Navy awards $28.9M contract for HERSHEL WILLIAMS ship repair, with strong competition

Contract Overview

Contract Amount: $28,892,501 ($28.9M)

Contractor: Detyens Shipyards Inc

Awarding Agency: Department of Defense

Start Date: 2018-12-21

End Date: 2019-07-28

Contract Duration: 219 days

Daily Burn Rate: $131.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HALE N104-A2 USNS HERSHEL WILLIAMS PSA

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29405

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to DETYENS SHIPYARDS INC for work described as: HALE N104-A2 USNS HERSHEL WILLIAMS PSA Key points: 1. Contract value represents a significant investment in naval readiness and maintenance. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The fixed-price contract type aims to control costs and provide predictability. 4. The duration of the contract suggests a substantial scope of work. 5. The contractor has experience in shipbuilding and repair, indicated by the NAICS code. 6. The geographic location of the awardee may have local economic implications.

Value Assessment

Rating: good

The contract value of $28.9 million for the repair of the USNS HERSHEL WILLIAMS appears reasonable given the scope of work typically involved in maintaining a naval vessel. Benchmarking against similar ship repair contracts for vessels of this class would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage costs effectively, but the final cost will depend on the execution of the repairs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. This approach generally fosters a competitive environment, driving down prices and encouraging innovation among potential contractors. The presence of two bids suggests a healthy level of interest and competition for this type of naval repair work.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more competitive pricing and ensures that the government receives the best value for its investment in maintaining naval assets.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the HERSHEL WILLIAMS is maintained to perform its duties. The services delivered include essential ship maintenance and repair, crucial for the longevity and functionality of naval assets. The geographic impact is centered in South Carolina, where the ship repair work was likely performed, potentially boosting the local economy and maritime industry. The contract supports skilled labor in the shipbuilding and repair sector, contributing to the workforce in that specialized field.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during repairs, despite the fixed-price structure.
Dependence on the contractor's ability to meet the specified repair timeline and quality standards.
Risk of delays impacting the operational availability of the USNS HERSHEL WILLIAMS.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Firm fixed-price contract type helps to control costs and provides budget certainty.
The contractor is located in South Carolina, potentially leveraging regional expertise in shipbuilding and repair.
The contract duration suggests a comprehensive approach to the vessel's maintenance needs.

Sector Analysis

The shipbuilding 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 vessel maintenance and sustainment. Spending in this sector is often driven by the need to maintain aging fleets and ensure operational readiness. Comparable spending benchmarks would involve analyzing other contracts for similar vessel repairs or maintenance.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. Therefore, the direct impact on small businesses is likely limited unless they are part of a subcontracting chain. Further analysis would be needed to determine if subcontracting opportunities were offered to small businesses.

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 embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases, though detailed operational oversight specifics are generally not public.

Related Government Programs

Naval Vessel Repair Contracts
Shipbuilding and Repair Services
Defense Maintenance and Sustainment
USNS HERSHEL WILLIAMS Operations

Risk Flags

Potential for scope creep if repair requirements are not fully defined upfront.
Contractor performance risk related to quality and timeliness of repairs.
Budgetary risk if unforeseen complexities significantly increase repair costs beyond the fixed price.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to DETYENS SHIPYARDS INC. HALE N104-A2 USNS HERSHEL WILLIAMS PSA

Who is the contractor on this award?

The obligated recipient is DETYENS SHIPYARDS 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 $28.9 million.

What is the period of performance?

Start: 2018-12-21. End: 2019-07-28.

What is the track record of DETYENS SHIPYARDS INC in performing similar naval repair contracts?

DETYENS SHIPYARDS INC, based in South Carolina, has a history of performing ship repair and maintenance services. While specific details on past naval contracts require deeper database searches, their presence in the industry and the award of this contract suggest they possess the necessary capabilities and certifications. Analyzing their past performance ratings, any past performance issues, and the scale of previous similar contracts would provide a clearer picture of their reliability and expertise in executing complex naval repair projects. Their ability to secure this contract under full and open competition indicates they met the government's requirements and were deemed a capable bidder.

How does the awarded amount compare to the estimated value or bids from other competitors?

The awarded amount of $28,892,500.83 was one of two bids received. Without access to the government's cost estimates or the specific value of the other bid, a direct comparison is challenging. However, the fact that it was awarded under full and open competition suggests the price was deemed fair and reasonable by the contracting officer. To assess value more thoroughly, one would need to compare this figure against historical repair costs for similar vessels, the scope of work defined in the contract, and industry benchmarks for ship repair services. The firm fixed-price nature of the contract implies that the awarded amount is intended to cover all costs associated with the defined scope.

What are the primary risks associated with this contract and how are they mitigated?

Key risks include potential cost overruns if unforeseen repair issues arise, delays in project completion impacting the vessel's operational readiness, and quality control failures. Mitigation strategies are embedded within the contract. The firm fixed-price structure shifts some cost risk to the contractor. Performance standards, inspection points, and delivery schedules are defined, allowing the Navy to monitor progress and quality. The contract duration of 219 days provides a timeframe for completion, and penalties for non-performance or liquidated damages may be stipulated. The contractor's experience and the competitive bidding process also serve as risk mitigation factors, suggesting a capable and incentivized party.

How effective is the firm fixed-price contract type in ensuring value for money in ship repair?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for the government when the scope of work is well-defined and unlikely to change significantly. It provides cost certainty and incentivizes the contractor to control costs and improve efficiency to maximize profit. For ship repair, where unforeseen issues can arise, an FFP contract places the burden of managing these uncertainties on the contractor. This can lead to higher initial bid prices to account for risk, but it protects the government from cost overruns. The effectiveness hinges on the thoroughness of the initial scope definition and the contractor's ability to manage risks within the fixed price.

What is the historical spending pattern for the USNS HERSHEL WILLIAMS or similar vessels?

Analyzing historical spending for the USNS HERSHEL WILLIAMS and similar vessels is crucial for context. This specific contract award of approximately $28.9 million represents a significant single investment. To understand patterns, one would examine past repair and maintenance contracts for this vessel, noting their frequency, duration, and cost. Comparing this to spending on other T-AGOS class ships or similar auxiliary support vessels would reveal trends in maintenance costs, the typical lifecycle of repairs, and potential fluctuations in spending based on operational tempo or vessel age. A consistent pattern of high-cost, frequent repairs might indicate aging issues, while sporadic, moderate costs suggest routine maintenance.

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: N3220518R4150

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1670 DRYDOCK AVE # 236, NORTH CHARLESTON, SC, 29405

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

Financial Breakdown

Contract Ceiling: $32,474,177

Exercised Options: $28,892,501

Current Obligation: $28,892,501

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline