DoD awards $230M for Norfolk Naval Shipyard berth repairs, with AECOM Technical Services leading construction

Contract Overview

Contract Amount: $229,651,456 ($229.7M)

Contractor: AECOM Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-07-29

End Date: 2027-03-29

Contract Duration: 1,704 days

Daily Burn Rate: $134.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DB REPAIR BERTHS 40 AND 41, NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VA

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23709

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $229.7 million to AECOM TECHNICAL SERVICES, INC. for work described as: DB REPAIR BERTHS 40 AND 41, NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VA Key points: 1. Contract value of $229.7M for critical infrastructure upgrades at a major naval facility. 2. AECOM Technical Services, Inc. secured the award, indicating a significant role for established construction firms. 3. The contract duration of approximately 4.5 years suggests a complex and lengthy project timeline. 4. Fixed-price contract type aims to control costs, but potential for change orders exists in large construction projects. 5. The project's focus on essential maritime infrastructure highlights its strategic importance for naval operations. 6. Geographic concentration in Portsmouth, VA, points to localized economic and workforce impacts.

Value Assessment

Rating: good

The contract value of $229.7 million for repairing two berths at Norfolk Naval Shipyard appears substantial, reflecting the scale and complexity of naval infrastructure projects. Benchmarking against similar large-scale maritime construction contracts is challenging without more specific project details. However, the firm-fixed-price structure suggests an effort to establish a clear cost baseline. The duration of nearly five years implies significant work, and the final cost will be a key indicator of value realization. Further analysis would require comparing the scope of work and unit costs to other naval shipyard modernization efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. The presence of three bidders suggests a competitive environment, which typically benefits price discovery and can lead to more favorable terms for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by encouraging a wider range of contractors to submit bids, fostering a more competitive environment.

Public Impact

Naval operations at Norfolk Naval Shipyard will benefit from modernized and repaired berthing facilities, enhancing operational readiness. The project directly supports critical maritime infrastructure essential for naval fleet maintenance and deployment. The geographic impact is concentrated in Portsmouth, Virginia, potentially creating numerous skilled labor jobs in construction and related trades. The successful completion of this project will ensure the continued functionality of a key East Coast naval base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or scope changes arise during the multi-year construction period.
Dependence on a single prime contractor, AECOM Technical Services, Inc., for the entirety of the project's execution.
Risk of schedule delays due to the complexity of shipyard operations and potential coordination challenges with ongoing naval activities.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process and potential for competitive pricing.
Firm-fixed-price contract type provides cost certainty for the government, assuming no significant change orders.
The project addresses essential infrastructure, indicating a clear and necessary government requirement.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on heavy civil and maritime infrastructure. The Department of Defense is a significant client for construction services, particularly for maintaining and upgrading its extensive network of bases and facilities. The market for large-scale naval shipyard construction is specialized, often dominated by a few large firms with the expertise and bonding capacity to handle such complex projects. Spending in this area is driven by military readiness requirements and the need to modernize aging infrastructure.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the substantial value and specialized nature of naval shipyard construction, it is unlikely that small businesses would be the prime contractors. However, AECOM Technical Services, Inc. may engage small businesses as subcontractors for specific trades or services, contributing to the broader small business ecosystem. Further investigation into subcontracting plans would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting officers and project managers, ensuring adherence to specifications and timelines. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency may be enhanced through contract award databases and public reporting requirements. Inspector General involvement is possible if any irregularities or allegations of fraud arise during the contract's lifecycle.

Related Government Programs

Naval Base Infrastructure Modernization
Shipyard Facility Upgrades
Department of Defense Construction Contracts
Maritime Port Facilities
Federal Infrastructure Projects

Risk Flags

Potential for cost growth due to unforeseen site conditions.
Risk of schedule delays in an active operational environment.
Contractor performance monitoring is crucial for project success.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $229.7 million to AECOM TECHNICAL SERVICES, INC.. DB REPAIR BERTHS 40 AND 41, NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VA

Who is the contractor on this award?

The obligated recipient is AECOM TECHNICAL SERVICES, 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 $229.7 million.

What is the period of performance?

Start: 2022-07-29. End: 2027-03-29.

What is the track record of AECOM Technical Services, Inc. with large-scale federal construction projects, particularly within the Department of Defense?

