Navy awards $38.3M contract for ship repair, with 3 bidders competing

Contract Overview

Contract Amount: $38,277,885 ($38.3M)

Contractor: Metro Machine Corp

Awarding Agency: Department of Defense

Start Date: 2014-06-19

End Date: 2015-08-21

Contract Duration: 428 days

Daily Burn Rate: $89.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF USS TORNADO (PC 14), DPMA

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32228

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $38.3 million to METRO MACHINE CORP for work described as: IGF::CT::IGF USS TORNADO (PC 14), DPMA Key points: 1. Contract value appears reasonable given the scope of ship repair services. 2. Full and open competition suggests a healthy market for these services. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration aligns with typical ship maintenance cycles. 5. Geographic location in Florida may indicate specialized repair capabilities. 6. No small business set-aside was utilized, potentially limiting small business participation.

Value Assessment

Rating: good

The contract value of approximately $38.3 million for ship repair services seems within a reasonable range for major vessel maintenance. Benchmarking against similar contracts for naval ship repair would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for controlling costs, assuming the scope of work was well-defined. The number of bidders (3) suggests a competitive environment, which typically leads to better pricing.

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. With three bidders participating, the competition level suggests a reasonably robust market for these specialized ship repair services. This level of competition is generally expected to drive prices toward market rates and encourage efficiency from the winning contractor.

Taxpayer Impact: The full and open competition and multiple bidders indicate that taxpayer dollars were likely used efficiently, as the government received competitive offers for the required services.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensured by the maintenance of the USS TORNADO. Services delivered include essential ship repair and maintenance to keep the vessel in operational condition. The geographic impact is concentrated in Florida, likely supporting regional maritime industry jobs and infrastructure. Workforce implications include employment for skilled tradespeople in the shipbuilding and repair sector in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor to underbid and seek change orders if scope is not perfectly defined.
Reliance on a single contractor for a specific period could create dependency.
Limited visibility into the specific repair tasks performed without further detail.

Positive Signals

Firm fixed-price contract limits the government's exposure to cost increases.
Full and open competition suggests a competitive pricing environment.
Contract awarded to a known entity (METRO MACHINE CORP) may imply prior performance history.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval readiness and national security. This contract falls within the broader maritime services industry, which includes a range of activities from new construction to maintenance and overhaul. Spending in this sector is often driven by defense appropriations and the need to maintain aging fleets. Comparable spending benchmarks would involve analyzing other naval vessel repair contracts awarded by the Department of the Navy.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract were likely limited to those who could compete directly with larger firms or were not explicitly sought through subcontracting provisions. The absence of set-asides or subcontracting goals may reduce the direct economic impact on the small business ecosystem for this particular award.

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 inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency is generally provided through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Department of Defense Procurement
Vessel Maintenance and Repair
Maritime Industry Support

Risk Flags

Potential for scope creep if initial assessment is incomplete.
Dependence on specific skilled labor availability in the region.
Risk of unforeseen structural or mechanical issues discovered during repair.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 million to METRO MACHINE CORP. IGF::CT::IGF USS TORNADO (PC 14), DPMA

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 $38.3 million.

What is the period of performance?

Start: 2014-06-19. End: 2015-08-21.

What is the track record of METRO MACHINE CORP in performing similar ship repair contracts for the Department of Defense?

Assessing the track record of METRO MACHINE CORP requires a review of their past performance on similar contracts. 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 positive performance history on comparable naval vessel repair contracts would indicate a lower risk for this award. Conversely, a history of cost overruns, schedule delays, or quality issues on similar projects would raise concerns about their capability to execute this contract successfully within the specified terms and budget.

How does the awarded price compare to the estimated cost or independent government cost estimate for this ship repair work?

To determine if the awarded price represents good value, it should be compared against the government's independent cost estimate (ICE) or the contractor's proposed cost breakdown, if available. A significant difference between the awarded price and the ICE could indicate either an exceptionally competitive bid or potential issues with the government's estimate or the contractor's pricing strategy. Without access to the ICE or detailed cost proposals, a definitive value assessment is challenging. However, the fact that three bidders competed suggests the price is likely market-driven and reflects a competitive landscape.

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

Key performance indicators for ship repair contracts typically focus on schedule adherence, quality of work, and adherence to technical specifications. For this contract, KPIs might include timely completion of repair milestones, successful completion of sea trials post-repair, compliance with all technical directives and safety standards, and the absence of defects or rework required after final acceptance. The firm fixed-price nature of the contract incentivizes the contractor to meet these KPIs to avoid penalties or deductions, while the government's quality assurance representatives would monitor progress against these metrics.

What is the historical spending trend for ship repair services by the Department of the Navy over the last five years?

Historical spending on ship repair by the Department of the Navy is substantial and fluctuates based on fleet readiness requirements, aging vessel maintenance needs, and budget allocations. Over the last five years, the Navy has consistently allocated billions of dollars annually towards ship maintenance, repair, and overhaul. This spending is influenced by factors such as the number of ships in the active fleet, the operational tempo, and the planned service life extensions for various vessel classes. Analyzing specific spending trends would require accessing detailed budget documents and procurement data from the Department of the Navy.

Are there any specific risks associated with the geographic location (Florida) for this ship repair contract?

The geographic location in Florida for this ship repair contract presents both potential advantages and considerations. Florida has a robust maritime infrastructure and a skilled workforce experienced in naval and commercial ship repair, which can be beneficial for contract execution. However, potential risks could include susceptibility to weather events like hurricanes, which might cause project delays or require specific contingency planning. Additionally, the cost of labor and materials in certain Florida regions might be higher compared to other locations, potentially impacting the overall cost-effectiveness if not managed properly.

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: N4002714R0019

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 2999 MAYPORT ROAD, JACKSONVILLE, FL, 32233

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,277,885

Exercised Options: $38,277,885

Current Obligation: $38,277,885

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline