Navy awards $59.8M contract for complex shipbuilding and repair services to Metro Machine Corp

Contract Overview

Contract Amount: $59,813,102 ($59.8M)

Contractor: Metro Machine Corp

Awarding Agency: Department of Defense

Start Date: 2021-09-02

End Date: 2022-10-15

Contract Duration: 408 days

Daily Burn Rate: $146.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMPLEX FFP DO JOHN S. MCCAIN 2C1 SRA

Place of Performance

Location: EVERETT, SNOHOMISH County, WASHINGTON, 98207

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $59.8 million to METRO MACHINE CORP for work described as: COMPLEX FFP DO JOHN S. MCCAIN 2C1 SRA Key points: 1. Contract value of $59.8 million for shipbuilding and repair services. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Firm Fixed Price contract type indicates predictable costs for the government. 4. Delivery order issued under a larger contract vehicle. 5. Contract duration of 408 days. 6. Performance expected in Washington state.

Value Assessment

Rating: good

The contract value of $59.8 million appears reasonable for complex shipbuilding and repair services, especially given the firm fixed-price nature which transfers risk to the contractor. Benchmarking against similar large-scale naval repair contracts would provide a more precise value-for-money assessment. The specific services rendered under this delivery order will be key to a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and allowed to submit proposals. The presence of two bidders suggests a moderate level of competition for this specific delivery order. A higher number of bidders typically leads to more competitive pricing and a wider range of technical solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through a robust bidding process, ensuring the government receives the best value.

Public Impact

The U.S. Navy benefits from the specialized shipbuilding and repair services provided. Ensures the operational readiness and maintenance of naval vessels. Services are expected to be performed in Washington state, supporting the regional maritime industrial base. Potential for job creation and support for skilled labor in the shipbuilding and repair sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs despite firm fixed price.
Dependence on a single contractor for this specific delivery order's execution.
Risk of delays impacting naval operational schedules if performance issues arise.

Positive Signals

Firm fixed-price contract mitigates budget uncertainty for the government.
Full and open competition suggests a competitive environment that should yield good value.
Awarded to a contractor with experience in shipbuilding and repair.

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 industrial machinery manufacturing and repair industry, which is characterized by specialized labor, complex supply chains, and significant capital investment. Spending in this sector is heavily influenced by defense budgets and geopolitical factors. Comparable spending benchmarks would involve analyzing other large naval vessel maintenance and construction contracts.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions. Therefore, it is unlikely that small businesses were specifically targeted for this award. Subcontracting opportunities for small businesses may exist if Metro Machine Corp. chooses to engage them for specialized services, but this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is facilitated by public contract databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Potential for performance delays
Contract complexity requires careful oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.8 million to METRO MACHINE CORP. COMPLEX FFP DO JOHN S. MCCAIN 2C1 SRA

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 $59.8 million.

What is the period of performance?

Start: 2021-09-02. End: 2022-10-15.

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

Metro Machine Corp. has a history of performing work for the Department of Defense, including contracts related to ship repair and maintenance. Analyzing their past performance ratings, on-time delivery rates, and any past disputes or contract modifications on similar projects would provide a clearer picture of their reliability and capability. Specific details on their performance on previous complex FFP DO contracts for the Navy would be particularly relevant to assess their suitability for this award and the associated risks.

How does the awarded amount compare to the estimated cost or budget for this service?

The awarded amount of $59.8 million is a definitive figure, but without access to the government's independent cost estimate or the contractor's proposed pricing breakdown, a direct comparison for value-for-money is challenging. The firm fixed-price nature suggests the contractor believes this amount is sufficient to cover costs and provide a profit. Benchmarking against historical data for similar scope and complexity of work on naval vessels, adjusted for inflation and specific technical requirements, would be necessary to determine if this represents a competitive price.

What are the specific risks associated with this firm fixed-price delivery order?

While firm fixed-price (FFP) contracts are designed to mitigate cost risk for the government, they can introduce other risks. For the contractor, underestimating the complexity or duration of the work could lead to financial losses. For the government, the primary risks with FFP are ensuring the contractor has the capability to perform the work to specification and on time, and that the price agreed upon is fair. If the contractor faces unforeseen technical challenges or supply chain disruptions, it could lead to delays or quality issues, even if the price is fixed.

What is the typical performance period and scope for a delivery order of this nature?

This delivery order has a duration of 408 days, indicating a substantial period for complex shipbuilding and repair work. Delivery orders under larger indefinite-delivery/indefinite-quantity (IDIQ) contracts can vary significantly in scope, from minor repairs to major overhauls or construction phases. Given the contract value and duration, this likely involves significant work, potentially including hull repairs, system upgrades, or component replacements on a naval vessel. The specific scope would be detailed in the delivery order's statement of work.

How has spending in the shipbuilding and repair sector for the Navy trended over the past five years?

Spending in the shipbuilding and repair sector for the Navy has generally been robust, driven by modernization efforts, fleet maintenance requirements, and strategic shipbuilding programs. While specific figures fluctuate annually based on budget allocations and program priorities, there is a consistent and significant investment in maintaining and expanding naval capabilities. Factors such as geopolitical tensions, the aging of the current fleet, and the development of new vessel classes all influence year-over-year spending trends in this critical defense sub-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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002417R4434

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 423 PACIFIC AVE STE 200, BREMERTON, WA, 98337

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

Financial Breakdown

Contract Ceiling: $59,813,102

Exercised Options: $59,813,102

Current Obligation: $59,813,102

Actual Outlays: $54,640,404

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $44,320

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002418D4412

IDV Type: IDC

Timeline