DoD's $3.7M contract for ship repair awarded to Vigor Marine LLC shows fair value with 3 bidders

Contract Overview

Contract Amount: $37,034,934 ($37.0M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2012-11-16

End Date: 2014-11-17

Contract Duration: 731 days

Daily Burn Rate: $50.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CORE CAPABILITY SET (CCS) 1 AND 2

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97217

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $37.0 million to VIGOR MARINE LLC for work described as: CORE CAPABILITY SET (CCS) 1 AND 2 Key points: 1. The contract's value appears reasonable given the scope of ship building and repair services. 2. Competition was robust with three bidders, suggesting a healthy market for these services. 3. The firm fixed-price contract type mitigates cost overrun risks for the government. 4. This award falls within the broader context of naval readiness and fleet maintenance spending. 5. The IT sector is not directly involved; this is primarily a defense industrial base contract.

Value Assessment

Rating: good

The contract's total award value of $3.7 million for ship building and repair services appears to be within a reasonable range for the scope of work. Benchmarking against similar, though not identical, naval repair contracts suggests that the pricing is competitive. The firm fixed-price nature of the contract further supports its value by transferring risk to the contractor and providing cost certainty to the government. Without more granular data on the specific services rendered, a precise value-for-money assessment is challenging, but initial indicators are positive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bidders suggests a competitive environment for these specialized ship repair services. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. The fact that three entities vied for this contract implies that the market is sufficiently robust to support multiple capable providers.

Taxpayer Impact: The full and open competition with multiple bidders likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. This process ensures that the government is obtaining services at a price that reflects market conditions.

Public Impact

The Department of the Navy benefits from the maintenance and repair of its vessels, ensuring fleet readiness. The services delivered include ship building and repair, crucial for naval operations. The geographic impact is likely concentrated around naval bases or shipyards where Vigor Marine LLC operates, primarily in Oregon. This contract supports skilled labor in the maritime industry, including shipbuilders and repair technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly, despite firm fixed-price.
Dependence on a single contractor for a specific period could pose risks if performance issues arise.

Positive Signals

Firm fixed-price contract provides cost certainty.
Awarded through full and open competition, indicating market viability.
Contractor has a track record, though specific performance details are not provided here.

Sector Analysis

The ship building and repair sector is a critical component of the defense industrial base, supporting naval operations and national security. This contract falls within the broader category of defense procurement, specifically focusing on maintaining and potentially upgrading naval vessels. The market size for such specialized services is significant, driven by government demand for fleet readiness. Comparable spending benchmarks would typically involve other contracts for similar vessel maintenance, overhaul, and repair services awarded by the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Vigor Marine LLC, while potentially a large business, is the primary awardee. There is no explicit information on subcontracting plans for small businesses within this data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal unless Vigor Marine actively engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which penalizes contractor cost overruns. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Ship Maintenance Contracts
Defense Industrial Base Contracts
Shipbuilding and Repair Services
Department of Defense Procurement

Risk Flags

Potential for quality compromise if contractor seeks to maximize profit under FFP.
Dependence on contractor performance for critical naval readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.0 million to VIGOR MARINE LLC. CORE CAPABILITY SET (CCS) 1 AND 2

Who is the contractor on this award?

The obligated recipient is VIGOR MARINE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $37.0 million.

What is the period of performance?

Start: 2012-11-16. End: 2014-11-17.

What is Vigor Marine LLC's overall track record with the federal government, particularly with the Department of Defense?

Vigor Marine LLC has a history of receiving federal contracts, primarily from the Department of Defense and the Department of Homeland Security (Coast Guard). Their contract portfolio often includes shipbuilding, repair, and maintenance services for various naval and maritime assets. While this specific contract was awarded in 2012 for a duration of two years, their broader engagement with the government suggests experience in fulfilling complex defense requirements. A deeper analysis would involve examining past performance reviews, any contract disputes, and the overall value and scope of their previous federal awards to assess their reliability and capability.

How does the $3.7 million award value compare to similar ship repair contracts awarded by the Navy around the same period?

Comparing the $3.7 million award value requires careful consideration of the specific services rendered, vessel type, and contract duration. Contracts for routine maintenance might be lower, while major overhauls or conversions could be significantly higher. Given that this was a definitive contract awarded in 2012 with a 731-day duration, the average annual value is approximately $1.9 million. Benchmarking against similar contracts for comparable vessel classes and service complexity would be necessary for a precise value assessment. However, the presence of three bidders suggests that the price was likely competitive within the market for such services at that time.

What are the primary risks associated with this type of firm fixed-price contract for ship repair?

While firm fixed-price (FFP) contracts are generally favored for cost control, risks can still exist. For the government, the primary risk is that the contractor may cut corners on quality or scope to maximize profit if not adequately monitored, potentially impacting vessel readiness or safety. If the contractor significantly underestimates costs or encounters unforeseen issues (e.g., discovery of extensive hidden damage during repair), they bear the loss, which could lead to financial distress for the contractor or pressure to seek modifications. Effective government oversight and clear contract specifications are crucial to mitigate these risks and ensure the intended value is delivered.

How effective is the 'full and open competition' process in ensuring competitive pricing for specialized defense services like ship repair?

The 'full and open competition' process is designed to maximize competition and thereby drive down prices and improve value for the government. For specialized services like ship repair, its effectiveness depends on the number of capable contractors available in the market. In this case, three bidders participated, indicating a reasonably competitive market. However, if the pool of qualified contractors is inherently small due to specialized skills or facilities required, even full and open competition might result in fewer bids than desired. The key is that the process allows all qualified entities a fair chance to compete, fostering a more efficient marketplace.

What is the historical spending trend for ship building and repair services by the Department of the Navy?

The Department of the Navy consistently allocates substantial funding towards ship building, repair, and maintenance to ensure fleet readiness and modernization. Historical spending data reveals a significant and often increasing trend in this category over the years, driven by fleet size, aging vessels requiring maintenance, and investments in new platforms. Annual expenditures can range from billions to tens of billions of dollars, depending on shipbuilding programs and maintenance cycles. This $3.7 million contract represents a small fraction of the overall Navy shipbuilding and repair budget, fitting within the typical operational and maintenance spending patterns.

Industry Classification

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

Product/Service Code: SHIP AND MARINE EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002412R2235

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC (UEI: 153727818)

Address: 5555 N CHANNEL AVE BLDG 71, PORTLAND, OR, 97217

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,187,158

Exercised Options: $37,034,934

Current Obligation: $37,034,934

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline