DoD's $66.6M ship repair contract awarded to Metro Machine Corp. with 3 bidders

Contract Overview

Contract Amount: $66,595,352 ($66.6M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2019-02-01

End Date: 2019-12-23

Contract Duration: 325 days

Daily Burn Rate: $204.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TYCOM (1B4B)

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $66.6 million to METRO MACHINE CORP. for work described as: TYCOM (1B4B) Key points: 1. Contract value of $66.6M for ship repair services. 2. Awarded under a full and open competition with 3 bidders. 3. Definitive contract type with a firm fixed price. 4. Performance period spans from February 2019 to December 2019. 5. Contract falls under the Ship Building and Repairing NAICS code. 6. The contractor, Metro Machine Corp., is based in Virginia.

Value Assessment

Rating: fair

The contract value of $66.6M for ship repair services appears to be within a reasonable range for the scope of work, though specific benchmarks are not readily available without more detailed service descriptions. The firm fixed-price structure suggests a defined scope, which can help control costs. However, without comparative data on similar repair contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. The number of bidders (3) indicates some level of competition, which generally supports fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit offers. Three bidders participated in this competition. The presence of multiple bidders suggests a degree of market interest and provides a basis for price comparison, which is beneficial for achieving competitive pricing.

Taxpayer Impact: The full and open competition with three bidders likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

Naval operations are supported through the repair and maintenance of vessels. The contract ensures the readiness of the U.S. Navy's fleet. Work is performed in Virginia, supporting the local economy and maritime industry. Employment opportunities are likely generated for skilled maritime labor in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen repair issues arise beyond the fixed-price scope.
Dependence on a single contractor for a critical period of ship maintenance.
Risk of performance delays impacting fleet readiness if the contractor faces operational challenges.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process.
Award to an established contractor with experience in ship repair.

Sector Analysis

The ship building and repairing sector is a critical component of the defense industrial base, supporting naval operations and national security. This contract falls within the broader maritime services industry, which includes shipbuilding, repair, and maintenance. Spending in this sector is often substantial due to the complexity and specialized nature of naval vessels. Comparable spending benchmarks would typically involve analyzing other large-scale ship repair contracts awarded by the Department of Defense.

Small Business Impact

This contract does not indicate any specific small business set-aside provisions, nor does it explicitly mention subcontracting goals for small businesses. The award was made to Metro Machine Corp., which is not identified as a small business in the provided data. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, unless the prime contractor engages small businesses for subcontracting opportunities not detailed here.

Oversight & Accountability

As a definitive contract awarded by the Department of the Navy, this contract is subject to standard government oversight mechanisms. These would include contract administration by the awarding agency, performance monitoring, and potentially audits. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Ship Building and Repair Services
Department of Defense Procurement
Maritime Industry Contracts

Risk Flags

Potential for cost growth if scope is not well-defined.
Contractor performance risk.
Dependence on specific technical expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.6 million to METRO MACHINE CORP.. TYCOM (1B4B)

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 $66.6 million.

What is the period of performance?

Start: 2019-02-01. End: 2019-12-23.

What is the historical spending pattern for ship repair services by the Department of the Navy?

The Department of the Navy historically spends billions of dollars annually on ship maintenance, repair, and overhaul services. This spending fluctuates based on fleet size, operational tempo, and the age of vessels requiring maintenance. Major repair contracts, like the one awarded to Metro Machine Corp., are crucial for maintaining fleet readiness. Analyzing historical data reveals trends in contract values, competition levels, and the types of services most frequently procured. For instance, there's a consistent need for dry-docking, hull maintenance, and systems upgrades across various classes of naval vessels. The Navy often utilizes a mix of contract types, including firm-fixed-price for well-defined scopes and cost-plus contracts for more complex or uncertain repair scenarios. Understanding these patterns helps in assessing the reasonableness of individual contract awards and identifying potential areas for cost savings or efficiency improvements.

How does the competition level of 3 bidders compare to similar ship repair contracts?

A competition level of three bidders for a contract of this magnitude ($66.6M) is generally considered moderate. While more bidders can sometimes lead to lower prices, three offers often indicate sufficient market interest and a reasonable degree of competition. In the highly specialized field of naval ship repair, the number of qualified bidders can be limited by technical capabilities, shipyard infrastructure, and security clearances. Contracts for major overhauls or specialized repairs might see fewer than three bidders due to these barriers to entry. Conversely, simpler maintenance tasks might attract a larger pool. Therefore, three bidders suggest that the Navy successfully reached a segment of the capable market, providing a basis for price negotiation and selection, though it might not represent the absolute maximum possible competition.

What are the potential risks associated with a firm-fixed-price contract for ship repair?

While firm-fixed-price (FFP) contracts offer cost certainty to the government, they can introduce risks for the contractor, which may be indirectly borne by the government if not managed properly. For ship repair, unforeseen issues discovered during the work (e.g., hidden corrosion, unexpected system failures) can lead to significant cost overruns for the contractor if the contract scope is not meticulously defined. If the contractor underestimated the complexity or encountered extensive problems, they might seek change orders, potentially increasing the total cost. There's also a risk that the contractor might cut corners on quality to maintain profitability under an FFP contract, especially if they face financial pressure. Effective government oversight and a clearly defined scope of work are crucial to mitigate these risks and ensure the quality of repairs.

What is Metro Machine Corp.'s track record with the Department of the Navy?

Metro Machine Corp. has a history of performing contracts for the Department of the Navy, primarily in the area of ship repair and maintenance. Their performance record would typically be documented within the Navy's contractor performance assessment reporting system (CPARS). While specific details of past performance are not provided in this data snippet, their ability to win a definitive contract of this size suggests they have met the Navy's requirements in previous engagements. A thorough review would involve examining CPARS reports for past contracts to assess their on-time delivery, quality of work, cost control, and overall customer satisfaction. This information is vital for understanding their reliability and capability in executing complex naval repair projects.

How does this contract's value compare to the overall Navy shipbuilding and repair budget?

The $66.6 million value of this contract represents a specific allocation within the Department of the Navy's broader shipbuilding and repair budget. The Navy's annual budget for shipbuilding, conversion, and repair is typically in the tens of billions of dollars. Therefore, this single contract, while substantial, is a component of a much larger financial picture. Its significance lies in its contribution to maintaining the operational readiness of a portion of the fleet. When viewed against the total budget, it highlights the ongoing investment required for fleet sustainment. Analyzing its proportion relative to other similar repair contracts awarded within the same fiscal year or across different ship classes would provide further context on its relative scale and importance.

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: N0002418R4448

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 200 LIGON ST, NORFOLK, VA, 23523

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

Financial Breakdown

Contract Ceiling: $69,159,804

Exercised Options: $66,595,352

Current Obligation: $66,595,352

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $32,841

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline