On March 16, 2012, about 1015 central daylight time, a Cessna 172K, N79509, experienced a total loss of engine power while maneuvering near Pensacola, Florida. The pilot subsequently ditched the airplane into Pensacola Bay. The certificated flight instructor (CFI) and student pilot were not injured. The airplane sustained substantial damage to the windshield and was submerged in salt water. The airplane was registered to, and operated by, a local flight school under the provisions of Title 14 Code of Federal Regulations Part 91 as a local instructional flight. Visual meteorological conditions prevailed and no flight plan had been filed. The flight departed from the Pensacola Gulf Coast Regional Airport (PNS), Pensacola, FL about 0915. According to both the CFI and the student, while cruising about 1,000 feet above ground level, the engine "hesitated then quit." The CFI assumed control of the airplane and during the subsequent descent, the CFI attempted to restart the engine; however, the restart was unsuccessful. The airplane was ditched in the bay. The airplane struck the water and came to rest, both occupants egressed, and the airplane subsequently sank. The CFI held a commercial pilot certificate with ratings for airplane single-engine land, multiengine land, and instrument airplane. As well as a flight instructor certificate with ratings for airplane single-engine land, multiengine land, and instrument airplane. He reported over 4000 total hours of flight experience, of which, over 2000 total hours were in the accident airplane make and model. The student pilot held a student pilot certificate which was issued on February 5, 2012. He reported 3 total hours of flight experience, of which, all were in the accident airplane make and model. Post accident examination of the engine by the NTSB investigator in charge revealed that the engine remained attached to the airframe via the engine mounts. The engine was rotated by hand utilizing the propeller which remained attached to the propeller flange. Thumb compression was confirmed on the No. 4 cylinder; however, no compression was noted on the other cylinders. Following the removal of the engine accessories, the engine was rotated by hand utilizing the attached propeller; however, continuity was not obtained to the rear accessory pad. Removal of the accessory pad revealed that the crankshaft gear lockplate and bolt were absent from the crankshaft gear, attached to the aft end of the crankshaft. The lockplate and bolt were not able to be located throughout the engine. Rotation of the crankshaft gear revealed that the stepped dowel had been fractured. The crankshaft, step dowel, and crankshaft gear were sent to the NTSB's Materials Laboratory for further examination. No other defects were noted with the engine. A detailed report of the engine examination is included in the docket that accompanies this accident. Examination of the airframe and engine maintenance records revealed that a 50 hour inspection had been accomplished on February 23, 2012. At the time of the inspection the recorded engine time since overhaul was 534.39 hours total time in service. An entry dated August 8, 2010 recorded that the engine was rebuilt in accordance with Lycoming factory recommended procedures. The entry also stated that "all recommended parts listed in the Lycoming overhaul manual and service bulletins were installed." The NTSB's Materials Laboratory visually examined the crankshaft gear; however, no witness marks or wear was noted in the area where the lockplate and bolt make contact with the gear. No deformation, fracture, or wear was found in the threaded bolt hole, located in the end of the crankshaft. Examination of the dowel and pilot hole on the gear revealed matching wear marks. Further examination of the dowel revealed that the wear mark covered about one-third of the dowel's cross sectional area and the remaining area was fractured with ratchet and crank arrest marks as well as individual fatigue striations. The crankshaft, dowel, and gear were all measured and found to be within limits set forth by the manufacturer. A detailed examination report is included in the docket that accompanies this accident. According to Lycoming Service Bulletin 475C, which states in part "assemble the gear to the crankshaft using both a new lockplate and bolt…tighten the bolt to 125 in-lbs torque, then with a hammer and brass drift, tap lightly around the pilot flange of the gear and listen for sharp solid sounds from the hammer blows that would indicate that the gear is seated against the crankshaft…bend the lockplate against the bolt head. A logbook entry, specifying the final bolt torque, verify that the lockplate was properly bent in place against the bolt head and that the inspections and reword required by Lycoming Service Bulletin No. 475C were accomplished…" No entry was located in the engine logbook that indicated the final bolt torque.