Vigor Marine LLC awarded $170M contract for USS John Paul Jones repair, a sole-source acquisition

Contract Overview

Contract Amount: $170,151,383 ($170.2M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2022-08-29

End Date: 2024-05-17

Contract Duration: 627 days

Daily Burn Rate: $271.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS JOHN PAUL JONES (DDG53) FY22 DSRA 2C1

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98134

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $170.2 million to VIGOR MARINE LLC for work described as: USS JOHN PAUL JONES (DDG53) FY22 DSRA 2C1 Key points: 1. The contract value represents a significant investment in naval readiness. 2. Sole-source award suggests limited market availability or specific contractor expertise. 3. The duration of the contract (627 days) indicates a complex and extensive repair scope. 4. Fixed-price contract type aims to control costs, but requires careful scope management. 5. The absence of small business set-aside warrants review of subcontracting opportunities. 6. Geographic location in Washington state may impact local economic and workforce contributions.

Value Assessment

Rating: fair

Benchmarking the value of this specific repair contract is challenging without comparable data for the USS John Paul Jones (DDG53) or similar vessels. The fixed-price nature suggests an attempt to control costs, but the lack of competition raises concerns about whether the government secured the best possible price. The awarded amount of $170.15 million for a 627-day repair period needs further analysis against industry standards for ship maintenance and modernization to determine true value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Vigor Marine LLC, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for other reasons. The lack of competition means that the government did not benefit from a competitive bidding process, which could potentially lead to higher prices and less innovation.

Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the absence of multiple bids. The justification for a sole-source award needs to be robust to ensure public funds are used efficiently.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring a key asset is maintained. Services delivered include extensive repairs and maintenance for the USS John Paul Jones (DDG53). The geographic impact is concentrated in Washington state, supporting local maritime industry and skilled labor. Workforce implications include employment for skilled tradespeople in shipbuilding and repair sectors in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of small business set-aside may reduce opportunities for smaller firms in the supply chain.
Extended contract duration could introduce risks related to scope creep or unforeseen cost increases if not managed tightly.

Positive Signals

Fixed-price contract type provides cost certainty for the government, assuming scope is well-defined.
Award to an established shipyard like Vigor Marine LLC suggests access to necessary infrastructure and expertise.
The contract supports critical naval asset maintenance, contributing to national security.

Sector Analysis

The shipbuilding and repairing sector (NAICS 336611) is a critical component of the U.S. industrial base, supporting both commercial and defense needs. This contract falls within the naval ship repair and maintenance sub-sector, which is characterized by specialized facilities, skilled labor, and often long-term relationships with government agencies. The market can be concentrated, with a few large players dominating major repair and overhaul contracts, especially for complex naval vessels.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no explicit small business subcontracting goals were mandated. This means that opportunities for small businesses to participate in this significant contract may be limited unless Vigor Marine LLC voluntarily engages them. Further investigation into Vigor Marine's subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The fixed-price nature of the contract implies that cost oversight is less intensive than cost-plus contracts, focusing more on schedule adherence and quality of work. Transparency regarding the sole-source justification and the specific repair scope would be key areas for public accountability.

Related Government Programs

Naval Ship Repair and Maintenance
Shipbuilding and Repairing
Defense Procurement
Fleet Readiness

Risk Flags

Sole-source award justification requires scrutiny.
Potential for cost overruns on long-duration contracts.
Lack of competitive bidding may impact price fairness.
Need to verify contractor's past performance on similar scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $170.2 million to VIGOR MARINE LLC. USS JOHN PAUL JONES (DDG53) FY22 DSRA 2C1

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 $170.2 million.

What is the period of performance?

Start: 2022-08-29. End: 2024-05-17.

What is Vigor Marine LLC's track record with similar sole-source naval repair contracts?

Vigor Marine LLC has a history of performing complex repair and maintenance work for the U.S. Navy. While specific data on prior sole-source awards of this magnitude for the DDG-51 class destroyers is not detailed here, the company's experience in ship repair is extensive. Analyzing their past performance on similar contracts, including any issues related to cost overruns, schedule delays, or quality deficiencies, would provide crucial context for assessing the risk associated with this current award. Their established presence and facilities in the Pacific Northwest suggest a capacity to handle such large-scale projects, but a deeper dive into their performance metrics on comparable contracts is warranted.

How does the $170.15 million cost compare to typical repair costs for a DDG-51 class destroyer?

Determining a precise benchmark for DDG-51 class destroyer repair costs is complex, as it depends heavily on the scope of work, the specific class variant, and the shipyard's location and overhead. However, major overhauls and modernization efforts for Arleigh Burke-class destroyers can range from tens of millions to well over $100 million. The $170.15 million figure for a 627-day repair period suggests a substantial scope, potentially including significant upgrades or extensive structural work beyond routine maintenance. Without a detailed breakdown of the work items included in this contract, a direct comparison to market rates or other similar contracts is difficult, but the amount is substantial and indicative of a major availability period.

What are the primary risks associated with a sole-source award for a major ship repair contract?

The primary risk associated with a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible value for its money. Other risks include a potential reduction in innovation, as the contractor may have less incentive to propose cost-saving efficiencies or novel solutions. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process. For a critical service like naval ship repair, ensuring the justification for sole-sourcing is robust and that the awarded price is fair and reasonable through independent cost analysis is paramount to mitigate these risks.

What is the expected impact of this contract on the USS John Paul Jones's operational readiness?

This contract is directly aimed at enhancing the operational readiness of the USS John Paul Jones (DDG53). By undertaking extensive repairs and maintenance over a 627-day period, the Navy intends to ensure the vessel is fully functional, modernized, and capable of fulfilling its mission requirements. The successful and timely completion of this work will bring the ship back into active service with improved reliability and potentially upgraded systems, thereby contributing to the overall strength and readiness of the U.S. Pacific Fleet. Delays or deficiencies in the repair work could negatively impact readiness timelines.

How does historical spending on ship repair and maintenance for the Navy compare to this contract's value?

The Department of the Navy consistently allocates billions of dollars annually towards ship maintenance, repair, and modernization. Individual major repair availabilities for destroyers and cruisers often fall within the tens to hundreds of millions of dollars, depending on the scope. This $170.15 million contract for the USS John Paul Jones is within the expected range for a significant availability for a guided-missile destroyer. However, tracking the Navy's total spending on ship repair over time, and analyzing trends in contract values, competition levels, and cost growth for similar vessels, would provide a broader context for assessing the efficiency and effectiveness of this specific award within the larger budgetary picture.

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: N4523A22R0551

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC

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: $170,197,005

Exercised Options: $170,151,383

Current Obligation: $170,151,383

Actual Outlays: $114,336,495

Subaward Activity

Number of Subawards: 85

Total Subaward Amount: $38,213,086

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline