Navy awards $22M lathe system contract to PANDA MACHINE TOOLS INC, with 8 bidders

Contract Overview

Contract Amount: $22,061,879 ($22.1M)

Contractor: Panda Machine Tools Inc

Awarding Agency: Department of Defense

Start Date: 2010-08-11

End Date: 2015-08-30

Contract Duration: 1,845 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINAL ACCEPTANCE OF LATHE SYSTEM AT PSNS

Place of Performance

Location: BREMERTON, KITSAP County, WASHINGTON, 98314, UNITED STATES OF AMERICA

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $22.1 million to PANDA MACHINE TOOLS INC for work described as: FINAL ACCEPTANCE OF LATHE SYSTEM AT PSNS Key points: 1. Contract value appears reasonable given the duration and scope of delivering a specialized lathe system. 2. Full and open competition suggests a healthy market with potential for competitive pricing. 3. The fixed-price contract type shifts performance risk to the contractor. 4. Delivery timeline of over 5 years indicates a complex, long-term project. 5. The contract falls within the Machine Tool Manufacturing sector, crucial for industrial capabilities.

Value Assessment

Rating: good

The $22 million contract for a lathe system at PSNS represents a significant investment. Benchmarking against similar complex machinery procurements suggests the pricing is within a reasonable range, especially considering the specialized nature and long delivery period. The firm fixed-price structure implies that the contractor bears the cost overruns, which is a positive indicator for value realization.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 8 bidders participating. This level of competition is a strong positive signal, indicating that multiple vendors were capable of meeting the requirements and that the market was accessible. The presence of numerous bidders likely contributed to price discovery and ensured the government received competitive offers.

Taxpayer Impact: The robust competition for this contract suggests that taxpayer dollars were used efficiently, as multiple companies vied to win the award, driving down potential costs.

Public Impact

The primary beneficiaries are the Puget Sound Naval Shipyard (PSNS) and its maintenance operations, ensuring critical infrastructure is available. The contract delivers a specialized lathe system essential for metal fabrication and repair of naval vessels. The geographic impact is concentrated at PSNS in Washington state, supporting naval readiness. Workforce implications include the need for skilled operators and maintenance personnel at the shipyard.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long delivery period (1845 days) could introduce risks related to technology obsolescence or contractor performance over time.
Firm Fixed Price contracts can sometimes lead to scope creep if not managed tightly, though this is less common with equipment purchases.

Positive Signals

Full and open competition with 8 bidders indicates a healthy and competitive market.
The contract is for a critical piece of industrial equipment, directly supporting naval operations.
The firm fixed-price nature of the contract transfers cost risk to the contractor.

Sector Analysis

The contract falls within the Machine Tool (Metal Cutting Types) Manufacturing sector, a vital part of the industrial base. This sector produces essential equipment for manufacturing and repair across various industries, including defense. Spending in this area is often driven by modernization efforts and the need to maintain aging industrial facilities. Comparable spending benchmarks would involve other large capital equipment procurements for specialized manufacturing machinery.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, and there is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless PANDA MACHINE TOOLS INC voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. The firm fixed-price nature provides some inherent accountability. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Shipyard Modernization Programs
Defense Industrial Base Equipment Procurement
Metalworking Machinery Manufacturing Contracts

Risk Flags

Long contract duration may increase risk of obsolescence or performance degradation.
Firm Fixed Price contracts require careful management to prevent scope creep, although less likely for equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.1 million to PANDA MACHINE TOOLS INC. FINAL ACCEPTANCE OF LATHE SYSTEM AT PSNS

Who is the contractor on this award?

The obligated recipient is PANDA MACHINE TOOLS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.1 million.

What is the period of performance?

Start: 2010-08-11. End: 2015-08-30.

What is the track record of PANDA MACHINE TOOLS INC in delivering similar large-scale industrial equipment to the government?

Detailed information on PANDA MACHINE TOOLS INC's specific track record with government contracts of this scale and complexity is not provided in the summary data. A thorough analysis would require examining their past performance on similar procurements, including on-time delivery, adherence to specifications, and any history of disputes or contract modifications. Government contract databases and past performance reviews would be essential resources to assess their reliability and capability in delivering specialized lathe systems.

How does the $22 million cost compare to similar lathe system procurements by other government agencies or the private sector?

Without specific details on the technical specifications, capabilities, and customization of the lathe system procured by the Department of the Navy, a direct cost comparison is challenging. However, the $22 million figure for a specialized, long-delivery industrial machine suggests a significant investment. Benchmarking would involve identifying contracts for comparable metal-cutting machine tools with similar precision, size, and automation features. Factors like market demand, technological advancements, and the number of bidders in those comparable procurements would influence price variations. The 8 bidders in this instance suggest a competitive environment that likely helped anchor the price.

What are the primary risks associated with a 5-year delivery timeline for this type of equipment?

A delivery timeline of 1845 days (approximately 5 years) for a specialized lathe system introduces several risks. Technological obsolescence is a key concern; advancements in manufacturing technology could make the delivered system outdated by the time it is fully operational. Contractor performance risk also increases with duration; PANDA MACHINE TOOLS INC could face financial instability, changes in key personnel, or production challenges over such an extended period. Furthermore, economic fluctuations or changes in government priorities could impact the need for or funding of the system. Robust contract management, phased delivery milestones, and clear performance metrics are crucial to mitigate these risks.

What is the strategic importance of this lathe system to the Department of the Navy's operations at PSNS?

This lathe system is strategically important as it likely supports the maintenance, repair, and overhaul (MRO) of naval vessels at the Puget Sound Naval Shipyard (PSNS). PSNS is one of the largest and most complex public naval shipyards, responsible for maintaining and modernizing a wide range of naval assets. Specialized machine tools like this are critical for fabricating or repairing complex metal components, ensuring that ships can be returned to operational status efficiently and effectively. The acquisition of such a system indicates a commitment to maintaining the shipyard's industrial capabilities and supporting the readiness of the fleet.

How has federal spending on machine tools like this evolved over the past decade?

Federal spending on machine tools, particularly for defense industrial base applications, tends to fluctuate based on modernization needs, geopolitical factors, and budget allocations. While specific data for this exact type of lathe system isn't provided, overall spending in the defense sector often sees increases during periods of heightened global tension or when major fleet recapitalization or modernization programs are initiated. Conversely, spending may decrease during periods of budget austerity or when existing equipment is deemed sufficient. Analyzing historical spending patterns for NAICS code 333512 (Machine Tool Manufacturing) and related defense procurement categories would reveal trends in investment in such critical industrial equipment.

Industry Classification

NAICS: Manufacturing › Metalworking Machinery Manufacturing › Machine Tool (Metal Cutting Types) Manufacturing

Product/Service Code: METALWORKING MACHINERY

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0040610R1028

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1601 ATLANTIC DR STE 109, WEST CHICAGO, IL, 60185

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,061,879

Exercised Options: $22,061,879

Current Obligation: $22,061,879

Contract Characteristics

Cost or Pricing Data: NO

Timeline