Navy awards $229M contract for ship maintenance, repair, and modernization to Metro Machine Corp

Contract Overview

Contract Amount: $229,363,609 ($229.4M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2008-01-29

End Date: 2009-09-29

Contract Duration: 609 days

Daily Burn Rate: $376.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: EXECUTION PLANNING AND MAINTENACE, REPAIR, MODERNIZATION AND ALTERATION DURING MID-LIFE AVAILABLITIES FOR LSD 41/49

Place of Performance

Location: NORFOLK, NORFOLK (CITY) County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $229.4 million to METRO MACHINE CORP. for work described as: EXECUTION PLANNING AND MAINTENACE, REPAIR, MODERNIZATION AND ALTERATION DURING MID-LIFE AVAILABLITIES FOR LSD 41/49 Key points: 1. Contract awarded through full and open competition, suggesting a robust bidding process. 2. The contract type, Cost Plus Award Fee, incentivizes contractor performance while managing costs. 3. Duration of 609 days indicates a significant undertaking for mid-life availabilities. 4. The award value of $229.3 million represents a substantial investment in naval readiness. 5. The North American Industry Classification System (NAICS) code 336611 points to the shipbuilding and repair sector. 6. The contract was awarded by the Department of the Navy, a major defense spender.

Value Assessment

Rating: good

The contract value of $229.3 million for ship maintenance and modernization appears reasonable given the scope of work for LSD 41/49 class vessels. While specific benchmarks for this exact class and service period are not readily available, the duration of 609 days suggests a comprehensive overhaul. The Cost Plus Award Fee (CPAF) contract type allows for performance incentives, which can lead to better value if managed effectively. Further analysis would require comparing this award to similar mid-life availabilities for comparable naval assets.

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 bids. The presence of four bidders (no) suggests a competitive environment for this type of specialized naval maintenance. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a market-driven price. It reduces the risk of overpayment and encourages contractors to offer their best value.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the availability of LSD 41/49 class ships. Services delivered include execution planning, maintenance, repair, modernization, and alteration during mid-life availabilities. The geographic impact is likely centered around the shipyard performing the work, potentially in Virginia (SN: VIRGINIA), and the operational areas where the ships are deployed. Workforce implications include employment for skilled trades in shipbuilding and repair, such as welders, electricians, and pipefitters.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if not closely monitored.
Dependence on a single contractor for critical mid-life modernization could pose risks if performance falters.
The specialized nature of naval ship repair may limit the pool of qualified contractors in the long term.

Positive Signals

Awarded through full and open competition, indicating a competitive market for these services.
The Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
The contract addresses critical needs for maintaining the operational readiness of naval assets.

Sector Analysis

The shipbuilding and repair sector (NAICS 336611) is a critical component of the U.S. industrial base, supporting both commercial and defense needs. The Department of Defense is a significant customer within this sector, awarding substantial contracts for new construction, maintenance, and modernization of naval vessels. Spending in this area is driven by the need to maintain a modern and capable fleet. Comparable spending benchmarks would involve analyzing other contracts for similar ship classes and maintenance availabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor, Metro Machine Corp., is likely a large business. There is no explicit information on subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, though larger prime contractors often engage small businesses for specialized support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Cost Plus Award Fee structure necessitates close monitoring of costs and performance to ensure award fees are justified. Transparency is generally maintained through contract reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Defense Readiness Contracts
Mid-Life Ship Modernization Programs
Department of the Navy Procurement

Risk Flags

Cost Overrun Risk
Performance Below Expectations
Schedule Delays
Definition of Award Fee Criteria

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $229.4 million to METRO MACHINE CORP.. EXECUTION PLANNING AND MAINTENACE, REPAIR, MODERNIZATION AND ALTERATION DURING MID-LIFE AVAILABLITIES FOR LSD 41/49

Who is the contractor on this award?

The obligated recipient is METRO MACHINE CORP..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $229.4 million.

What is the period of performance?

Start: 2008-01-29. End: 2009-09-29.

What is the track record of Metro Machine Corp. in performing similar naval maintenance and modernization contracts?

Metro Machine Corp. has a history of performing contracts for the U.S. Navy, including ship repair and maintenance services. Their experience with various naval vessel classes would be a key factor in their ability to execute this specific contract. A review of their past performance evaluations, contract awards, and any reported issues or successes would provide a clearer picture of their capabilities and reliability. For instance, examining their performance on previous Cost Plus Award Fee contracts would indicate how effectively they have managed costs and achieved performance targets in similar incentive-based arrangements. Their ability to meet deadlines, adhere to quality standards, and manage complex repair projects are crucial aspects to consider.

How does the awarded value of $229.3 million compare to similar mid-life availabilities for LSD 41/49 class ships or comparable vessels?

Benchmarking the $229.3 million award requires comparing it to historical data for similar mid-life availabilities of LSD 41/49 class ships or comparable amphibious assault vessels. Without access to a comprehensive database of such specific contracts, a precise comparison is challenging. However, the duration of 609 days suggests a significant scope of work, encompassing extensive maintenance, repair, and modernization. Factors influencing cost include the specific upgrades required, the condition of the vessel upon entering availability, and the prevailing labor and material costs at the time of the award. Generally, mid-life availabilities represent a substantial investment, and this figure appears consistent with the complexity and duration of such major overhauls in the defense shipbuilding sector.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for complex ship modernization?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract for complex ship modernization revolve around cost control and performance management. While CPAF incentivizes the contractor to perform well by offering award fees based on achieving specific criteria, there's a risk that the "cost plus" aspect could lead to higher-than-expected expenditures if the government's oversight is not rigorous. The contractor may incur costs that are deemed reasonable and allowable, but the total cost could still exceed initial estimates. Furthermore, defining and objectively measuring the award fee criteria can be challenging, potentially leading to disputes or a failure to adequately reward superior performance or penalize subpar work. Effective management requires detailed cost tracking, performance monitoring, and clear communication between the government and the contractor.

What is the expected impact of this contract on the operational readiness of the U.S. Navy's amphibious assault fleet?

This contract is crucial for enhancing the operational readiness of the U.S. Navy's LSD 41/49 class ships. By addressing maintenance, repair, and modernization during their mid-life availabilities, the contract ensures these vessels remain capable, safe, and effective for their intended missions. Modernization efforts often involve upgrading systems to meet current operational requirements, improve efficiency, or extend the service life of the ships. Successful execution of this contract will directly contribute to the Navy's ability to deploy these assets for amphibious operations, humanitarian assistance, and other critical missions, thereby bolstering overall fleet readiness and national security.

How has federal spending on ship maintenance and repair evolved over the past five years, and where does this contract fit in?

Federal spending on ship maintenance and repair, particularly within the Department of Defense, has historically been substantial and subject to fluctuations based on fleet size, operational tempo, and budget priorities. While specific aggregate data for 'ship maintenance and repair' can vary depending on categorization, the Navy consistently represents a significant portion of this spending. This $229.3 million contract for mid-life availabilities of LSD 41/49 class ships represents a significant, but not unprecedented, investment within the broader context of naval sustainment. It aligns with the ongoing need to maintain aging vessels and incorporate modernizations to ensure fleet readiness. Analyzing trends would involve looking at overall Navy shipbuilding and conversion (SCN) accounts and maintenance, repair, and operations (MRO) budgets.

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: N0002407R4006

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 200 LIGON ST, NORFOLK, VA, 03

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Emerging Small Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $229,363,609

Exercised Options: $229,363,609

Current Obligation: $229,363,609

Contract Characteristics

Cost or Pricing Data: YES

Timeline