DoD's $66.8M engineering services contract awarded to American Bureau of Shipping for regulatory support

Contract Overview

Contract Amount: $66,822,250 ($66.8M)

Contractor: American Bureau of Shipping

Awarding Agency: Department of Defense

Start Date: 2022-04-01

End Date: 2026-03-31

Contract Duration: 1,460 days

Daily Burn Rate: $45.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: N102C/N7 T.LEWIS ABS REGULATORY SERVICES

Place of Performance

Location: SPRING, HARRIS County, TEXAS, 77389

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $66.8 million to AMERICAN BUREAU OF SHIPPING for work described as: N102C/N7 T.LEWIS ABS REGULATORY SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Firm Fixed Price contract type suggests cost certainty for the government. 3. Contract duration of 1460 days indicates a long-term need for these services. 4. Services are categorized under Engineering Services, a broad but critical sector. 5. The contract is managed by the Department of the Navy, a major DoD component. 6. Texas is the place of performance, potentially benefiting the local economy.

Value Assessment

Rating: fair

The contract's value of $66.8 million over approximately four years for engineering services requires careful benchmarking. Without specific deliverables or performance metrics, it's challenging to definitively assess value for money. The firm fixed-price structure provides cost predictability, but the lack of competition raises concerns about whether the government secured the most advantageous pricing. Comparing this to similar sole-source engineering contracts within the DoD or other agencies would be necessary for a more robust assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or qualifications required for the service. While this ensures a specific need is met, it significantly limits price discovery and potentially leads to higher costs for the government compared to a fully competed contract. The absence of a competitive bidding process means taxpayers do not benefit from the cost savings that competition often drives.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no competitive pressure to lower bids.

Public Impact

The Department of the Navy benefits from specialized regulatory engineering services. Ensures compliance with relevant regulations for naval operations and assets. Services are performed in Texas, potentially supporting the regional workforce. The contract supports critical engineering functions within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of detailed performance metrics makes value assessment difficult.
Engineering services are broad; specific scope and deliverables are not detailed here.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Long contract duration suggests a stable, ongoing requirement.
Award to a known entity (American Bureau of Shipping) may indicate specialized expertise.

Sector Analysis

The engineering services sector is vast, encompassing a wide range of specialized expertise. This contract falls within the broader professional, scientific, and technical services industry. The Department of Defense is a significant consumer of engineering services, utilizing them for design, analysis, testing, and regulatory compliance across its numerous platforms and facilities. Benchmarking this contract's value would require comparing it to similar sole-source or competed engineering support contracts within the defense industrial base, considering the specific nature of the regulatory support provided.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the likely specialized expertise required, it is improbable that significant subcontracting opportunities for small businesses would be mandated or readily available unless specified by the prime contractor. Further investigation into the prime contractor's subcontracting plan would be needed to assess any potential impact on the small business ecosystem.

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. Transparency regarding specific performance metrics and deliverables would be key to assessing accountability. The potential for an Inspector General review exists, particularly if performance issues or allegations of impropriety arise.

Related Government Programs

Naval Engineering Support Services
Defense Regulatory Compliance Contracts
Professional and Technical Services for DoD
Maritime Engineering Services

Risk Flags

Sole-source award
Lack of detailed scope of work
Potential for uncompetitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.8 million to AMERICAN BUREAU OF SHIPPING. N102C/N7 T.LEWIS ABS REGULATORY SERVICES

Who is the contractor on this award?

The obligated recipient is AMERICAN BUREAU OF SHIPPING.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $66.8 million.

What is the period of performance?

Start: 2022-04-01. End: 2026-03-31.

What is the specific nature of the 'regulatory services' provided under this contract?

The provided data indicates the contract is for 'Engineering Services' with the North American Industry Classification System (NAICS) code 541330. While the contractor is 'AMERICAN BUREAU OF SHIPPING', known for maritime classification and technical services, the exact nature of the 'regulatory services' for the Department of the Navy is not detailed. These could range from ensuring compliance with maritime safety regulations, environmental standards, or specific naval operational requirements. Further details on the Statement of Work (SOW) would clarify the precise regulatory domains covered and the specific engineering analyses or certifications required.

How does the $66.8 million contract value compare to similar sole-source engineering contracts within the Department of the Navy?

Benchmarking this $66.8 million contract against similar sole-source engineering services contracts within the Department of the Navy is challenging without more specific details on the scope of work and deliverables. However, for a four-year period (approximately 1460 days), this value suggests a significant, ongoing requirement for specialized engineering expertise. Sole-source awards inherently lack the price competition that typically drives down costs. To assess value, one would need to compare the hourly rates, total contract value, and the criticality of the services against other sole-source contracts for comparable engineering support, considering factors like contractor overhead, profit margins, and the uniqueness of the required skills.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk of a sole-source award for a $66.8 million contract is the potential for inflated pricing due to the absence of competitive bidding. Without competing offers, the government may not be securing the most cost-effective solution. Other risks include vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility or innovation. There's also a risk that the sole-source justification might not be as robust as initially assessed, or that alternative solutions could have been viable if competition had been pursued. Ensuring rigorous oversight and performance management becomes even more critical in sole-source situations.

What is the track record of American Bureau of Shipping in performing similar engineering and regulatory services for the federal government?

American Bureau of Shipping (ABS) is a well-established entity, particularly known for its work in the maritime industry, including classification, certification, and technical consulting for vessels and offshore structures. While their primary focus is maritime, their expertise in engineering analysis, risk assessment, and regulatory compliance is transferable. Their track record with the federal government, specifically the Department of Defense, would need to be examined through contract databases and performance reviews. Past performance information, if available, would indicate their reliability, quality of service, and ability to meet government requirements, especially in complex regulatory environments.

How does the firm fixed-price (FFP) contract type mitigate or exacerbate risks for this sole-source award?

The Firm Fixed Price (FFP) contract type is generally advantageous for the government as it shifts the risk of cost overruns to the contractor. This means the total price is fixed, providing budget certainty. For this sole-source award, FFP is beneficial because it locks in the price, preventing potential cost increases that might occur if the contract were cost-reimbursable. However, it does not mitigate the risk of paying a higher-than-market price due to the lack of competition. The contractor bears the risk of performing the work within the agreed-upon fixed price, which could incentivize efficiency but also potentially lead to corners being cut if not adequately monitored.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N3220522R4029

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1701 CITY PLAZA DR, SPRING, TX, 77389

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

Financial Breakdown

Contract Ceiling: $98,385,173

Exercised Options: $66,822,250

Current Obligation: $66,822,250

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline