Navy awards $12.7M contract for vessel maintenance, highlighting shipbuilding and repair sector activity

Contract Overview

Contract Amount: $12,683,144 ($12.7M)

Contractor: Lake Union Drydock Company

Awarding Agency: Department of Defense

Start Date: 2026-01-08

End Date: 2027-03-10

Contract Duration: 426 days

Daily Burn Rate: $29.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MAINTENANCE, REPAIR AND PRESERVATION OF YTT-10.

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98102

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $12.7 million to LAKE UNION DRYDOCK COMPANY for work described as: MAINTENANCE, REPAIR AND PRESERVATION OF YTT-10. Key points: 1. Contract value of $12.7M indicates significant investment in maintaining naval assets. 2. Full and open competition suggests a robust market for ship repair services. 3. The definitive contract type implies a clear scope of work for vessel upkeep. 4. Fixed-price terms aim to control costs and provide budget certainty. 5. The contract duration of 426 days allows for comprehensive maintenance execution. 6. Awarded to Lake Union Drydock Company, a player in the shipbuilding and repair industry.

Value Assessment

Rating: good

The contract value of $12.7 million for vessel maintenance appears reasonable within the context of large-scale naval repairs. Benchmarking against similar contracts for drydocking and repair services for vessels of comparable size and complexity would provide a more precise assessment of value. However, the fixed-price nature of the contract suggests an effort to establish a clear cost ceiling, which is a positive indicator for cost control. The duration of over a year also suggests a substantial scope of work, making the overall price point potentially competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was broad, specific exclusions were made, possibly due to specialized requirements or existing relationships. The fact that it was open competition suggests multiple bidders likely vied for the contract, which generally promotes competitive pricing. The number of bidders is not specified, but the open nature implies a healthy level of market interest and potential for price discovery.

Taxpayer Impact: This competitive approach is beneficial for taxpayers as it encourages multiple companies to offer their best pricing and services, likely leading to a more cost-effective outcome for the government.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the operational readiness of its vessels. Services delivered include essential maintenance, repair, and preservation of a specific vessel (YTT-10). The geographic impact is centered in Washington state, where Lake Union Drydock Company is located. Workforce implications include employment opportunities for skilled tradespeople in the shipbuilding and repair sector in Washington.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen repair issues arise beyond the scope of the fixed-price contract.
Dependence on a single contractor for a critical maintenance period could lead to schedule delays if the contractor faces operational challenges.
The 'exclusion of sources' clause warrants scrutiny to ensure it did not unduly limit competition.

Positive Signals

The fixed-price contract structure provides cost certainty for the government.
The full and open competition aspect suggests a competitive bidding process, likely resulting in favorable pricing.
The contract duration allows for thorough and comprehensive maintenance, contributing to vessel longevity and readiness.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval operations and national security. This contract falls within the NAICS code 336611 (Ship Building and Repairing). The market is characterized by specialized facilities, skilled labor, and significant capital investment. Spending in this sector is often driven by defense appropriations and the need to maintain aging fleets. Comparable spending benchmarks would involve analyzing other contracts for similar vessel maintenance and repair services awarded by the Navy or other maritime agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary impact is on large businesses within the shipbuilding and repair sector. There is no explicit information on subcontracting requirements for small businesses within this award notice. The lack of a small business set-aside means opportunities for small business participation may be limited unless they are part of a larger prime contractor's supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance or closeout.

Related Government Programs

Naval Vessel Repair Contracts
Shipbuilding and Repair Services
Defense Maintenance and Repair
Maritime Industry Support
Fleet Readiness Programs

Risk Flags

Potential for scope creep if unforeseen repairs are needed.
Contractor performance risk (delays, quality issues).
Justification for 'exclusion of sources' needs review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.7 million to LAKE UNION DRYDOCK COMPANY. MAINTENANCE, REPAIR AND PRESERVATION OF YTT-10.

Who is the contractor on this award?

The obligated recipient is LAKE UNION DRYDOCK COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $12.7 million.

What is the period of performance?

Start: 2026-01-08. End: 2027-03-10.

What is the historical spending pattern of the Department of the Navy with Lake Union Drydock Company for similar vessel maintenance services?

Analyzing historical spending with Lake Union Drydock Company requires accessing detailed contract databases over several fiscal years. A review of past awards would reveal the frequency, value, and types of services previously contracted. For instance, if the Navy has consistently awarded multi-million dollar maintenance contracts to this company over the last decade, it suggests a strong, established relationship and potentially a recognized expertise. Conversely, if this is a rare or significantly larger award than usual, it might warrant further investigation into the specific needs driving this particular contract and whether the company's capacity or pricing remains competitive compared to market alternatives. Without specific historical data, it's difficult to definitively assess if this $12.7M award represents a continuation of a trend or an outlier.

How does the per-unit cost of this contract compare to industry benchmarks for similar vessel repair services?

Determining a precise per-unit cost benchmark for this contract is challenging without knowing the specific scope of work and the vessel's characteristics. 'Maintenance, repair, and preservation' can encompass a wide range of activities, from routine inspections and cleaning to major overhauls and structural repairs. If the contract were broken down into specific line items (e.g., drydocking days, labor hours for specific trades, material costs for components), these could be compared to industry averages. For example, average daily rates for drydock usage or hourly labor costs for specialized welders in the region could be used. Given the $12.7 million value and a duration of 426 days, the average daily cost is approximately $29,773. This figure needs to be contextualized against market rates for similar naval vessels, considering factors like vessel size, complexity, and the specific repairs undertaken. A comparison to other Navy contracts for similar vessels would be the most relevant benchmark.

What are the potential risks associated with the 'Full and Open Competition After Exclusion of Sources' clause?

The 'Full and Open Competition After Exclusion of Sources' clause, while allowing for broad competition, introduces a layer of complexity and potential risk. The 'exclusion of sources' implies that certain potential bidders were intentionally disqualified or not considered from the outset. The primary risk is that this exclusion may have been based on criteria that were overly restrictive, unnecessarily limited the pool of qualified contractors, or potentially favored specific incumbent providers without a clear justification. This could lead to reduced price competition, potentially higher costs for the government, and a missed opportunity to engage with innovative or more cost-effective solutions from excluded firms. Thorough documentation and justification for the exclusions are crucial to mitigate the risk that the competition was not as robust as intended, ensuring that taxpayer funds are used efficiently.

What is the track record of Lake Union Drydock Company in fulfilling government contracts, particularly within the Department of Defense?

Lake Union Drydock Company has a history of performing work within the maritime sector, including for government entities. To assess their track record specifically for Department of Defense contracts, a review of their past performance evaluations and contract completion history is necessary. This would involve examining data on contract timeliness, quality of work, adherence to specifications, and any instances of disputes or contract modifications. A positive track record typically involves successful completion of similar scope contracts, minimal performance issues, and a history of meeting or exceeding government requirements. Conversely, a history of significant delays, cost overruns, or quality deficiencies would raise concerns about their capacity to successfully execute this $12.7 million contract. Publicly available contract databases can provide insights into their award history and performance ratings.

How does the fixed-price contract type mitigate risks for the government compared to other contract types like cost-plus?

The Firm Fixed Price (FFP) contract type offers significant advantages in risk mitigation for the government, particularly concerning cost certainty. Under an FFP agreement, the contractor assumes most of the risk for cost overruns. The price is set at the outset and generally does not change, regardless of the contractor's actual costs incurred. This provides the government with a predictable budget ceiling, making financial planning more straightforward. In contrast, cost-plus contracts shift more of the cost risk to the government, as the contractor is reimbursed for allowable costs plus a fee. While cost-plus contracts can be useful for research and development or situations with high uncertainty, FFP is preferred for well-defined scopes of work, like vessel maintenance, as it incentivizes the contractor to control costs efficiently to maximize their profit margin. This makes FFP a strong choice for ensuring value for taxpayer money in this scenario.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4523A25R1107

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1515 FAIRVIEW AVE E, SEATTLE, WA, 98102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,065,983

Exercised Options: $12,683,144

Current Obligation: $12,683,144

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline