Department of Defense awards $60.8M contract for ship repair to Vigor Marine LLC

Contract Overview

Contract Amount: $60,799,567 ($60.8M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2022-07-18

End Date: 2023-05-05

Contract Duration: 291 days

Daily Burn Rate: $208.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SHIP REPAIR

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $60.8 million to VIGOR MARINE LLC for work described as: SHIP REPAIR Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Firm Fixed Price, which shifts risk to the contractor. 3. Delivery order awarded for ship repair services, indicating a specific need within the Navy. 4. The duration of 291 days suggests a significant scope of work for the repair. 5. The award was made to a single contractor, Vigor Marine LLC. 6. The contract is for ship repair, a critical component of naval readiness.

Value Assessment

Rating: good

The contract value of approximately $60.8 million for ship repair services appears reasonable given the scope and duration. Without specific details on the type and extent of repairs, a direct comparison to similar contracts is challenging. However, the firm fixed-price nature of the award suggests that the government has secured a defined cost for the services, which is generally favorable for value. The presence of two bids indicates some level of market interest and potential for competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. Two bids were received, indicating a moderate level of competition for this specific requirement. While two bidders is better than one, a higher number of bidders could potentially lead to more aggressive pricing and a wider range of solutions.

Taxpayer Impact: The full and open competition, despite receiving only two bids, provides some assurance that taxpayer funds were used efficiently by allowing multiple companies to vie for the contract. This process helps to ensure that the selected contractor offers a competitive price.

Public Impact

Naval operations in the Pacific region benefit from the readiness of the fleet. The contract supports the maintenance and repair of critical naval assets. The services are delivered in Hawaii, impacting the local economy and workforce. Skilled labor in the shipbuilding and repair industry is utilized for this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bids received could potentially lead to higher costs than if more bidders participated.
The specific nature of ship repair can involve unforeseen complexities that may impact cost and schedule, even with a fixed-price contract.

Positive Signals

Firm Fixed Price contract structure transfers cost overrun risk to the contractor.
Awarded under Full and Open Competition, allowing for broad market participation.
The contract supports a critical defense need for naval readiness.

Sector Analysis

The ship repair industry is a vital segment of the broader maritime and defense industrial base. This contract falls within the Ship Building and Repairing sector, which is characterized by specialized labor, significant capital investment, and stringent quality requirements. The Department of Defense is a major customer for ship repair services, with spending often driven by fleet maintenance schedules and operational demands. Comparable spending benchmarks would typically involve analyzing the cost of similar repair projects across different naval vessels and shipyards.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. The award to Vigor Marine LLC, a significant player in the maritime industry, suggests it is likely a large business. Subcontracting opportunities for small businesses may arise, but this would depend on Vigor Marine's internal procurement strategies and the specific needs of the repair work.

Oversight & Accountability

The Department of the Navy, under the Department of Defense, is responsible for overseeing this contract. Oversight mechanisms would typically include contract administration, performance monitoring, and quality assurance checks to ensure the repairs meet specifications. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair
Defense Logistics Agency Contracts
Shipbuilding and Repair Services

Risk Flags

Limited competition (2 bidders)
Potential for cost overruns impacting contractor profitability
Ensuring quality standards are met for critical naval assets

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.8 million to VIGOR MARINE LLC. SHIP REPAIR

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 $60.8 million.

What is the period of performance?

Start: 2022-07-18. End: 2023-05-05.

What is Vigor Marine LLC's track record with the Department of Defense for ship repair contracts?

Vigor Marine LLC has a history of securing contracts with the Department of Defense, particularly for ship repair and maintenance services. Analyzing their past performance on similar contracts would involve reviewing award data, contract values, and any reported performance issues or successes. Their ability to win this $60.8 million contract suggests a demonstrated capability and competitive positioning within the defense shipbuilding and repair sector. Further investigation into their specific experience with the types of vessels and repairs covered by this award would provide a more comprehensive understanding of their suitability and track record.

How does the $60.8 million award compare to typical ship repair contract values for the Navy?

The $60.8 million value for this ship repair contract is substantial and falls within the range of significant repair and maintenance projects undertaken by the Department of the Navy. Typical contract values can vary widely depending on the size and class of the vessel, the complexity of the required repairs (e.g., hull work, propulsion system overhauls, modernization), and the duration of the contract. Larger naval vessels or those undergoing major overhauls can easily command contracts in the tens or even hundreds of millions of dollars. This award suggests a significant scope of work, likely involving extensive repairs or upgrades to a naval vessel.

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

The primary risks associated with this firm-fixed-price ship repair contract are largely borne by the contractor, Vigor Marine LLC. However, risks to the government can still exist. For the contractor, the main risk is cost overruns if the scope of work is underestimated or unforeseen issues arise during the repair process, potentially impacting their profit margin or even leading to losses. For the government, risks include potential delays if the contractor struggles to meet deadlines, quality issues if repairs are not performed to standard, and the possibility that the fixed price may not represent the absolute lowest cost achievable if competition had been more robust. Ensuring thorough inspection and acceptance protocols are in place is crucial for mitigating government risks.

How effective is full and open competition in ensuring value for money in ship repair contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in ship repair contracts. By allowing all responsible sources to bid, it fosters a competitive environment that incentivizes contractors to offer their best pricing and most efficient solutions. The presence of multiple bidders typically drives down prices and encourages innovation. However, the effectiveness is contingent on the number of capable bidders and the clarity of the solicitation. In this case, with only two bids received, the competitive pressure might have been less intense than in a scenario with numerous bidders, potentially impacting the degree of price discovery and overall value maximization.

What is the historical spending pattern for ship repair by the Department of the Navy?

The Department of the Navy consistently allocates significant funding towards ship repair and maintenance as a critical component of maintaining fleet readiness. Historical spending patterns reveal a substantial and ongoing investment in this area, driven by the operational tempo, aging fleet, and modernization requirements. Annual spending can fluctuate based on major maintenance cycles, new ship construction deliveries, and strategic defense priorities. Analyzing historical data would show trends in contract awards, average contract values, and the distribution of spending across different ship classes and repair facilities. This contract represents a portion of that consistent, large-scale investment.

What are the implications of awarding a delivery order for ship repair services?

Awarding a delivery order for ship repair services signifies that this contract is likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle that allows for the issuance of specific task orders. This approach provides flexibility for the Navy to procure repair services as needed, rather than committing to a single large contract upfront. For Vigor Marine LLC, it means they have secured a significant piece of work under an existing agreement. The implications include a defined scope and timeline for this specific repair task, with payment tied to the successful completion of the work outlined in the delivery order. It also suggests that the Navy has a pre-established relationship or framework with the contractor for such services.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002419R4442

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Carlyle Group Management L.L.C.

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

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

Financial Breakdown

Contract Ceiling: $60,844,675

Exercised Options: $60,799,567

Current Obligation: $60,799,567

Actual Outlays: $8,243,376

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002420D4442

IDV Type: IDC

Timeline