDS INC.. IGF::OT::IGF PEARL HARBOR MSMO
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS HAWAII SHIPYARDS 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 $137.7 million.
What is the period of performance?
Start: 2012-07-23. End: 2014-08-27.
What specific performance metrics were used to determine the award fee, and how were they objectively measured to ensure fair compensation?
The effectiveness of the award fee structure hinges on clearly defined, measurable, and achievable performance metrics. Without insight into these specific criteria and the Navy's evaluation process, it's difficult to ascertain if the award fee truly reflects exceptional performance or simply met baseline expectations, potentially leading to inflated costs for taxpayers.
How does the 'Cost Plus Award Fee' structure compare to alternative contract types in mitigating risk and ensuring cost control for ship repair services?
While 'Cost Plus Award Fee' can incentivize contractor performance and flexibility, it inherently carries higher cost risk for the government compared to fixed-price contracts. The government assumes the cost risk, and the award fee is intended to reward performance above a baseline. Effective oversight is paramount to ensure costs remain reasonable and the award fee is justified.
What is the historical cost performance of BAE Systems Hawaii Shipyards Inc. on similar 'Cost Plus Award Fee' contracts with the Department of Defense?
Analyzing historical cost performance on similar contracts would provide valuable context for assessing the current $137.7M award. Understanding past cost variances, award fee payouts, and any identified issues can help determine if this contract represents a continuation of efficient practices or a potential area for increased scrutiny regarding cost control and value.
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
Solicitation Procedures: SEALED BID
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC
Address: 3049 UALENA ST STE 915, HONOLULU, HI, 96819
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $137,672,712
Exercised Options: $137,672,712
Current Obligation: $137,672,712
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-07-23
Current End Date: 2014-08-27
Potential End Date: 2014-08-27 00:00:00
Last Modified: 2022-10-24
More Contracts from BAE Systems Hawaii Shipyards Inc.
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- Ship Repair Requirement for the Multi-Ship Multi-Option (msmo) Contract — $545.9M (Department of Defense)
- Tycom Repair and Alterations — $44.3M (Department of Defense)
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