Navy awards $37.6M contract for ship overhaul, highlighting shipbuilding and repair sector activity

Contract Overview

Contract Amount: $37,553,619 ($37.6M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2025-02-17

End Date: 2025-09-30

Contract Duration: 225 days

Daily Burn Rate: $166.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USNS MATTHEW PERRY FISCAL YEAR 2025 REGULAR OVERHAUL AND DRY-DOCKING AVAILABILITY

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97217

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $37.6 million to VIGOR MARINE LLC for work described as: USNS MATTHEW PERRY FISCAL YEAR 2025 REGULAR OVERHAUL AND DRY-DOCKING AVAILABILITY Key points: 1. Contract awarded to Vigor Marine LLC for a significant ship overhaul. 2. The contract falls under the shipbuilding and repairing industry, a key defense sector. 3. Full and open competition indicates a potentially competitive bidding process. 4. The firm-fixed-price structure shifts cost risk to the contractor. 5. The duration of 225 days suggests a comprehensive scope of work. 6. The contract is for the fiscal year 2025, indicating forward-looking defense planning.

Value Assessment

Rating: good

The contract value of $37.6 million for a regular overhaul and dry-docking of the USNS MATTHEW PERRY appears reasonable given the scope and duration. Benchmarking against similar naval vessel overhauls suggests that pricing in this specialized sector can vary significantly based on the vessel's condition and the complexity of the required work. Without specific details on the scope of work, a precise value-for-money assessment is challenging, but the firm-fixed-price nature of the contract provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. This approach is generally favored for ensuring fair pricing and access to the widest range of capabilities. The number of bidders is not specified, but the open competition implies a robust market for ship repair services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through competitive pressure and allows for the selection of the most capable and cost-effective provider.

Public Impact

The primary beneficiaries are the U.S. Navy and the Department of Defense, ensuring the operational readiness of naval assets. The services delivered include regular overhaul and dry-docking, crucial for maintaining the structural integrity and operational capability of the USNS MATTHEW PERRY. The geographic impact is likely concentrated in the region where Vigor Marine LLC operates, potentially supporting local economies and maritime industries. This contract supports skilled labor within the shipbuilding and repair sector, including shipyard workers, engineers, and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the overhaul, despite the firm-fixed-price structure.
Dependence on a single contractor for a critical maintenance task could pose a risk if performance issues emerge.
The long duration of the overhaul could impact the operational availability of the vessel if not managed efficiently.

Positive Signals

Awarded through full and open competition, suggesting a competitive market and potential for best value.
Firm-fixed-price contract provides cost certainty for the government.
Contract awarded to Vigor Marine LLC, a known entity in the maritime industry, suggesting established capabilities.

Sector Analysis

The shipbuilding and repairing sector (NAICS 336611) is a critical component of the defense industrial base, providing essential services for maintaining and modernizing naval fleets. This contract represents a typical expenditure within this sector, focusing on the upkeep of an auxiliary vessel. The market is characterized by specialized facilities and skilled labor, with significant government contracts forming a substantial portion of demand. Comparable spending benchmarks would involve analyzing other overhaul and repair contracts for similar naval vessels.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Vigor Marine LLC voluntarily engages small businesses for subcontracted work. Further investigation into subcontracting plans would be needed to assess the broader impact.

Oversight & Accountability

Oversight for this contract will likely 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 delivery of specified services within the agreed-upon price. Transparency is facilitated through contract award announcements and public databases, though detailed performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Vessel Repair and Maintenance
Shipbuilding and Repair Contracts
Defense Logistics Agency Support
Military Sealift Command Operations

Risk Flags

Potential for cost overruns if unforeseen issues arise during overhaul.
Dependence on contractor performance for critical maintenance.
Impact of vessel downtime on operational readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.6 million to VIGOR MARINE LLC. USNS MATTHEW PERRY FISCAL YEAR 2025 REGULAR OVERHAUL AND DRY-DOCKING 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 $37.6 million.

What is the period of performance?

Start: 2025-02-17. End: 2025-09-30.

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

Vigor Marine LLC has a history of performing complex maritime construction and repair services for various government and commercial clients. While specific details on past overhauls of vessels identical to the USNS MATTHEW PERRY are not provided in this data, the company's experience in shipbuilding and repairing, as indicated by its NAICS code and general industry presence, suggests a capacity to handle such projects. A deeper dive into their contract history with the Department of the Navy and other agencies would reveal the scale, complexity, and success rates of their previous overhaul and dry-docking projects. This would include examining past performance reviews, any contract disputes, and the types of vessels they have serviced to better assess their suitability and reliability for this specific contract.

How does the $37.6 million cost compare to similar naval vessel overhauls?

Benchmarking the $37.6 million cost requires comparing it to similar overhaul and dry-docking contracts for auxiliary naval vessels of comparable size and complexity. The duration of 225 days suggests a significant scope of work, likely including structural repairs, system upgrades, and extensive maintenance. Without access to a database of comparable contracts, a precise comparison is difficult. However, major overhauls for naval vessels can range from tens to hundreds of millions of dollars, depending on the vessel's class, age, condition, and the specific work required. The firm-fixed-price nature of this contract provides cost certainty, but the value-for-money assessment hinges on the thoroughness and necessity of the specified work, which is not detailed here.

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

The primary risk with a firm-fixed-price (FFP) contract, while beneficial for cost control, is that the contractor (Vigor Marine LLC) bears the burden of any cost overruns. If unforeseen issues arise during the overhaul and dry-docking of the USNS MATTHEW PERRY that were not adequately scoped or estimated, the contractor might face financial losses. This could potentially lead to pressure to cut corners on quality or scope, impacting the long-term reliability of the vessel, although the contract terms and oversight mechanisms are designed to mitigate this. Conversely, if the contractor significantly underestimates costs, they may be less inclined to perform additional work deemed necessary but not explicitly in the original scope, potentially leading to disputes or a less comprehensive overhaul than desired.

How effective is full and open competition in ensuring optimal pricing for naval repair services?

Full and open competition is generally considered the most effective method for ensuring optimal pricing and value for naval repair services. By allowing all responsible sources to submit bids, the government maximizes the potential for receiving competitive offers, driving down prices and encouraging innovation. This process helps establish a clear market price and reduces the likelihood of paying inflated costs. However, the effectiveness is contingent on the number of capable bidders and the clarity of the solicitation. If the market for specialized naval repair is limited, or if the solicitation is poorly defined, the competitive advantage may be diminished. Nonetheless, it remains the preferred method for achieving best value and taxpayer savings.

What are the historical spending patterns for ship overhaul and repair by the Department of the Navy?

The Department of the Navy historically allocates substantial funding towards the maintenance, repair, and overhaul of its vast fleet. Spending in this category is a consistent and significant portion of the Navy's overall budget, driven by the need to maintain operational readiness across numerous vessels, including aircraft carriers, submarines, destroyers, and auxiliary ships like the USNS MATTHEW PERRY. Annual expenditures can fluctuate based on fleet size, the age of vessels requiring major maintenance cycles, and geopolitical demands. Analyzing historical data reveals consistent demand for ship repair services, with major shipyards and specialized maritime contractors being primary recipients of these funds. The trend generally shows sustained investment in fleet sustainment.

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: N3220524R0260

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC

Address: 5555 N CHANNEL AVE BLDG 71, PORTLAND, OR, 97217

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

Financial Breakdown

Contract Ceiling: $37,981,604

Exercised Options: $37,553,619

Current Obligation: $37,553,619

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline