DoD's Navy Awards $78.6M Contract to VSE Corp for Ship Building and Repair
Contract Overview
Contract Amount: $78,603,920 ($78.6M)
Contractor: VSE Corporation
Awarding Agency: Department of Defense
Start Date: 2021-06-30
End Date: 2024-06-30
Contract Duration: 1,096 days
Daily Burn Rate: $71.7K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FOTS ENGINEERING (EG ICTAT), OY4
Place of Performance
Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $78.6 million to VSE CORPORATION for work described as: FOTS ENGINEERING (EG ICTAT), OY4 Key points: 1. The contract value of $78.6 million is significant within the shipbuilding and repair sector. 2. VSE Corporation, a large business, secured this award under full and open competition. 3. The contract duration of 1096 days suggests a substantial, ongoing requirement. 4. The Cost Plus Fixed Fee (CPFF) pricing structure warrants scrutiny for potential cost overruns.
Value Assessment
Rating: fair
The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to higher costs if not managed tightly. Benchmarking against similar CPFF contracts for ship repair is difficult without more specific service details, but the fee structure itself presents a moderate risk.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The award was made under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better pricing for the government compared to sole-source awards.
Taxpayer Impact: Full and open competition is intended to ensure taxpayer funds are used efficiently by fostering a competitive environment, though the CPFF structure requires careful oversight to control costs.
Public Impact
Naval readiness and operational capability are directly supported by this contract. The contract impacts the shipbuilding and repair industry, potentially creating jobs and stimulating economic activity in that sector. VSE Corporation's role highlights the reliance on private sector partners for critical defense infrastructure maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee pricing structure
- Long contract duration may mask inefficiencies
- Lack of specific performance metrics in provided data
Positive Signals
- Awarded under full and open competition
- Supports critical Department of Defense mission
- Established contractor with experience
Sector Analysis
The shipbuilding and repair sector is a critical component of national defense, involving complex engineering and maintenance services. Spending benchmarks vary widely based on the type and scale of vessels, but contracts in the tens of millions are common for significant repair and overhaul work.
Small Business Impact
This contract was awarded to VSE Corporation, a large business. There is no indication that small businesses were involved as subcontractors in this specific delivery order, which is common for large prime contracts.
Oversight & Accountability
The Cost Plus Fixed Fee (CPFF) contract type necessitates robust oversight from the Department of the Navy to ensure costs are reasonable and the fixed fee is earned appropriately. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Plus Fixed Fee pricing structure
- Potential for cost overruns
- Lack of detailed scope of work
- Long contract duration without clear performance milestones
Tags
ship-building-and-repairing, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $78.6 million to VSE CORPORATION. FOTS ENGINEERING (EG ICTAT), OY4
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 $78.6 million.
What is the period of performance?
Start: 2021-06-30. End: 2024-06-30.
What specific ship classes or types are covered under this delivery order, and how does the scope of work compare to industry standards for similar repair and maintenance tasks?
The provided data does not specify the ship classes or types. To assess value, a detailed breakdown of the work required (e.g., hull repairs, system overhauls, modernization) is needed. Comparing this scope against industry benchmarks for similar vessels and repair complexity would reveal if the $78.6 million price is justified or inflated, considering the CPFF structure's inherent cost risks.
Given the CPFF structure, what are the specific mechanisms in place to mitigate cost overruns and ensure VSE Corporation maintains cost discipline throughout the contract duration?
Effective oversight for a CPFF contract relies on stringent monitoring of direct costs, labor hours, and material expenses. The Department of the Navy must implement detailed auditing procedures, require regular cost reporting, and establish clear criteria for allowable costs. Performance incentives or penalties tied to cost control, if included in the contract, would further mitigate risk.
How does the performance history of VSE Corporation on similar naval shipbuilding and repair contracts inform the assessment of this award's effectiveness and potential risks?
Assessing effectiveness requires examining VSE Corporation's past performance on comparable contracts. Key metrics include on-time delivery, adherence to budget (especially relevant for CPFF), quality of work, and responsiveness to issues. A review of their track record would highlight any recurring problems or areas of excellence, providing insight into the likelihood of successful contract execution and potential risks.
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: $78,603,920
Exercised Options: $78,603,920
Current Obligation: $78,603,920
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0002411D4229
IDV Type: IDC
Timeline
Start Date: 2021-06-30
Current End Date: 2024-06-30
Potential End Date: 2024-06-30 00:00:00
Last Modified: 2023-04-24
More Contracts from VSE Corporation
- 200603!001420!2100!w15p7t!usa Communications-Electronics !daab0703db012 !A!N! !Y!0069 ! !20051230!20090130!049997380!049997380!049997380!n!vse Corporation !2550 Huntington AVE !alexandria !va!22303!01000!510!51!alexandria !alexandria (city) !virginia !+000030653370!n!n!000000000000!r414!systems Engineering Services !A7 !electronics and Communication Equip !000 !NOT Discernable !541330!E! !5!B!M! !A! !99990909!B! ! !A! !a!n!y!2!014!b! !C!N!Z! ! !n!b!n!n! ! !C! !a!a!000!a!b!n! ! ! ! ! ! !0001! ! — $428.9M (Department of Defense)
- CR-2417, "PM Assured Mobility Systems (AMS) RG31 and RG33 Family of Vehicles (fov)contractor Logistics Support (CLS)" — $324.8M (Department of Defense)
- Task Order for PM AMS Contractor Logistic Support for Route Clearance Equipment. Theater of Operations Iraq and Afghanistan — $272.5M (Department of Defense)
- Hourly Labor of Mechanics, Painters and Other SCA Covered Labor Categories AT RED River Army Depot — $210.0M (Department of Defense)
- Siezed and Forfetited Assets — $194.3M (Department of the Treasury)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)