Navy's $56.8M Shipyard Optimization Program in Hawaii awarded to AECOM Technical Services, Inc

Contract Overview

Contract Amount: $56,818,956 ($56.8M)

Contractor: AECOM Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-03-27

End Date: 2026-01-31

Contract Duration: 2,502 days

Daily Burn Rate: $22.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: IGF::OT::IGF X003 SHIPYARD INFRASTRUCTURE OPTIMIZATION PROGRAM

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $56.8 million to AECOM TECHNICAL SERVICES, INC. for work described as: IGF::OT::IGF X003 SHIPYARD INFRASTRUCTURE OPTIMIZATION PROGRAM Key points: 1. Value for money assessed through cost-plus award fee structure, incentivizing performance. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators include the cost-plus award fee structure, which can lead to cost overruns if not managed carefully. 4. Performance context is tied to the optimization of shipyard infrastructure, a critical national security function. 5. Sector positioning within facilities support services, essential for maintaining naval readiness.

Value Assessment

Rating: good

The contract utilizes a Cost Plus Award Fee (CPAF) structure, which allows for reimbursement of costs plus an award fee based on performance. This structure can be effective in incentivizing contractors to meet or exceed performance objectives. Benchmarking against similar large-scale infrastructure projects for the Department of Defense suggests that the pricing is within a reasonable range, though specific cost drivers would require deeper analysis. The total award value of $56.8 million over its period of performance appears commensurate with the scope of optimizing significant shipyard infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but a full and open competition generally fosters a competitive environment, which can lead to better pricing and innovation. The Navy's approach suggests a commitment to leveraging the broadest possible market for these critical services.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government explores a wide range of potential solutions.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, through the modernization of critical shipyard infrastructure. Services delivered include facilities support and optimization, crucial for maintaining and repairing naval vessels. The geographic impact is focused on Hawaii, specifically impacting naval operations in the Pacific theater. Workforce implications may include the creation or sustainment of jobs in construction, engineering, and facilities management in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance metrics are not strictly managed.
Dependence on a single contractor for a critical infrastructure program requires robust oversight.
Scope creep could increase the overall cost beyond initial projections if not carefully controlled.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded fair pricing.
The Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
Focus on infrastructure optimization addresses long-term strategic needs for naval readiness.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of physical infrastructure. The market for these services is substantial, particularly for government contracts supporting large-scale military installations. Comparable spending benchmarks for shipyard modernization and infrastructure support can vary significantly based on location, scope, and specific technological requirements, but large programs like this represent significant investments in national defense infrastructure.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly detailed in the provided data. However, given the scale and nature of shipyard infrastructure optimization, it is common for prime contractors to engage small businesses for specialized services or materials. Further analysis would be needed to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Navy, with potential involvement from the Naval Facilities Engineering Command. The Cost Plus Award Fee structure necessitates close monitoring of performance metrics and cost expenditures to ensure value for money. Transparency would be enhanced by public reporting on performance milestones and cost variances. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Shipyard Infrastructure Optimization Program (SIOP)
Naval Facilities Engineering Command contracts
Department of Defense Infrastructure Projects
Public Works and Facilities Management Contracts

Risk Flags

Cost Plus Award Fee (CPAF) contract type requires diligent oversight to manage costs.
Large-scale infrastructure projects are susceptible to scope creep and unforeseen challenges.
Dependence on contractor performance for critical national security infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.8 million to AECOM TECHNICAL SERVICES, INC.. IGF::OT::IGF X003 SHIPYARD INFRASTRUCTURE OPTIMIZATION PROGRAM

Who is the contractor on this award?

The obligated recipient is AECOM TECHNICAL 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 $56.8 million.

What is the period of performance?

Start: 2019-03-27. End: 2026-01-31.

What is the historical spending trend for shipyard infrastructure optimization programs within the Department of the Navy?

Historical spending on shipyard infrastructure optimization within the Department of the Navy has been substantial and cyclical, often driven by the need to modernize aging facilities and adapt to new naval technologies and vessel classes. Programs like the Shipyard Infrastructure Optimization Program (SIOP) represent a concentrated effort to address decades of underinvestment. Prior to SIOP, individual shipyards often received funding through separate, smaller projects or unfunded requirements. The total investment in shipyard modernization can span billions of dollars over several years, with specific allocations varying annually based on budgetary priorities and strategic assessments of naval readiness. Understanding these trends requires analyzing appropriations bills, budget requests, and specific program execution reports over extended periods.

How does the performance of AECOM Technical Services, Inc. on similar government contracts compare to industry benchmarks?

Assessing AECOM Technical Services, Inc.'s performance requires a detailed review of their past contract performance evaluations (e.g., CPARS reports) and any publicly available data on project success rates and client satisfaction. Generally, AECOM is a large, established government contractor with a broad portfolio. Benchmarking their performance against industry standards for large-scale facilities support and infrastructure projects involves comparing metrics such as on-time delivery, budget adherence, quality of work, and safety records. Without specific CPARS data or detailed project outcomes for comparable contracts, a definitive comparison is challenging. However, their continued success in winning large federal contracts suggests a generally positive performance record, though specific project challenges or successes would need to be investigated individually.

What are the primary risks associated with the Cost Plus Award Fee (CPAF) contract type for this shipyard infrastructure project?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract for a project of this magnitude include potential cost overruns and a lack of definitive cost control if not managed rigorously. While CPAF aims to incentivize performance through an award fee, the 'cost-plus' component means the government reimburses the contractor's allowable costs. If cost estimation is inaccurate or if unforeseen issues arise during infrastructure optimization, costs can escalate beyond initial projections. The award fee, while intended to reward superior performance, can also become a point of negotiation or contention. Effective risk mitigation requires robust government oversight, clear performance metrics, and proactive management of scope changes to ensure the contractor remains focused on both cost efficiency and achieving the desired infrastructure improvements.

What is the projected impact of this contract on the operational readiness of the U.S. Navy's Pacific fleet?

This contract is expected to have a significant positive impact on the operational readiness of the U.S. Navy's Pacific fleet by modernizing and optimizing critical shipyard infrastructure in Hawaii. Shipyards are essential for the maintenance, repair, and overhaul of naval vessels. Outdated or inefficient facilities can lead to longer turnaround times for repairs, increased maintenance costs, and potential delays in deploying or sustaining fleet assets. By upgrading these facilities, the Navy aims to improve efficiency, reduce maintenance backlogs, enhance the capability to service advanced naval platforms, and ultimately ensure that ships in the Pacific fleet can be maintained and deployed more reliably and effectively. This investment directly supports the Navy's strategic posture in the Indo-Pacific region.

How does the $56.8 million award compare to the total estimated cost of the Shipyard Infrastructure Optimization Program (SIOP)?

The $56.8 million award to AECOM Technical Services, Inc. represents a specific delivery order or task order within the broader Shipyard Infrastructure Optimization Program (SIOP). SIOP is a multi-billion dollar initiative aimed at modernizing all four public naval shipyards. The total estimated cost for SIOP is significantly higher, often cited in the tens of billions of dollars over a multi-year period. Therefore, this $56.8 million contract is a component of a much larger strategic investment. Comparing this single award to the overall SIOP budget highlights that it is one of many contracts necessary to achieve the program's comprehensive goals, focusing on specific infrastructure needs within a particular shipyard or set of facilities.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6274215R3550

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 300 S GRAND AVE, SUITE 1100, LOS ANGELES, CA, 90071

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $56,818,956

Exercised Options: $56,818,956

Current Obligation: $56,818,956

Actual Outlays: $1,180,250

Subaward Activity

Number of Subawards: 200

Total Subaward Amount: $78,561,083

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6274216D3555

IDV Type: IDC

Timeline