DoD's $92.7M contract for ship repair awarded to Metro Machine Corp. shows fair value with 2 bids

Contract Overview

Contract Amount: $92,719,171 ($92.7M)

Contractor: Metro Machine Corp

Awarding Agency: Department of Defense

Start Date: 2018-09-10

End Date: 2020-03-24

Contract Duration: 561 days

Daily Burn Rate: $165.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TYCOM OTHER (NON-MANDATORY)

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32228

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $92.7 million to METRO MACHINE CORP for work described as: TYCOM OTHER (NON-MANDATORY) Key points: 1. The contract value of $92.7 million for ship repair services represents a significant investment by the Department of the Navy. 2. Competition dynamics indicate a healthy market with two bidders vying for this contract, suggesting potential for competitive pricing. 3. Risk indicators appear moderate, given the firm-fixed-price contract type which shifts some risk to the contractor. 4. Performance context is crucial; the successful execution of ship repair is vital for naval readiness and operational capability. 5. The sector positioning is within the broader Defense industrial base, specifically focusing on shipbuilding and repair services.

Value Assessment

Rating: good

The contract's value of $92.7 million for ship repair services appears reasonable when benchmarked against similar naval maintenance contracts. The firm-fixed-price structure suggests a clear understanding of costs between the Navy and Metro Machine Corp. While specific per-unit cost data is not provided, the competitive nature of the award implies that the pricing achieved was likely within a market-driven range. Further analysis would involve comparing the scope of work and duration against other similar contracts to confirm value for money.

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 two bidders participating, the competition level suggests a moderately competitive environment. This level of competition is generally sufficient to drive reasonable pricing and encourage efficiency from the awarded contractor. The presence of multiple bidders helps ensure that the government receives proposals that reflect market conditions.

Taxpayer Impact: The full and open competition with two bidders suggests that taxpayers benefited from a competitive bidding process, likely resulting in a fair market price for the essential ship repair services.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the operational readiness of its fleet through timely and effective ship repairs. Services delivered include critical maintenance, repair, and potentially modernization of naval vessels, ensuring their seaworthiness and combat effectiveness. The geographic impact is centered in Florida (stamped as 'FL'), likely supporting naval bases and operations within that region. Workforce implications include employment opportunities for skilled tradespeople, technicians, and support staff within the maritime repair industry in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen complexities arise during repairs, despite the firm-fixed-price structure.
Dependence on a single contractor for a significant duration could lead to performance issues if not closely monitored.
Ensuring the quality of repairs meets stringent naval standards requires robust oversight.

Positive Signals

Firm-fixed-price contract type helps control costs and provides budget certainty.
Award to an established contractor like Metro Machine Corp. suggests a degree of confidence in their capabilities.
Full and open competition indicates a fair process and potential for competitive pricing.

Sector Analysis

The shipbuilding and repair sector is a critical component of the U.S. defense industrial base, supporting naval operations and national security. This contract falls within the broader category of industrial services supporting the military. The market for ship repair is often specialized, with a limited number of firms possessing the necessary infrastructure, expertise, and security clearances to perform work on naval vessels. Spending in this sector is directly tied to the size and operational tempo of the Navy's fleet.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award. However, larger prime contractors often engage small businesses for specialized services or components, which could indirectly benefit them.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring Metro Machine Corp. to deliver specified services within the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair Contracts
Defense Industrial Base Services
Shipbuilding and Repair Industry Spending
Department of the Navy Procurement

Risk Flags

Potential for schedule delays
Quality assurance concerns
Scope creep risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $92.7 million to METRO MACHINE CORP. TYCOM OTHER (NON-MANDATORY)

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 $92.7 million.

What is the period of performance?

Start: 2018-09-10. End: 2020-03-24.

What is Metro Machine Corp.'s track record with the Department of the Navy for similar ship repair services?

Metro Machine Corp. has a history of performing contracts with the Department of the Navy, including ship repair and maintenance services. While this specific $92.7 million contract is a significant award, their experience in the sector suggests a foundational understanding of naval requirements. A deeper dive into their past performance reviews, any prior contract disputes, and the scale of previous awards would provide a more comprehensive picture of their reliability and capability. Examining data on on-time delivery, adherence to specifications, and overall customer satisfaction from previous Navy contracts would be essential for a complete assessment of their track record.

How does the $92.7 million contract value compare to other ship repair contracts awarded by the Navy in recent years?

The $92.7 million contract value for ship repair services awarded to Metro Machine Corp. is a substantial figure, placing it in the mid-to-large range for individual repair contracts. To benchmark its value effectively, it needs to be compared against contracts of similar scope, duration, and vessel types. For instance, major overhauls or modernization projects can easily exceed this amount, while routine maintenance might be significantly less. Analyzing a portfolio of recent Navy ship repair awards, considering factors like the number of bids received and the final negotiated price relative to initial estimates, would help determine if this contract represents a fair market price or if it deviates significantly from established benchmarks.

What are the primary risk indicators associated with this firm-fixed-price contract for ship repair?

The primary risk indicator for a firm-fixed-price (FFP) contract, even with a reputable contractor, is the potential for unforeseen issues arising during the repair process that could lead to cost overruns for the contractor, potentially impacting their motivation or ability to complete the work to standard. While FFP shifts cost risk to the contractor, the Navy still faces risks related to quality of work, schedule delays if the contractor struggles, and potential disputes over contract scope. Robust quality assurance and diligent project management by the Navy are crucial to mitigate these risks. The limited competition (two bidders) could also be a minor risk if the chosen contractor faces significant challenges, as alternative options might be limited.

How effective is the 'full and open competition' strategy in ensuring value for money for naval ship repair services?

The 'full and open competition' strategy is generally considered the most effective method for ensuring value for money in government contracting, including for naval ship repair. By allowing all responsible sources to compete, it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. In this case, with two bidders, the competition was sufficient to drive a market-based price. However, the effectiveness is also dependent on the clarity of the solicitation, the evaluation criteria, and the government's ability to accurately define the scope of work. When competition is robust, it incentivizes contractors to offer their best prices and performance to win the contract.

What are the historical spending patterns for ship building and repairing services by the Department of the Navy?

Historical spending patterns for ship building and repairing services by the Department of the Navy are substantial and fluctuate based on fleet size, modernization needs, and geopolitical factors. The Navy consistently allocates billions of dollars annually to maintain and upgrade its fleet. This spending encompasses a wide range of activities, from routine maintenance and dry-docking to complex overhauls and new construction. Trends often show increased spending during periods of heightened global tension or when new classes of ships are introduced. Analyzing historical data reveals that contracts for repair services are frequently awarded through competitive processes, with a mix of large, multi-year contracts and smaller, task-order-based awards.

What is the significance of the North American Industry Classification System (NAICS) code 336611 for this contract?

The NAICS code 336611, 'Ship Building and Repairing,' is highly significant as it precisely categorizes the industry and services covered by this contract. This classification is crucial for statistical purposes, allowing the government and industry analysts to track spending, market trends, and economic activity within this specific sector. For the Department of the Navy, using this code ensures that procurement efforts are targeted towards companies with the specialized capabilities required for shipbuilding and repair. It also helps in benchmarking contract values and understanding the competitive landscape against other firms operating under the same NAICS code.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4002716R0028

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 599 WONDERWOOD DR, JACKSONVILLE, FL, 32233

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

Financial Breakdown

Contract Ceiling: $93,035,461

Exercised Options: $92,719,171

Current Obligation: $92,719,171

Actual Outlays: $-5,164,565

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4002717D1009

IDV Type: IDC

Timeline