WASHINGTON - The Navy awarded two contracts key to future amphibious operations and replenishment missions, June 30. The combined total projected contract value of these contracts is approximately $6.3 billion.
General Dynamics, National Steel and Shipbuilding Company (NASSCO) was awarded a fixed price incentive firm target (FPIF) block buy contract for the Detail Design and Construction (DD&C) of six T-AO 205 Class Fleet Replenishment Oilers. The award amount is $640,206,756 for the fiscal year 2016 lead ship and, if appropriated, includes line items for five follow-on ships between FY2018 and FY 2022, and options for associated support efforts.
Huntington Ingalls Inc., Ingalls Shipbuilding Division (Ingalls) was awarded a FPIF contract for $272,467,161 for LHA 8 Planning, Advanced Engineering and Procurement of Long Lead Time Material with options for DD&C and the associated support efforts.
Additionally, both contracts include options for Contract Design (CD) support for the Amphibious Warfare Ship Replacement, referred to as LX(R). Options for LX(R) CD support, special studies, engineering and post-delivery industrial services, provisioned items orders, other direct costs and special incentives which, if funding is made available for all ships and all options are exercised, will bring the cumulative value of the contract awards to $3,156,828,444 and $3,133,852,637 to NASSCO and Ingalls, respectively.
“This strategy reinforces the Navy’s commitment to a culture of affordability that emphasizes competition while maintaining our critical shipbuilding industrial base,” said Jay Stefany, executive director for Amphibious, Auxiliary, and Sealift Programs in Program Executive Office Ships. “The approach provides best value to the taxpayers, supports our industry partners, and provides the foundation for future warfighting capabilities.”
The acquisition strategy for the limited competition of LHA 8 DD&C, T-AO 205 Class (Ships 1-6) DD&C, and LX(R) CD was developed in order to maintain a stable Amphibious and Auxiliary Shipbuilding industrial mobilization base while also ensuring competition for current and future classes of these ships.
The Navy used a Profit Related to Offers approach as a means to incentivize competition, whereby the offeror that proposed the lowest total evaluated price for the combination of both proposals received the maximum target profit stipulated in the solicitation and an option for LX(R) CD support, while the offeror that proposed the higher total evaluated price for the combination of both proposals received a target profit relative to the other offer (calculated according to the solicitation) and an option for LX(R) CD support.