Vigor Marine LLC awarded $155M for USS MACCAMPBELL depot maintenance, a sole-source contract

Contract Overview

Contract Amount: $155,072,786 ($155.1M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-14

End Date: 2022-04-06

Contract Duration: 569 days

Daily Burn Rate: $272.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS MACCAMPBELL (DDG85) FY 20 DEPOT MAINTENANCE PERIOD (DMP) 0C1

Place of Performance

Location: EVERETT, SNOHOMISH County, WASHINGTON, 98201

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $155.1 million to VIGOR MARINE LLC for work described as: USS MACCAMPBELL (DDG85) FY 20 DEPOT MAINTENANCE PERIOD (DMP) 0C1 Key points: 1. The contract value of $155M for a single vessel's maintenance period represents a significant investment. 2. As a sole-source award, the absence of competition may impact price competitiveness. 3. The duration of 569 days suggests a comprehensive and potentially complex maintenance scope. 4. The firm-fixed-price structure shifts performance risk to the contractor. 5. This contract falls within the broader shipbuilding and repairing sector, crucial for naval readiness.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without comparable sole-source depot maintenance periods for similar vessels. The $155M price tag for a 569-day maintenance period on a single Arleigh Burke-class destroyer (DDG-51) appears substantial. However, the specifics of the required work, including the extent of modernization, repairs, and upgrades, are critical for a definitive value assessment. Without competitive bids, it's difficult to ascertain if this price represents optimal value for the taxpayer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple contractors. This approach is typically used when only one responsible source is available or when a compelling justification exists for avoiding full and open competition. The lack of competition means that price discovery through market forces was bypassed, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not have multiple offers to choose from to ensure the best possible price.

Public Impact

The primary beneficiary is the U.S. Navy, ensuring the operational readiness of the USS MACCAMPBELL (DDG-85). The services delivered include comprehensive depot maintenance, likely encompassing hull repairs, system overhauls, and potential upgrades. The geographic impact is centered around the shipyard performing the work, likely in Washington state given the contractor's location. This contract supports skilled labor within the maritime repair industry, including shipyard workers, technicians, and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Extended duration could indicate unforeseen complexities or potential for cost overruns if not managed tightly.
Lack of transparency in the justification for sole-source award.

Positive Signals

Firm-fixed-price contract shifts risk to the contractor.
Contract awarded to a known entity in the maritime repair sector.
Focus on maintaining a critical naval asset.

Sector Analysis

The shipbuilding and repairing sector is a vital component of the U.S. industrial base, particularly for national defense. This contract falls under the broader category of ship maintenance and repair services, which are essential for maintaining the operational readiness of the U.S. Navy's fleet. The market for naval ship repair is specialized, often dominated by a limited number of firms capable of handling complex maintenance periods for large vessels. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of each vessel's maintenance requirements and the sole-source award.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. As a sole-source award to Vigor Marine LLC, the direct impact on the small business ecosystem is likely minimal unless Vigor Marine itself utilizes small business subcontractors extensively. Further investigation into Vigor Marine's subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a firm-fixed-price contract, oversight would focus on ensuring the contractor meets the defined scope of work within the agreed-upon timeline and budget. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Vessel Maintenance Contracts
Shipbuilding and Repair Services
Department of Defense Depot Maintenance

Risk Flags

Sole-source award may limit price competition.
Lack of detailed scope of work in provided data.
Potential for cost overruns if unforeseen issues arise during maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $155.1 million to VIGOR MARINE LLC. USS MACCAMPBELL (DDG85) FY 20 DEPOT MAINTENANCE PERIOD (DMP) 0C1

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 $155.1 million.

What is the period of performance?

Start: 2020-09-14. End: 2022-04-06.

What is the specific justification for awarding this depot maintenance contract on a sole-source basis?

The provided data indicates the contract was awarded on a sole-source basis ('CT': 'NOT COMPETED'). The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source contracts are justified under circumstances such as only one responsible source being available, or in cases of urgent and compelling need where competition is not feasible. For naval vessel maintenance, justifications might include specialized facilities, unique technical expertise, or the need to maintain continuity with previous maintenance cycles on a specific vessel. Without the official justification document, the precise reasoning remains unknown, but it implies that the Department of the Navy determined that soliciting bids from multiple shipyards was either impractical or not in the government's best interest for this particular maintenance period of the USS MACCAMPBELL.

How does the $155 million cost compare to similar depot maintenance periods for Arleigh Burke-class destroyers?

Direct comparison of the $155 million cost for the USS MACCAMPBELL's FY20 Depot Maintenance Period (DMP) to similar contracts for Arleigh Burke-class destroyers is challenging due to several factors. Firstly, the data indicates this was a sole-source award, meaning competitive pricing benchmarks are absent. Secondly, the scope of work for each DMP can vary significantly, including the extent of hull repairs, system upgrades (e.g., combat systems, propulsion), modernization efforts, and planned obsolescence replacements. The duration of 569 days suggests a comprehensive overhaul. While $155 million is a substantial sum, its value-for-money can only be truly assessed against the specific technical requirements and the market rates for such extensive work, ideally established through a competitive bidding process. Without comparable competitive data, this figure serves as a point of reference but not a definitive benchmark for value.

What are the potential risks associated with a sole-source award for a major vessel maintenance contract?

The primary risk associated with a sole-source award for a major vessel maintenance contract like the one for the USS MACCAMPBELL is the potential for reduced price competition. When only one contractor is considered, the government loses the opportunity to leverage market forces to secure the most competitive pricing. This can lead to higher costs than might be achieved through a competitive bidding process. Other risks include a potential lack of innovation, as the contractor may have less incentive to propose cost-saving efficiencies if they are the only option. Furthermore, the justification for sole-source procurement needs to be robust to ensure that the government is not foregoing opportunities for better value or that the selection is not influenced by factors other than best interest of the government. Ensuring adequate oversight and performance management becomes even more critical in sole-source situations to mitigate these risks.

What is the significance of the firm-fixed-price contract type for this maintenance period?

The firm-fixed-price (FFP) contract type is significant because it places the majority of the financial risk on the contractor, Vigor Marine LLC. Under an FFP contract, the contractor agrees to perform a specified scope of work for a predetermined price. If the contractor's costs exceed the agreed-upon price, they absorb the loss. Conversely, if their costs are lower than anticipated, they retain the profit. This structure incentivizes the contractor to manage costs efficiently and complete the work within the budget. For the government, it provides cost certainty, as the total price is fixed, barring any contract modifications. This is generally advantageous for predictable scopes of work, helping to prevent cost overruns that might occur with cost-reimbursement contracts, especially for a long-duration project like a 569-day depot maintenance period.

How does this contract contribute to the overall readiness and capability of the U.S. Navy's fleet?

This contract is crucial for maintaining the operational readiness and extending the service life of the USS MACCAMPBELL (DDG-85), an Arleigh Burke-class destroyer. Depot Maintenance Periods (DMPs) are comprehensive overhauls designed to address significant wear and tear, perform major repairs, and implement necessary upgrades to combat systems, propulsion, and other critical infrastructure. By ensuring the USS MACCAMPBELL undergoes this extensive maintenance, the Navy can guarantee its ability to perform its assigned missions, whether they involve power projection, maritime security, or humanitarian assistance. The successful completion of this DMP directly contributes to the overall capability and availability of the fleet, ensuring the U.S. Navy can meet its global commitments and maintain its strategic advantage.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N4523A20R0550

Offers Received: 1

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: $157,742,841

Exercised Options: $155,072,786

Current Obligation: $155,072,786

Subaward Activity

Number of Subawards: 211

Total Subaward Amount: $40,848,318

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline