DoD's $28.1M contract for ship maintenance awarded to Vigor Marine LLC shows fair value with a competitive bidding process

Contract Overview

Contract Amount: $28,128,958 ($28.1M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2023-01-08

End Date: 2024-07-26

Contract Duration: 565 days

Daily Burn Rate: $49.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: N104A1 / PM1 / B.PAGE / USNS HENRY J. KAISER MID-TERM AVAILABILITY /

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97217

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $28.1 million to VIGOR MARINE LLC for work described as: N104A1 / PM1 / B.PAGE / USNS HENRY J. KAISER MID-TERM AVAILABILITY / Key points: 1. The contract's value appears reasonable when benchmarked against similar mid-term availability services for naval vessels. 2. Full and open competition after exclusion of sources suggests a deliberate selection process, potentially balancing specialized needs with broad market access. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. The duration of 565 days indicates a significant scope of work, likely encompassing extensive maintenance and repair activities. 5. This contract aligns with the Navy's ongoing efforts to maintain fleet readiness and operational capability. 6. The award to Vigor Marine LLC, a known entity in the maritime sector, suggests a degree of confidence in their technical and logistical capabilities.

Value Assessment

Rating: good

The contract value of approximately $28.1 million for a 565-day period of performance for mid-term availability of the USNS HENRY J. KAISER appears to be within a reasonable range for complex ship maintenance. Benchmarking against similar contracts for naval vessel availability, which can range from tens to hundreds of millions depending on the vessel class and scope of work, suggests this award is competitive. The firm-fixed-price contract type further supports value by shifting cost risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific criteria or circumstances led to the exclusion of certain potential bidders. The exact number of bidders is not specified, but the 'limited' nature suggests that not all potential sources were considered, which could impact price discovery compared to a truly unrestricted full and open competition.

Taxpayer Impact: While the competition was not fully unrestricted, the process aimed to ensure a qualified contractor was selected. Taxpayers benefit from a competitive process that, even with exclusions, seeks to secure fair pricing and quality service for essential naval maintenance.

Public Impact

The primary beneficiaries are the U.S. Navy and the Department of Defense, ensuring the operational readiness of the USNS HENRY J. KAISER. The services delivered include critical maintenance, repair, and modernization activities necessary for the vessel's continued service. The geographic impact is centered around the vessel's operational area and the contractor's facilities, likely in Oregon given the contractor's location. The contract supports skilled labor within the maritime repair and shipbuilding industry, contributing to the workforce in the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to 'exclusion of sources' could lead to less aggressive pricing than a fully open bid.
The long duration (565 days) increases the risk of unforeseen technical challenges or material cost fluctuations impacting the fixed price.
Reliance on a single contractor for such a critical and lengthy availability period concentrates risk.

Positive Signals

Firm-fixed-price contract structure effectively caps the government's financial exposure.
Award to an established marine services provider like Vigor Marine suggests a high likelihood of successful execution.
The contract aims to ensure fleet readiness, a critical national security objective.

Sector Analysis

The Ship Building and Repairing sector (NAICS 336611) is a vital component of the defense industrial base, supporting naval operations and national security. This contract falls within the broader category of government contracting for vessel maintenance and sustainment. Spending in this sector is often characterized by large, complex projects requiring specialized facilities and expertise. Comparable spending benchmarks are difficult to establish precisely without knowing the specific class of vessel and the exact scope of work, but major overhauls and availabilities can represent significant investments.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. This suggests the primary focus was on securing the necessary technical capabilities and capacity for a large-scale ship availability. There is no explicit information on subcontracting plans for small businesses, but given the nature of large shipbuilding and repair contracts, there is often an indirect benefit to the small business ecosystem through the supply chain.

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 firm-fixed-price contract terms, requiring the contractor to meet specific performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Vessel Maintenance Contracts
Ship Repair and Conversion Services
Defense Readiness Contracts
Maritime Logistics Support
Fleet Sustainment Programs

Risk Flags

Potential for limited competition due to source exclusions.
Long contract duration increases risk of unforeseen issues.
Firm-fixed-price risk concentrated on contractor for extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.1 million to VIGOR MARINE LLC. N104A1 / PM1 / B.PAGE / USNS HENRY J. KAISER MID-TERM AVAILABILITY /

Who is the contractor on this award?

The obligated recipient is VIGOR MARINE 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 $28.1 million.

What is the period of performance?

Start: 2023-01-08. End: 2024-07-26.

What is Vigor Marine LLC's track record with similar naval contracts?

Vigor Marine LLC has a significant history of performing complex repair, maintenance, and overhaul services for various naval and commercial vessels. Their experience includes work on different classes of ships, often involving extensive dry-docking, hull work, propulsion system overhauls, and modernization efforts. While specific details on past performance metrics for similar 'mid-term availability' contracts are not publicly detailed in this summary, their established presence in the industry suggests a capacity to handle such demanding projects. Past performance is a critical factor in the source selection process for these types of awards, and Vigor's continued success in securing such contracts implies a generally positive track record with the Department of Defense and other maritime clients.

How does the $28.1 million cost compare to industry benchmarks for similar ship maintenance?

Benchmarking the $28.1 million cost for the USNS HENRY J. KAISER's mid-term availability requires understanding the specific scope of work, vessel class, and duration (565 days). Naval ship maintenance contracts can vary dramatically. For a vessel of this type, undergoing significant availability, this figure appears to be within a reasonable range, especially considering the firm-fixed-price nature which often includes contingency. Comparable contracts for major availabilities or overhauls of similar-sized support vessels can range from tens of millions to over a hundred million dollars, depending on the complexity of systems requiring repair or upgrade. Without a detailed breakdown of the work items, a precise comparison is challenging, but the value seems aligned with industry expectations for substantial fleet maintenance.

What are the primary risks associated with this firm-fixed-price contract?

The primary risk with a firm-fixed-price (FFP) contract, particularly for a long-duration project like this 565-day availability, lies with the contractor (Vigor Marine LLC). If unforeseen technical issues arise, material costs escalate significantly beyond projections, or labor productivity decreases, Vigor Marine bears the financial burden of cost overruns. For the government, the risk is primarily related to potential contractor default or performance deficiencies, which could lead to delays and necessitate finding an alternative solution, potentially at a higher cost. However, the FFP structure is designed to provide cost certainty to the government, making it a preferred contract type when the scope of work is well-defined and risks can be reasonably estimated.

How effective is the 'Full and Open Competition After Exclusion of Sources' in ensuring value for taxpayers?

The 'Full and Open Competition After Exclusion of Sources' aims to balance broad market access with specific requirements. While not as competitive as unrestricted 'Full and Open Competition,' it suggests that the initial pool of potential bidders was assessed, and certain sources were excluded based on predefined criteria (e.g., capability, past performance, security). This process can still yield good value for taxpayers if the remaining pool of bidders is sufficiently competitive and the exclusions were justified. It prevents awarding the contract to unqualified bidders while still allowing multiple capable firms to compete. The effectiveness hinges on the justification for exclusions and the number of responsive, capable bidders that ultimately submit proposals.

What is the historical spending pattern for the USNS HENRY J. KAISER's maintenance?

Analyzing historical spending patterns for the USNS HENRY J. KAISER requires access to detailed contract databases beyond this single award. Typically, naval vessels undergo periodic maintenance availabilities, including routine dockside services, intermediate-level repairs, and major overhauls or modernization efforts at longer intervals. The frequency and cost of these events depend on the vessel's operational tempo, age, and specific mission requirements. A 'mid-term availability' suggests a scheduled, significant maintenance event between major overhauls. Without prior data, it's difficult to establish a trend, but consistent investment in maintenance is crucial for extending the service life and ensuring the reliability of support vessels like the USNS HENRY J. KAISER.

What are the implications of the 565-day duration on the contract's risk profile?

A 565-day duration (approximately 1.5 years) for a ship availability contract significantly elevates the risk profile compared to shorter-term maintenance. This extended period increases the likelihood of encountering unforeseen technical challenges, requiring complex repairs, or dealing with supply chain disruptions for specialized parts. For a firm-fixed-price contract, this extended timeline means Vigor Marine LLC must meticulously manage its resources, labor, and material procurement over a prolonged period. Market fluctuations in material costs, labor availability, and potential changes in regulatory requirements during the contract's execution pose additional risks that the contractor must absorb under the FFP terms. This duration underscores the substantial nature of the maintenance being performed.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3220523R4226

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC

Address: 5555 N CHANNEL AVE, PORTLAND, OR, 97217

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $29,902,313

Exercised Options: $28,128,958

Current Obligation: $28,128,958

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $5,318,928

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline