Vigor Marine LLC awarded $39M for USS Gridley (DDG 101) FY23 SRA, highlighting ship maintenance needs

Contract Overview

Contract Amount: $39,091,750 ($39.1M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2023-02-13

End Date: 2023-10-30

Contract Duration: 259 days

Daily Burn Rate: $150.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS GRIDLEY (DDG 101) FY23 SRA

Place of Performance

Location: EVERETT, SNOHOMISH County, WASHINGTON, 98207

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $39.1 million to VIGOR MARINE LLC for work described as: USS GRIDLEY (DDG 101) FY23 SRA Key points: 1. Contract value of $39.1M for ship repair services indicates significant investment in naval asset upkeep. 2. The award to Vigor Marine LLC suggests a competitive landscape for major naval maintenance contracts. 3. A firm-fixed-price contract type aims to control costs and provide predictability for the Navy. 4. The duration of 259 days points to a substantial scope of work for the USS Gridley. 5. This contract falls under the Ship Building and Repairing NAICS code, a critical sector for defense readiness.

Value Assessment

Rating: good

The contract value of $39.1 million for the USS Gridley's FY23 SRA appears reasonable given the complexity of modern naval vessel maintenance. Benchmarking against similar Service Life Extension Programs (SLEPs) or major overhauls for Arleigh Burke-class destroyers would provide a more precise value assessment. However, the firm-fixed-price nature of the contract suggests an effort to lock in costs, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of 4 bidders suggests a healthy level of competition for this significant naval maintenance contract. This competitive process is expected to drive more favorable pricing and service offerings for the Department of the Navy.

Taxpayer Impact: Full and open competition generally leads to better value for taxpayers by ensuring that the government receives the most competitive pricing and highest quality services available in the market.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the USS Gridley is maintained to high standards. Services delivered include extensive repair and maintenance work critical for the ship's operational lifespan. The geographic impact is centered around the contractor's facility in Washington state, supporting regional maritime industrial capabilities. Workforce implications include skilled labor in shipbuilding and repair, contributing to specialized employment in the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise beyond the scope of the firm-fixed-price contract.
Dependence on a single contractor for a critical asset's maintenance could pose risks if performance falters.

Positive Signals

Firm-fixed-price contract structure provides cost certainty for the government.
Full and open competition suggests a robust bidding process leading to potentially better value.
Award to an established entity like Vigor Marine LLC implies a degree of proven capability.

Sector Analysis

The shipbuilding and repairing sector is a vital component of the defense industrial base, supporting the maintenance and modernization of naval fleets. This contract represents a significant investment within this specialized market, which is characterized by high barriers to entry, complex technical requirements, and substantial capital investment. Comparable spending benchmarks would involve other major overhaul and repair contracts for naval vessels of similar class and complexity.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have specific small business set-aside provisions. While the prime contractor, Vigor Marine LLC, is a significant entity, the subcontracting opportunities generated by this award could potentially benefit small businesses within the maritime repair and supply chain. Further analysis of subcontracting plans would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms for major repair and maintenance contracts. Accountability is managed through contract performance monitoring, milestone reviews, and adherence to the firm-fixed-price agreement. Transparency is facilitated through contract award databases, though detailed performance metrics are typically internal to the agency. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Ship Repair and Overhaul Services
Arleigh Burke-class Destroyer Maintenance
Defense Contract Management Agency (DCMA) Oversight

Risk Flags

Potential for scope creep in complex repair contracts.
Dependence on contractor performance for critical asset availability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.1 million to VIGOR MARINE LLC. USS GRIDLEY (DDG 101) FY23 SRA

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 $39.1 million.

What is the period of performance?

Start: 2023-02-13. End: 2023-10-30.

What is Vigor Marine LLC's track record with similar naval vessel repair contracts?

Vigor Marine LLC has a history of performing complex repair and maintenance work on naval vessels. While specific details on past contracts for Arleigh Burke-class destroyers would require deeper database searches, their experience in ship repair is generally recognized. The company has been involved in various naval contracts, including dry dockings, hull repairs, and system upgrades. Assessing their performance on previous, similar contracts would involve reviewing past performance evaluations and any documented issues or commendations to gauge their reliability and quality of work for this specific USS Gridley award.

How does the $39.1 million award compare to the average cost of similar ship repair contracts?

Benchmarking the $39.1 million award for the USS Gridley's FY23 SRA requires comparison with similar Service Life Extension Programs (SLEPs) or major maintenance availabilities for Arleigh Burke-class destroyers. These types of complex overhauls can range significantly based on the specific scope of work, the condition of the vessel, and the shipyard's overhead. Generally, major overhauls for destroyers can fall within the tens of millions to over $100 million. The firm-fixed-price nature of this contract suggests an effort to control costs, and without detailed scope comparison, it appears within a plausible range for a significant mid-life availability.

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

The primary risk with a firm-fixed-price contract for complex ship repair, like the USS Gridley's SRA, is the potential for unforeseen issues arising during the maintenance period that were not fully anticipated in the initial scope. If significant structural damage, system failures, or required upgrades are discovered that fall outside the defined contract scope, the government may face difficult decisions regarding change orders, which could increase the total cost. Contractor performance risk also exists, where delays or quality issues could impact the Navy's operational schedule. However, the fixed price incentivizes the contractor to manage their own costs and risks efficiently.

How effective is the full and open competition process in ensuring value for this type of defense contract?

The full and open competition process is generally considered highly effective in ensuring value for defense contracts of this magnitude. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation in service delivery. The fact that four bidders participated suggests a robust market for these services. This competition allows the Department of the Navy to select the offer that provides the best overall value, considering not only price but also technical approach, past performance, and schedule. This process minimizes the risk of awarding a contract at an inflated price due to lack of alternatives.

What is the historical spending trend for USS Gridley maintenance or similar destroyer availabilities?

Historical spending for USS Gridley maintenance and similar destroyer availabilities would likely show a cyclical pattern of significant investments during major availabilities (like SRAs or SLEPs) interspersed with routine maintenance costs. Major overhauls for Arleigh Burke-class destroyers typically occur every few years and represent substantial capital outlays, often in the tens of millions of dollars. Tracking year-over-year spending on specific vessels or classes can reveal trends in maintenance needs, aging of the fleet, and the increasing complexity and cost of repairs. This $39.1 million award fits within the expected range for a major availability.

What are the implications of the contract duration (259 days) on the USS Gridley's operational readiness?

A contract duration of 259 days (approximately 8.5 months) for the USS Gridley's FY23 SRA signifies a substantial period where the vessel will be unavailable for operational deployment. This extended maintenance availability is typical for major overhauls aimed at extending the ship's service life and addressing significant repair needs. The Navy must strategically schedule these availabilities to minimize impact on fleet readiness, often relying on other assets to cover operational gaps. The successful and timely completion of this availability is crucial for restoring the USS Gridley to full operational status.

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: N4523A22R0553

Offers Received: 4

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: $41,330,183

Exercised Options: $39,091,750

Current Obligation: $39,091,750

Actual Outlays: $28,919,698

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $19,667,579

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline