Navy awards $160.7M contract for USS New York repair and modernization to Metro Machine Corp

Contract Overview

Contract Amount: $160,692,608 ($160.7M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2020-11-09

End Date: 2022-10-06

Contract Duration: 696 days

Daily Burn Rate: $230.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS NEW YORK DSRA REPAIR AND MODERNIZATION

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $160.7 million to METRO MACHINE CORP. for work described as: USS NEW YORK DSRA REPAIR AND MODERNIZATION Key points: 1. Contract value represents a significant investment in naval asset sustainment. 2. Competition dynamics suggest a potentially competitive bidding process for this specialized service. 3. Fixed-price contract type aims to control costs and provide budget certainty. 4. The duration of the contract indicates a substantial scope of work for ship repair and modernization. 5. This contract falls within the broader category of defense procurement for naval vessel maintenance.

Value Assessment

Rating: good

The contract value of $160.7 million for the USS New York DSRA repair and modernization appears reasonable given the complexity of naval ship maintenance. Benchmarking against similar large-scale naval repair contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage costs effectively, but detailed cost breakdowns are needed to fully assess pricing efficiency. The contract's duration of 696 days points to a comprehensive scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable shipyards were allowed to bid. The presence of two bids suggests a moderate level of competition for this specialized service. While two bidders is better than one, a higher number of bids would typically lead to more aggressive pricing and potentially better value for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down costs through competitive pricing.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the USS New York is maintained and modernized. Services delivered include extensive repairs and modernization to a significant naval asset. The geographic impact is primarily centered around the shipyard performing the work, likely in Virginia given the 'SN' field. Workforce implications include employment for skilled tradespeople in the shipbuilding and repair sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extensive repair and modernization process.
Dependence on a single contractor for a critical naval asset's sustainment.
Risk of schedule delays impacting naval operational availability.

Positive Signals

Firm fixed-price contract structure provides cost certainty for the government.
Awarded through full and open competition, suggesting a vetted and capable contractor.
Long contract duration allows for thorough execution of complex modernization tasks.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval fleet readiness. This contract falls within the broader defense procurement market, specifically focusing on ship maintenance and modernization. Spending in this sector is often substantial due to the high cost and complexity of naval vessels. Comparable spending benchmarks would involve analyzing other major repair and overhaul contracts for similar classes of naval ships.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SS: false, SB: false). Metro Machine Corp. is likely a large business. There is no explicit information on subcontracting plans for small businesses within this award, which could be a missed opportunity to engage the small business industrial base in specialized repair and modernization efforts.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract award announcements and public databases like USASpending.gov. The Inspector General for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Naval Ship Repair and Maintenance
Shipbuilding and Repair
Defense Procurement
Vessel Modernization
U.S. Navy Fleet Support

Risk Flags

Potential for cost growth due to unforeseen repair needs.
Schedule adherence is critical for naval operational readiness.
Contractor performance history requires thorough vetting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $160.7 million to METRO MACHINE CORP.. USS NEW YORK DSRA REPAIR AND MODERNIZATION

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 $160.7 million.

What is the period of performance?

Start: 2020-11-09. End: 2022-10-06.

What is the track record of Metro Machine Corp. in performing similar large-scale naval repair and modernization contracts?

Assessing Metro Machine Corp.'s track record requires a review of their past performance on contracts of similar size, scope, and complexity. This would involve examining contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. A strong track record would indicate a higher likelihood of successful project execution, adherence to schedule, and cost control. Conversely, a history of performance issues could signal potential risks for this current contract, necessitating closer oversight and risk mitigation strategies from the Navy.

How does the awarded amount of $160.7 million compare to the estimated cost or budget for the USS New York DSRA repair and modernization?

The awarded amount of $160.7 million represents the final negotiated price for the repair and modernization of the USS New York. To assess value, this figure needs to be compared against the government's initial cost estimates or budget allocations for this specific project. If the awarded amount is significantly lower than estimates, it could indicate successful negotiation or competitive pressure. However, if it is higher, it may suggest that initial estimates were inaccurate or that unforeseen complexities drove up the price. A detailed analysis of the bidding process and any pre-award cost analyses would provide further context on whether this represents good value.

What are the primary risk indicators associated with a contract of this magnitude and duration for naval vessel repair?

Key risk indicators for a contract of this magnitude and 696-day duration include technical complexity, potential for unforeseen structural or system issues discovered during disassembly, supply chain disruptions for specialized parts, and labor availability for skilled trades. Schedule slippage is a significant risk, as delays can impact naval operational readiness and incur additional costs. Cost overruns are also a concern, particularly with firm fixed-price contracts if scope creep or unexpected repair needs emerge. Contractor performance and financial stability are critical, as is the government's ability to provide timely oversight and decision-making.

How effective is the firm fixed-price (FFP) contract type in managing costs for complex naval modernization projects like this?

The firm fixed-price (FFP) contract type is generally favored by the government for its cost control benefits, as it shifts the risk of cost overruns to the contractor. For complex naval modernization projects, FFP provides budget certainty. However, its effectiveness can be challenged by the inherent uncertainties in assessing the full scope of work for aging vessels. If significant unforeseen issues arise, contractors may seek change orders, potentially increasing the total cost. Therefore, while FFP aims for cost efficiency, thorough pre-award assessment and robust contract management are crucial to mitigate risks and ensure the government receives good value.

What are the historical spending patterns for the Department of the Navy in ship repair and modernization over the past five years?

Analyzing historical spending patterns for the Department of the Navy in ship repair and modernization reveals a consistent and substantial investment in maintaining and upgrading its fleet. Annual expenditures typically run into the billions of dollars, reflecting the large number of vessels requiring upkeep and the high cost of complex overhauls and technological upgrades. Spending can fluctuate based on fleet readiness requirements, shipbuilding programs, and specific modernization initiatives. Understanding these patterns helps contextualize the $160.7 million award for the USS New York as part of a larger, ongoing commitment to naval asset sustainment.

What is the significance of the NAICS code 336611 (Ship Building and Repairing) in understanding this contract's place in the industrial landscape?

The North American Industry Classification System (NAICS) code 336611, 'Ship Building and Repairing,' precisely categorizes this contract within a specialized segment of the manufacturing and defense industrial base. This code signifies that the work involves the construction, alteration, or repair of ships and other marine vessels. Companies operating under this code possess specific facilities, skilled labor, and certifications required for maritime work. This contract's classification highlights its role in supporting a critical industry that underpins national security and maritime commerce, and it allows for benchmarking against other contracts within this specific sector.

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: N0002420R4417

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: $164,780,198

Exercised Options: $160,692,608

Current Obligation: $160,692,608

Actual Outlays: $99,761,516

Subaward Activity

Number of Subawards: 78

Total Subaward Amount: $49,858,806

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline