Navy awards $237.7M contract for FMS boats, with Teledyne Brown Engineering as sole provider
Contract Overview
Contract Amount: $237,743,384 ($237.7M)
Contractor: Teledyne Brown Engineering, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-09-27
End Date: 2028-12-30
Contract Duration: 3,382 days
Daily Burn Rate: $70.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PRODUCTION OF FMS BOATS U1, U2, AND U3
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35807
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $237.7 million to TELEDYNE BROWN ENGINEERING, INC. for work described as: PRODUCTION OF FMS BOATS U1, U2, AND U3 Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Long contract duration of over 9 years suggests a strategic, long-term need for these specialized vessels. 3. The absence of competition limits opportunities for innovation and cost-saving measures from alternative suppliers. 4. Firm Fixed Price (FFP) contract type shifts cost risk to the contractor, but the sole-source nature may negate this benefit. 5. The contract's value places it within a significant spending category for naval shipbuilding and repair. 6. Focus on specific FMS (Foreign Military Sales) boats indicates a specialized role within broader defense logistics.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and specialized product. Without competitive bids, it's difficult to ascertain if the $237.7 million represents a fair market price. The firm fixed-price structure is generally favorable for the government, but the lack of competition means the government cannot leverage market forces to ensure optimal pricing. Further analysis would require access to cost breakdowns or comparisons with similar, independently procured vessels.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Teledyne Brown Engineering, Inc., was considered. This typically occurs when a unique capability or proprietary technology is required, or in situations where only one source can fulfill the requirement. The lack of competition means there was no opportunity for other companies to bid, potentially leading to higher prices than if a competitive process had been employed.
Taxpayer Impact: Taxpayers may be paying a premium for this vessel procurement due to the absence of competitive pressure. Without competing offers, the government has less leverage to negotiate the lowest possible price.
Public Impact
The primary beneficiaries are likely foreign military partners receiving these FMS boats through U.S. government sales. The contract delivers specialized naval vessels (FMS Boats U1, U2, and U3) critical for specific operational or logistical roles. The contract's performance is geographically tied to the contractor's facilities in Alabama, impacting the local economy. This contract supports specialized shipbuilding jobs within Teledyne Brown Engineering, contributing to the skilled maritime workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential cost savings for taxpayers.
- Long contract duration increases exposure to potential cost overruns or scope creep if not managed tightly.
- Lack of competition may stifle innovation in vessel design and production methods.
- Specific FMS designation requires careful tracking to ensure end-use requirements are met and funds are used appropriately.
Positive Signals
- Firm Fixed Price contract type provides cost certainty for the government, assuming the price is fair.
- Teledyne Brown Engineering is a known entity in shipbuilding, suggesting a degree of established capability.
- Contract supports critical naval assets, potentially enhancing U.S. foreign military cooperation and national security objectives.
Sector Analysis
The shipbuilding and repair industry (NAICS 336611) is a capital-intensive sector involving complex engineering and manufacturing. This contract falls within the defense sub-sector, specifically focusing on specialized vessels for foreign military sales. The total federal spending in this category can fluctuate significantly based on geopolitical needs and defense budgets. Comparable spending benchmarks are difficult to establish without knowing the exact specifications and capabilities of these FMS boats, but contracts in this sector often run into tens or hundreds of millions of dollars.
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. While Teledyne Brown Engineering, Inc. may utilize small business subcontractors, the primary award mechanism did not prioritize small business participation. This could limit opportunities for smaller firms to directly engage in this large-scale shipbuilding effort.
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 firm fixed-price nature simplifies some aspects of financial oversight, but performance monitoring remains crucial. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics may not always be publicly available.
Related Government Programs
- Foreign Military Sales Program
- Naval Shipbuilding and Repair
- Department of Defense Procurement
- Shipbuilding and Repair Services
Risk Flags
- Sole-source award
- Long contract duration
- Lack of competition
Tags
defense, department-of-defense, department-of-the-navy, ship-building-and-repairing, definitive-contract, firm-fixed-price, sole-source, alabama, fms-boats, teledyne-brown-engineering
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $237.7 million to TELEDYNE BROWN ENGINEERING, INC.. PRODUCTION OF FMS BOATS U1, U2, AND U3
Who is the contractor on this award?
The obligated recipient is TELEDYNE BROWN ENGINEERING, 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 $237.7 million.
What is the period of performance?
Start: 2019-09-27. End: 2028-12-30.
What is the specific operational role or mission of FMS Boats U1, U2, and U3?
The provided data does not specify the exact operational role or mission of FMS Boats U1, U2, and U3. The designation 'FMS Boats' indicates they are intended for foreign military sales, suggesting they are likely designed for specific maritime security, patrol, or support functions required by allied nations. Their classification under NAICS 336611 (Ship Building and Repairing) confirms they are vessels. Without further details on their specifications (size, speed, armament, equipment), their precise function remains undefined. Typically, such boats could range from small patrol craft to larger support or transport vessels, depending on the end-user's requirements and the scope of the FMS case.
How does the $237.7 million contract value compare to similar naval vessel procurements?
Direct comparison of the $237.7 million contract value to similar naval vessel procurements is challenging without knowing the specific capabilities, size, and complexity of FMS Boats U1, U2, and U3. However, this value falls within the range of significant naval contracts. For instance, contracts for patrol boats, cutters, or smaller auxiliary vessels can range from tens to hundreds of millions of dollars. Larger platforms like destroyers or aircraft carriers cost billions. Given this contract is for 'boats' and not major warships, $237.7 million suggests a substantial number of vessels or highly specialized, larger 'boats' with advanced systems. The sole-source nature complicates value assessment, as competitive bids often drive prices down for comparable platforms.
What are the key risks associated with a sole-source contract of this magnitude and duration?
The primary risks associated with this sole-source contract are related to cost and performance. Without competition, there's a heightened risk of the government paying a non-competitive price, potentially exceeding fair market value. The long duration (ending in late 2028) increases the risk of cost growth due to inflation, unforeseen technical challenges, or changes in requirements that may not be easily renegotiated. Contractor performance risk is also present; while Teledyne Brown Engineering is an established firm, the lack of competitive pressure might reduce the incentive to optimize efficiency or proactively address potential issues. Robust government oversight and clear performance metrics are crucial to mitigate these risks.
What is Teledyne Brown Engineering, Inc.'s track record with the Department of Defense?
Teledyne Brown Engineering, Inc. has a significant track record with the Department of Defense, often involved in complex engineering, manufacturing, and integration projects. While specific details for this FMS boat contract aren't public, the company has historically worked on various naval platforms, including submarines and surface ships, as well as other defense systems. Their involvement in shipbuilding and repair (NAICS 336611) suggests experience relevant to this contract. A comprehensive review would involve examining their past performance ratings, any past disputes or contract modifications, and their overall history of delivering complex defense hardware on time and within budget across numerous contracts.
How has federal spending on shipbuilding and repair (NAICS 336611) trended in recent years?
Federal spending on shipbuilding and repair (NAICS 336611) has historically been substantial, driven by the Navy's fleet modernization and maintenance requirements, as well as Coast Guard and other maritime agency needs. Spending in this sector can fluctuate based on defense budgets, strategic priorities, and the lifecycle of major shipbuilding programs. In recent years, there has been a consistent demand for new construction, conversions, and repair services. While specific annual figures vary, the sector generally represents billions of dollars in federal obligations annually. Factors like geopolitical tensions, the need for new classes of vessels, and sustainment of the existing fleet contribute to sustained spending levels, though specific contract awards like this one represent a fraction of the total.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002419R6402
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Teledyne Technologies Incorporated
Address: 300 SPARKMAN DR NW, HUNTSVILLE, AL, 35805
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $304,819,338
Exercised Options: $238,531,093
Current Obligation: $237,743,384
Actual Outlays: $2,696,829
Subaward Activity
Number of Subawards: 212
Total Subaward Amount: $28,464,197
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-09-27
Current End Date: 2028-12-30
Potential End Date: 2029-09-25 00:00:00
Last Modified: 2025-12-17
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