AECOM Technical Services, Inc. has a significant history of performing large-scale federal construction and engineering projects, including numerous contracts with the Department of Defense. They have been involved in various infrastructure development, maintenance, and modernization efforts across military installations. Their portfolio often includes complex projects such as facility construction, environmental remediation, and transportation infrastructure. While specific performance metrics for past DoD contracts are not detailed here, their consistent award of substantial contracts suggests a generally positive track record and the capability to manage projects of this magnitude. A deeper dive into their past performance evaluations and any reported issues on similar projects would provide a more comprehensive understanding of their reliability and expertise.

How does the awarded amount of $229.7 million compare to similar berth repair or naval shipyard construction projects?

The $229.7 million award for repairing two berths at Norfolk Naval Shipyard is a substantial figure, indicative of the complexity and scale typical for major naval infrastructure projects. Benchmarking this against similar contracts requires careful consideration of the scope of work, specific repairs needed (e.g., dredging, structural reinforcement, utility upgrades), and the size and type of berths. Large-scale naval shipyard modernization projects can range from tens of millions to hundreds of millions of dollars. For instance, similar projects at other major naval facilities like Pearl Harbor or San Diego have also commanded significant investments. The firm-fixed-price nature of this contract suggests a defined scope, but the final cost will be the ultimate measure of value. Without direct comparisons of identical scopes, this figure appears consistent with the high costs associated with maintaining and upgrading critical military maritime infrastructure.

What are the primary risks associated with a multi-year, fixed-price contract for shipyard berth repair?

A primary risk with a multi-year, fixed-price contract for shipyard berth repair is the potential for unforeseen site conditions. Shipyard environments, especially older ones, can harbor unexpected subsurface issues, environmental contaminants, or structural problems not fully identified during the initial assessment. If these arise, they can lead to significant change orders, potentially increasing the contract's total cost despite the fixed-price structure. Another risk is schedule slippage; coordinating large-scale construction within an active naval shipyard presents logistical challenges, including potential impacts from ongoing operations, security requirements, and the need for specialized equipment. Contractor performance is also a risk; while AECOM Technical Services, Inc. has a history with such projects, any performance issues could delay critical repairs. Finally, the fixed-price nature, while offering cost certainty, could incentivize the contractor to cut corners on quality if not rigorously overseen, though quality assurance measures are typically in place to mitigate this.

What is the expected program effectiveness and impact on naval readiness from these berth repairs?

The program's effectiveness is directly tied to its ability to enhance naval readiness by ensuring that critical berthing facilities at Norfolk Naval Shipyard are safe, functional, and capable of supporting the fleet. Modernized berths are essential for the efficient docking, maintenance, repair, and deployment of naval vessels. By addressing wear and tear and potentially upgrading capabilities, these repairs will reduce downtime for ships requiring service at this key East Coast facility. Improved infrastructure can also enhance operational efficiency, potentially shortening maintenance cycles and increasing the availability of ships for operational missions. Ultimately, the effectiveness will be measured by the sustained operational capability and reduced logistical bottlenecks for the naval assets that rely on these berths.

How has federal spending on naval shipyard infrastructure evolved over the past five years, and does this contract align with trends?

Federal spending on naval shipyard infrastructure has generally been on an upward trend, driven by the recognized need to modernize aging facilities and ensure the U.S. Navy's global operational readiness. Decades of underinvestment have led to a backlog of maintenance and upgrade requirements across numerous shipyards. Consequently, budgets allocated for shipyard infrastructure, including dry docks, piers, and berthing facilities, have seen increases in recent fiscal years. This $229.7 million contract for berth repairs at Norfolk Naval Shipyard aligns with this trend, representing a significant investment in a critical piece of naval infrastructure. It reflects the government's commitment to addressing these long-standing needs and ensuring that its shipyards can support the modern fleet effectively. The scale of this award suggests it is part of a larger, ongoing effort to upgrade key naval installations.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247017R6016

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 S GRAND AVE STE 1100, LOS ANGELES, CA, 90071

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

Financial Breakdown

Contract Ceiling: $229,651,456

Exercised Options: $229,651,456

Current Obligation: $229,651,456

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $171,467,255

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247019D8022

IDV Type: IDC

Timeline