DoD's $44M Ship Repair Contract with Perma-Fix Faces Scrutiny for Value and Competition
Contract Overview
Contract Amount: $43,998,836 ($44.0M)
Contractor: Perma-Fix Environmental Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-09-20
End Date: 2024-03-19
Contract Duration: 911 days
Daily Burn Rate: $48.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EX-MCKEE - ARTICLE 520 RELEASE
Place of Performance
Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23709
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $44.0 million to PERMA-FIX ENVIRONMENTAL SERVICES, INC. for work described as: EX-MCKEE - ARTICLE 520 RELEASE Key points: 1. The contract awarded to Perma-Fix Environmental Services, Inc. for ship building and repair is substantial at $43.99M. 2. While labeled 'Full and Open Competition', the limited number of bids (1) raises questions about effective price discovery. 3. The contract duration of 911 days suggests a long-term commitment, increasing potential risk if performance issues arise. 4. The sector is Ship Building and Repair, a critical but often complex area for defense spending.
Value Assessment
Rating: questionable
The contract's value of $43.99M for ship repair needs further benchmarking against similar definitive contracts awarded under full and open competition. The single bid received is a significant concern regarding potential overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition,' but only one bid was received. This limited competition may have hindered effective price discovery and potentially led to a less competitive price than could have been achieved with more bidders.
Taxpayer Impact: The potential for a non-competitive price impacts taxpayer value, as the government may have paid more than necessary for the services rendered.
Public Impact
Taxpayers may be overpaying due to limited competition in this significant defense contract. The long duration of the contract increases the risk of cost overruns or performance issues impacting naval readiness. Transparency in the bidding process for defense contracts is crucial for ensuring fair pricing and efficient use of public funds.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (1 bid)
- Long contract duration
- Potential for non-competitive pricing
Positive Signals
- Awarded under Full and Open Competition framework
- Definitive contract provides clear scope
Sector Analysis
The Ship Building and Repair sector (NAICS 336611) is vital for national defense but can be prone to complex cost structures and specialized labor requirements. Benchmarking against similar contracts is essential to ensure fair pricing.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis is needed to determine if opportunities for small business participation were missed.
Oversight & Accountability
The award of a large definitive contract with limited competition warrants close oversight to ensure adherence to terms, performance standards, and fair pricing throughout its duration.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Limited competition (1 bid)
- Potential for non-competitive pricing
- Long contract duration increases risk
- Lack of small business participation noted
- Need for detailed cost benchmarking
Tags
ship-building-and-repairing, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.0 million to PERMA-FIX ENVIRONMENTAL SERVICES, INC.. EX-MCKEE - ARTICLE 520 RELEASE
Who is the contractor on this award?
The obligated recipient is PERMA-FIX ENVIRONMENTAL 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 $44.0 million.
What is the period of performance?
Start: 2021-09-20. End: 2024-03-19.
What was the rationale for only one bid being submitted under a 'Full and Open Competition' solicitation for this ship repair contract?
The limited number of bids could stem from various factors, including the highly specialized nature of the required services, stringent pre-qualification criteria, the geographic location of the work, or a lack of awareness among potential bidders. Understanding the specific solicitation requirements and market conditions at the time of award is crucial to determining the precise reasons for the low bid count.
How does the awarded price of $43.99M compare to industry benchmarks for similar ship repair services, considering the contract's duration and scope?
Without specific details on the scope of work and the exact services rendered, a precise benchmark is difficult. However, a $44M contract for ship repair over nearly three years is substantial. A comparative analysis with other definitive contracts for similar vessel classes and repair types, particularly those awarded under more competitive conditions, is necessary to assess if this price represents good value for the taxpayer.
What mechanisms are in place to ensure effective performance and cost control given the contract's long duration and the potential for unforeseen issues in ship repair?
Effective oversight typically involves regular progress reviews, milestone-based payments, clear performance metrics, and defined procedures for change orders and dispute resolution. For long-duration contracts, robust contract management by the Department of the Navy is critical to monitor progress, manage risks, and ensure that the contractor meets all performance obligations within the agreed-upon budget.
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: N4215821R0003
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 8302 DUNWOODY PL STE 250, ATLANTA, GA, 30350
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $43,998,836
Exercised Options: $43,998,836
Current Obligation: $43,998,836
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-09-20
Current End Date: 2024-03-19
Potential End Date: 2024-03-19 00:00:00
Last Modified: 2023-11-17
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