Navy awards $60.3M for non-nuclear ship repair, highlighting long-term contract and potential for cost overruns

Contract Overview

Contract Amount: $60,277,537 ($60.3M)

Contractor: Vigor Shipyards, LLC

Awarding Agency: Department of Defense

Start Date: 1999-10-05

End Date: 2007-09-20

Contract Duration: 2,907 days

Daily Burn Rate: $20.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200001!1700!000029!BS799 !SUPERVISOR SHIPBUILDING CONVERSI!N0002496C8500 !A!*!A00775 !19991005!19991220!086417136!001288828!001288828!N!05744!TODD PACIFIC SHIPYARDS CORP !1801 16TH AVE SW !SEATTLE !WA!98134!07695!035!53!BREMERTON !KITSAP !WASHINGTON!0001!+000000002863!N!N!000000000000!J999!NON-NUCLEAR SHIP REPAIR (WEST) !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !3731!3!*!*!D!B!A!*!A !N!R!2!001!B!* !A!N!Z!* !* !N!B!N!B!*!A!A!A!A!* !*!N!A!B!Y!F!N!*!*!*!

Place of Performance

Location: BREMERTON, KITSAP County, WASHINGTON, 98314

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $60.3 million to VIGOR SHIPYARDS, LLC for work described as: 200001!1700!000029!BS799 !SUPERVISOR SHIPBUILDING CONVERSI!N0002496C8500 !A!*!A00775 !19991005!19991220!086417136!001288828!001288828!N!05744!TODD PACIFIC SHIPYARDS CORP !1801 16TH AVE SW !SEATTLE !WA!98134!07695!035!53!BREMERTON !KIT… Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Cost-plus award fee contract type introduces potential for contractor incentives and performance-based payments. 3. Significant contract duration of over 8 years (2907 days) indicates a long-term need for services. 4. The contract was awarded to VIGOR SHIPYARDS, LLC, a known entity in the maritime sector. 5. Geographic focus on Washington state suggests regional concentration of naval operations or repair facilities. 6. The contract's value, while substantial, needs to be benchmarked against similar repair contracts for true value assessment.

Value Assessment

Rating: fair

The total award amount is $60,277,536.72. Without specific details on the scope of work or the number of individual task orders, it is difficult to definitively assess value for money. Cost-plus award fee contracts can sometimes lead to higher costs if not managed tightly, as the contractor is reimbursed for allowable costs plus a fee that may be adjusted based on performance. Benchmarking against similar ship repair contracts for the Navy would be necessary for a more precise evaluation.

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 a bid. This suggests a robust bidding environment. However, the number of bids received is not specified, which would provide further insight into the actual level of competition. A high number of bidders typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. It ensures that the government is not limited to a single provider, increasing the likelihood of securing services at a reasonable cost.

Public Impact

Naval operations in the Pacific Northwest benefit from the availability of essential ship repair services. The contract supports the maintenance and readiness of the U.S. Navy's fleet. Jobs are likely supported within the maritime industry in Washington state, particularly in the Bremerton area. The services delivered are critical for ensuring the operational capability of naval vessels.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can lead to cost overruns if not closely monitored.
The long duration of the contract may not reflect current market conditions or technological advancements.
Lack of specific details on performance metrics makes it hard to assess if the award fee truly incentivized optimal performance.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Contractor VIGOR SHIPYARDS, LLC is an established entity in the maritime repair sector.
The contract addresses a clear and ongoing need for naval ship maintenance.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on ship repair and maintenance. The U.S. Navy relies heavily on private sector shipyards for the upkeep of its vast fleet. The market for naval ship repair is characterized by specialized facilities, skilled labor, and significant regulatory requirements. Spending in this area is crucial for national security and fleet readiness. Comparable spending benchmarks would involve analyzing other large-scale ship repair contracts awarded by the Navy or other maritime agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. It is also unclear if VIGOR SHIPYARDS, LLC has subcontracting plans that would involve small businesses. Without this information, the direct impact on the small business ecosystem remains undetermined, though large prime contracts often create opportunities for smaller suppliers and service providers.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is generally facilitated through contract award databases, but detailed performance reports and cost breakdowns may be less accessible to the public, especially if related to national security.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Department of Defense Procurement
Cost-Plus Contracts
Maritime Industry Support

Risk Flags

Potential for cost overruns due to CPAF structure.
Risk of obsolescence or changing requirements over the long contract duration.
Need for robust oversight to ensure performance and cost control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.3 million to VIGOR SHIPYARDS, LLC. 200001!1700!000029!BS799 !SUPERVISOR SHIPBUILDING CONVERSI!N0002496C8500 !A!*!A00775 !19991005!19991220!086417136!001288828!001288828!N!05744!TODD PACIFIC SHIPYARDS CORP !1801 16TH AVE SW !SEATTLE !WA!98134!07695!035!53!BREMERTON !KITSAP !WASHINGTON!0001!+000000002863!N!N!000000000000!J999!NON-NUCLEAR SHIP REPAIR (WEST) !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !3731!3!*!*!D!B!A!*!A !N!R!

Who is the contractor on this award?

The obligated recipient is VIGOR SHIPYARDS, 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 $60.3 million.

What is the period of performance?

Start: 1999-10-05. End: 2007-09-20.

What is the historical spending pattern for non-nuclear ship repair (West) by the Department of the Navy?

Analyzing historical spending for 'NON-NUCLEAR SHIP REPAIR (WEST)' requires access to detailed historical contract data. This specific contract, awarded in 1999, represents a significant investment. To understand the pattern, one would need to examine the total obligated amounts, number of contracts, and average award values for this service category over several fiscal years. Factors such as fleet size, operational tempo, and budget allocations would influence these patterns. For instance, periods of increased geopolitical tension or fleet modernization efforts might correlate with higher spending. Conversely, budget constraints or shifts in naval strategy could lead to reduced expenditures. Without a broader dataset, this single award provides only a snapshot, making it difficult to discern a consistent trend or predict future spending.

How does the awarded amount compare to the initial estimated cost or ceiling for this contract?

The provided data indicates a total award amount of $60,277,536.72. However, it does not specify the initial estimated cost or the contract ceiling. For cost-plus award fee contracts, there is typically a ceiling on the total amount the government will pay. Understanding the relationship between the final award and the initial estimates or ceiling is crucial for assessing cost control. If the final award significantly exceeded initial projections or approached the ceiling, it could indicate potential cost management issues or scope creep. Conversely, if the award was well below the ceiling, it might suggest effective cost management and performance. Further analysis would require accessing the contract's original solicitation documents and subsequent modifications.

What specific performance metrics were used to determine the 'award fee' for VIGOR SHIPYARDS, LLC?

The contract type is 'COST PLUS AWARD FEE' (CPAF), which means the contractor receives reimbursement for allowable costs plus a performance-based fee. The specific metrics used to determine this award fee are typically detailed within the contract's Performance Work Statement (PWS) and the associated Award Fee Plan. These metrics often relate to factors such as on-time delivery, quality of work, adherence to budget (within allowable costs), safety performance, and responsiveness to government needs. Without access to the Award Fee Plan, it's impossible to know the exact criteria. A well-structured plan with clear, measurable metrics is essential for ensuring the fee effectively incentivizes desired contractor performance and provides value to the government.

What is the track record of VIGOR SHIPYARDS, LLC with similar Navy contracts?

VIGOR SHIPYARDS, LLC has a history of performing contracts for the U.S. Navy, particularly in ship repair and maintenance. To assess their track record comprehensively, one would need to review past contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past performance issues or disputes, and the successful completion of similar scope and value contracts. Their experience in the Pacific Northwest, where this contract is geographically focused, is also relevant. A review of their contract history would reveal their ability to meet deadlines, manage costs, maintain quality standards, and comply with contractual requirements. Positive past performance is a strong indicator of future success, while a history of issues might raise concerns.

What is the potential risk associated with the long duration (2907 days) of this contract?

A contract duration of 2907 days (approximately 8 years) carries several potential risks. Firstly, the technological landscape and naval requirements can change significantly over such a long period, potentially making the contracted services less relevant or requiring costly modifications. Secondly, market prices for labor and materials can fluctuate, impacting the cost-effectiveness of the contract, especially under a cost-plus structure. Thirdly, long-term contracts can sometimes reduce the government's flexibility to adapt to new strategies or alternative solutions. Finally, maintaining consistent oversight and performance management over an extended period can be challenging for the contracting agency. Mitigating these risks often involves incorporating mechanisms for review, modification, or termination within the contract itself.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC (UEI: 153727818)

Address: 1801 16TH AVE SW, SEATTLE, WA, 07

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline