Navy awards $45.2M contract for LPD-17 Class Ship Repair and Alterations to Metro Machine Corp

Contract Overview

Contract Amount: $45,160,202 ($45.2M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2013-11-15

End Date: 2016-09-30

Contract Duration: 1,050 days

Daily Burn Rate: $43.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: IGF::CT::IGF RPRS/ALTS FOR LPD-17 FY-14 PMA

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23707

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $45.2 million to METRO MACHINE CORP. for work described as: IGF::CT::IGF RPRS/ALTS FOR LPD-17 FY-14 PMA Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type (Cost Plus Incentive Fee) aims to incentivize cost control and performance. 3. The duration of 1050 days indicates a significant, long-term maintenance and repair effort. 4. The awardee, Metro Machine Corp., has a track record in shipbuilding and repair. 5. The contract falls under the Ship Building and Repairing NAICS code, a specialized sector. 6. The value of the contract represents a substantial investment in naval asset sustainment.

Value Assessment

Rating: good

The contract value of $45.2 million for ship repair and alterations appears reasonable given the scope and duration. Benchmarking against similar LPD-17 class maintenance contracts would provide a more precise value-for-money assessment. The Cost Plus Incentive Fee structure suggests an effort to manage costs effectively, but the final price will depend on performance and cost outcomes.

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. The presence of 3 bids suggests a moderate level of competition for this specialized service. A higher number of bidders might have led to more aggressive pricing, but the current level of competition is not necessarily indicative of a lack of value.

Taxpayer Impact: Taxpayers benefit from the competitive process which generally drives down costs and ensures the government receives fair market value for services rendered.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the LPD-17 class ships are maintained and modernized. Services delivered include critical repairs and alterations to maintain the operational capability of amphibious transport docks. The geographic impact is likely centered around the East Coast, where the Navy's shipbuilding and repair infrastructure is concentrated, specifically Virginia. Workforce implications include employment for skilled tradespeople in the shipbuilding and repair industry in Virginia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if not closely monitored.
Dependence on a single contractor for a significant period could pose risks if performance issues arise.
The specialized nature of naval ship repair limits the pool of qualified contractors, potentially impacting future competition.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The Cost Plus Incentive Fee structure provides incentives for efficient performance and cost management.
The contractor, Metro Machine Corp., is experienced in this domain, reducing technical risk.
The contract duration allows for sustained focus on maintaining critical naval assets.

Sector Analysis

The shipbuilding and repair sector is a critical component of the U.S. industrial base, supporting both commercial and defense needs. This contract falls within the Ship Building and Repairing (NAICS 336611) industry. Spending in this sector is often characterized by large, complex projects requiring specialized labor and facilities. Comparable spending benchmarks would involve analyzing other major repair and overhaul contracts for naval vessels of similar classes.

Small Business Impact

This contract was not set aside for small businesses, and the awardee, Metro Machine Corp., is not identified as a small business. There is no explicit information regarding subcontracting plans for small businesses within this award. Further analysis would be needed to determine if subcontracting opportunities were mandated or encouraged.

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 built into the Cost Plus Incentive Fee structure, which links contractor profit to performance and cost targets. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

LPD-17 Class Amphibious Transport Dock Ships
Naval Ship Maintenance and Repair Programs
Defense Contract Management Agency (DCMA) Oversight

Risk Flags

Potential for cost growth in CPIF contracts.
Long contract duration may introduce unforeseen risks.
Dependence on specialized labor and facilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.2 million to METRO MACHINE CORP.. IGF::CT::IGF RPRS/ALTS FOR LPD-17 FY-14 PMA

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 $45.2 million.

What is the period of performance?

Start: 2013-11-15. End: 2016-09-30.

What is the historical spending pattern for LPD-17 class ship maintenance and repair by the Department of the Navy?

Analyzing historical spending for LPD-17 class ship maintenance reveals a consistent need for significant investment to ensure fleet readiness. Prior to this $45.2 million contract, the Navy would have allocated funds for routine maintenance, scheduled overhauls, and emergent repairs for the LPD-17 class. These expenditures can fluctuate year-to-year based on the operational tempo of the ships, their age, and the availability of shipyard capacity. Data from sources like the Federal Procurement Data System (FPDS) would show a pattern of awards to various shipyards, including both large prime contractors and specialized repair facilities. The total annual spend can range from tens of millions to hundreds of millions of dollars depending on the number of ships undergoing major work in a given fiscal year. Understanding this pattern helps contextualize the current award as part of a larger, ongoing sustainment strategy.

How does the Cost Plus Incentive Fee (CPIF) structure typically impact contractor performance and final cost for naval repair contracts?

The Cost Plus Incentive Fee (CPIF) contract type is designed to encourage efficiency and cost savings by sharing the benefits of achieving targets between the government and the contractor. In this structure, the final fee (profit) is adjusted based on the contractor's performance against pre-determined cost, schedule, and performance goals. If the contractor completes the work under budget and meets or exceeds performance standards, they earn a higher fee. Conversely, if costs exceed targets, the contractor's fee is reduced, and in some cases, they may even incur a loss. For naval repair contracts, CPIF aims to incentivize contractors to find cost-effective solutions and maintain high-quality workmanship while managing complex repairs. Effective oversight is crucial to ensure the incentive targets are appropriate and that the contractor is genuinely motivated to achieve them, thereby delivering better value to the taxpayer.

What is Metro Machine Corp.'s track record with Department of Defense contracts, particularly in ship repair?

Metro Machine Corp. has a significant track record with the Department of Defense, particularly in the realm of ship repair and shipbuilding. As evidenced by this $45.2 million award for LPD-17 class ship work, the company possesses the necessary certifications, facilities, and expertise to handle complex naval vessel maintenance. Historical data from federal procurement databases would likely show numerous other awards to Metro Machine Corp. for similar services, potentially including repairs, conversions, and alterations for various classes of naval ships. Their past performance on these contracts, including adherence to schedule, budget, and quality standards, would have been a key factor in the Navy's decision to award this current definitive contract. A review of their contract history would reveal the types of vessels worked on, the value of those contracts, and any reported performance issues or commendations.

What are the potential risks associated with a long-duration contract (1050 days) for ship repair and alterations?

Long-duration contracts, such as this 1050-day award for ship repair and alterations, present several potential risks. Firstly, the extended timeline increases the possibility of scope creep, where additional work or modifications are added beyond the original agreement, potentially leading to cost overruns if not managed carefully. Secondly, unforeseen technical challenges or material issues may arise over such a long period, requiring contract modifications and potentially impacting the schedule and budget. Thirdly, there's a risk of contractor performance degradation over time; initial enthusiasm and efficiency might wane, leading to delays or quality issues. Finally, market conditions, such as labor costs or material availability, can change significantly over 1050 days, impacting the contractor's ability to maintain profitability and deliver the service as initially priced. Robust contract management and clear communication channels are essential to mitigate these risks.

How does the 'Ship Building and Repairing' NAICS code (336611) reflect the specialized nature of this contract?

The North American Industry Classification System (NAICS) code 336611, 'Ship Building and Repairing,' precisely categorizes the specialized nature of this contract. This code encompasses establishments primarily engaged in building, repairing, and converting ships and barges. It signifies a highly technical industry requiring specific expertise, skilled labor (welders, pipefitters, electricians, etc.), specialized facilities (dry docks, heavy lifting equipment), and adherence to stringent safety and quality standards mandated by maritime authorities and naval requirements. Contracts falling under this code typically involve large dollar values, long project durations, and complex project management due to the intricate systems and structures involved in naval vessels. The selection of this NAICS code by the Department of the Navy underscores the highly specialized and critical nature of the services being procured.

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: N5005412R0016

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

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: $45,160,202

Exercised Options: $45,160,202

Current Obligation: $45,160,202

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $1,489,167

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline