Navy awards $123M contract for USS MASON modernization, with 2 bids received

Contract Overview

Contract Amount: $123,152,963 ($123.2M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2019-12-20

End Date: 2021-05-06

Contract Duration: 503 days

Daily Burn Rate: $244.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS MASON (FY20) DEPOT MODERNIZATION PERIOD (DMP)

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $123.2 million to METRO MACHINE CORP. for work described as: USS MASON (FY20) DEPOT MODERNIZATION PERIOD (DMP) Key points: 1. Contract value appears reasonable given the scope of depot modernization. 2. Limited competition suggests potential for higher pricing than a more open process. 3. Fixed-price contract type mitigates cost overrun risk for the government. 4. Modernization period is critical for extending the service life of the USS MASON. 5. This contract falls within the broader shipbuilding and repair sector for naval assets.

Value Assessment

Rating: good

The $123.15 million contract for the USS MASON's Depot Modernization Period (DMP) is a significant investment. While direct comparisons are difficult without specific scope details, modernization efforts for naval vessels of this class typically range in the tens to hundreds of millions. The firm fixed-price structure provides cost certainty. Benchmarking against similar modernization contracts would require access to detailed technical specifications and historical data for comparable vessels.

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. Two bids were received, which is on the lower end for a contract of this magnitude. While competition occurred, the limited number of bidders might suggest that the market for specialized ship modernization services is concentrated, potentially impacting the government's ability to secure the most competitive pricing.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the full potential cost savings that could arise from a more robust competitive environment. The government secured a price, but it's unclear if it represents the best possible value achievable with broader participation.

Public Impact

The primary beneficiary is the U.S. Navy, ensuring the USS MASON remains operational and capable. Services delivered include essential modernization and repair work to extend the vessel's service life. The geographic impact is centered in Virginia, where the depot work is likely performed. This contract supports skilled labor in the shipbuilding and repair industry, including technicians and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders could indicate market concentration or high barriers to entry.
Firm Fixed Price contracts can sometimes lead to contractors cutting corners if not closely monitored, though this is a standard contract type.

Positive Signals

Full and open competition was utilized, adhering to best practices for government contracting.
The firm fixed-price contract type shifts cost risk to the contractor, providing budget certainty.
The contract duration (503 days) is substantial, allowing for thorough modernization work.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval readiness. This contract for the modernization of a specific vessel, the USS MASON, fits within the broader category of maintenance, repair, and overhaul (MRO) services for naval assets. Spending in this sector is often driven by fleet readiness requirements and the lifecycle of naval vessels. Comparable spending benchmarks would involve analyzing other depot modernization contracts for similar classes of ships.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale defense contract, it is likely that the prime contractor, Metro Machine Corp., is a large business. There is no explicit information on subcontracting plans for small businesses within this data, but it is common practice for large defense contractors to engage small businesses for specialized services or components.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The firm fixed-price nature provides a degree of accountability by capping government liability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Ship Maintenance and Repair
Shipbuilding and Repair Contracts
Defense Readiness Contracts
Fleet Modernization Programs

Risk Flags

Limited competition
Potential for cost growth if scope expands beyond fixed-price definition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $123.2 million to METRO MACHINE CORP.. USS MASON (FY20) DEPOT MODERNIZATION PERIOD (DMP)

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 $123.2 million.

What is the period of performance?

Start: 2019-12-20. End: 2021-05-06.

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

Metro Machine Corp. has a history of performing work for the Department of Defense, including contracts related to ship repair and maintenance. To assess their track record specifically for modernization periods of vessels similar to the USS MASON, a deeper dive into their past performance evaluations and contract history would be necessary. This would involve reviewing contract award databases for previous modernization projects, examining any reported performance issues or commendations, and understanding the scale and complexity of their prior engagements. Without this detailed historical data, it's difficult to definitively state their expertise in this specific niche, though their selection as a bidder suggests they meet basic qualifications.

How does the awarded price compare to the estimated cost or budget for this modernization?

The provided data shows the awarded amount ($123,152,963) but does not include the government's initial estimate or budget allocation for the USS MASON's Depot Modernization Period (DMP). To compare the awarded price to the estimated cost, one would need access to the original solicitation documents or internal government budget information. A common metric is to assess the relationship between the winning bid and the government estimate (e.g., awarded price as a percentage of estimate). If the awarded price is significantly below the estimate, it could indicate strong competition or a conservative estimate. Conversely, if it's at or above the estimate, it might suggest a tighter market or a well-defined scope of work.

What are the key performance indicators (KPIs) used to measure the success of this modernization contract?

Key performance indicators for a ship modernization contract like this typically focus on schedule adherence, quality of work, and adherence to technical specifications. Specific KPIs might include the percentage of critical path tasks completed on time, the number of defects or rework required, compliance with safety standards, and the successful testing and certification of modernized systems. The firm fixed-price nature incentivizes the contractor to meet these KPIs efficiently. The Navy's quality assurance representatives would be actively involved in monitoring progress against these metrics throughout the contract's duration.

What is the historical spending trend for USS MASON modernization or similar vessels?

Analyzing historical spending for the USS MASON specifically would require tracking all previous maintenance, repair, and modernization contracts awarded for this vessel throughout its service life. For similar vessels, one would look at modernization contracts for destroyers or other ships within the same class. Trends might reveal increasing costs over time due to inflation, aging infrastructure, or evolving technological requirements. A pattern of frequent, smaller repair contracts versus periodic, large-scale modernizations could also be observed. Without access to historical contract databases filtered by vessel class and service type, a precise trend analysis is not possible from the provided data.

What is the potential impact of this contract on the overall readiness of the U.S. Navy's fleet?

This contract directly impacts the readiness of the U.S. Navy's fleet by ensuring the USS MASON undergoes essential modernization. A successful modernization extends the operational lifespan and enhances the capabilities of the vessel, allowing it to continue performing its assigned missions. Delays or subpar work could negatively affect readiness. The modernization period itself means the ship is out of service, creating a temporary gap that the Navy must manage through fleet deployment adjustments. Therefore, the timely and effective completion of this contract is crucial for maintaining the overall combat effectiveness and availability of naval assets.

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: N0002419R4460

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

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: $125,785,922

Exercised Options: $123,152,963

Current Obligation: $123,152,963

Actual Outlays: $36,587,020

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $39,908,750

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline