VSE Corporation awarded $77.5M contract for ship maintenance and repair services by the Department of the Navy

Contract Overview

Contract Amount: $77,506,554 ($77.5M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2018-04-04

End Date: 2021-06-30

Contract Duration: 1,183 days

Daily Burn Rate: $65.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FOTS FOR FMS CASE EG-P-GJZ

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $77.5 million to VSE CORPORATION for work described as: FOTS FOR FMS CASE EG-P-GJZ Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of nearly 3 years indicates a significant, ongoing need for these services. 3. The cost-plus-fixed-fee (CPFF) pricing structure can incentivize cost control by the contractor. 4. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The specific NAICS code (336611) points to a specialized sector within shipbuilding and repairing. 6. No small business set-aside was utilized, indicating the primary competition was likely among larger firms.

Value Assessment

Rating: good

The contract value of $77.5 million over approximately three years for ship maintenance and repair is substantial. Benchmarking against similar contracts is challenging without more specific service details, but the duration and scope suggest a fair market value. The CPFF structure, while allowing for flexibility, requires careful oversight to ensure costs remain reasonable and fixed fees are justified.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically leads to a more robust selection of qualified contractors and can foster competitive pricing. The number of bidders is not specified, but the 'full and open' designation suggests a healthy level of interest and potential for price discovery.

Taxpayer Impact: Taxpayers benefit from the competitive nature of the award, which generally drives down costs and ensures the government receives the best value for its investment in ship maintenance.

Public Impact

The primary beneficiaries are the U.S. Navy's fleet, ensuring operational readiness and extending the lifespan of critical assets. Services delivered include essential maintenance, repair, and potentially modernization of naval vessels. The geographic impact is likely concentrated around naval bases and shipyards where VSE CORPORATION operates. Workforce implications include employment opportunities for skilled tradespeople, engineers, and support staff within the maritime industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely monitored.
Dependence on a single contractor for a significant duration could limit flexibility in adapting to changing needs.
The specific nature of ship repair can be unpredictable, leading to scope creep if not managed tightly.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield good value.
The fixed fee component of the CPFF contract provides some cost certainty for the government.
VSE Corporation's role in ship maintenance indicates specialized expertise relevant to naval operations.

Sector Analysis

The shipbuilding and repair sector (NAICS 336611) is a critical component of the U.S. industrial base, supporting both commercial and defense needs. This contract falls within the defense segment, where maintenance and repair are essential for maintaining fleet readiness. Spending in this sector is often characterized by long-term contracts, specialized labor, and significant capital investment. Comparable spending benchmarks would typically involve other large-scale maintenance and repair contracts for naval vessels.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it indicate any specific subcontracting goals for small businesses in the provided data. This suggests that the primary competition likely involved larger, established firms capable of handling the scope and complexity of naval ship maintenance. The impact on the small business ecosystem is neutral based on this data, as there's no explicit inclusion or exclusion.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures would be embedded in the contract terms, including performance standards, delivery schedules, and financial reporting requirements. Transparency is facilitated through contract award databases, though detailed performance metrics may be less public. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Department of Defense Maintenance and Repair
Fleet Readiness Programs

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
Contract duration of nearly 3 years necessitates ongoing monitoring of performance and evolving needs.
Lack of specified small business subcontracting goals may limit opportunities for smaller firms in this contract's execution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $77.5 million to VSE CORPORATION. FOTS FOR FMS CASE EG-P-GJZ

Who is the contractor on this award?

The obligated recipient is VSE 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 $77.5 million.

What is the period of performance?

Start: 2018-04-04. End: 2021-06-30.

What is VSE Corporation's track record with the Department of the Navy for similar services?

VSE Corporation has a significant history of contracting with the Department of Defense, including the Navy, for a variety of services, often related to ship maintenance, repair, and logistics. Their experience typically spans decades, involving complex projects and a wide range of vessel types. Analyzing their past performance on similar contracts would involve reviewing contract histories for on-time delivery, adherence to budget, quality of work, and any documented performance issues or awards. This specific contract (EG-P-GJZ) is one of many awarded to VSE, and its success can be viewed within the broader context of their established relationship and performance history with the Navy.

How does the $77.5 million value compare to other ship maintenance contracts awarded by the Navy?

The $77.5 million value for this contract, spanning nearly three years, positions it as a mid-to-large-sized award for ship maintenance and repair. The Navy frequently awards contracts in the hundreds of millions, and sometimes billions, for major overhauls, modernization programs, and long-term fleet support. However, smaller, more focused maintenance and repair delivery orders are also common. This specific award appears to be a substantial, but not exceptionally large, investment in maintaining a portion of the fleet. Its value is reasonable when considering the duration and the specialized nature of naval vessel upkeep, which often requires significant labor and technical expertise.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for the contractor to incur costs that exceed initial estimates, even though their fee is fixed. While the fixed fee incentivizes efficiency, the 'cost-plus' element means the government ultimately bears the allowable costs. If not managed diligently, this can lead to cost overruns if the scope of work expands or unforeseen issues arise during maintenance and repair. Effective oversight, clear definition of allowable costs, and robust change order management are crucial to mitigate these risks and ensure the government receives good value without excessive expenditure.

How effective is full and open competition in ensuring value for money in ship repair contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in ship repair contracts. By allowing all qualified contractors to bid, it fosters a competitive environment that drives down prices and encourages innovation. The Navy typically benefits from a wider pool of potential suppliers, leading to better price discovery and a higher likelihood of selecting a contractor offering the best combination of cost, quality, and performance. While the process can be more time-consuming than other methods, the long-term savings and improved service quality often outweigh the initial investment in a robust competition.

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

Historical spending by the Department of the Navy on ship maintenance and repair has consistently been in the billions of dollars annually. This reflects the large size and operational tempo of the U.S. Navy's fleet, requiring continuous upkeep. Spending fluctuates based on fleet size, deployment schedules, modernization initiatives, and the age of vessels. The Navy utilizes a mix of contract types and competition levels to procure these services, including large-scale overhaul contracts, smaller repair task orders, and support services. Analyzing trends involves looking at overall budget allocations for maintenance and repair, as well as specific contract awards over multiple fiscal years.

What are the implications of this contract being awarded as a Delivery Order?

Awarding this contract as a Delivery Order (DO) implies that it is a specific task or order placed against a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar type of basic ordering agreement. This structure allows the Navy to procure services incrementally as needed, rather than awarding a single, large contract upfront. For taxpayers, this can mean more flexibility and potentially better cost control, as orders are placed based on specific requirements. It also suggests that VSE Corporation was previously awarded a larger IDIQ contract, indicating a pre-qualification and established relationship for providing these types of services.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002410R4204

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6348 WALKER LANE, ALEXANDRIA, VA, 22310

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

Financial Breakdown

Contract Ceiling: $77,561,277

Exercised Options: $77,506,554

Current Obligation: $77,506,554

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002411D4229

IDV Type: IDC

Timeline