Navy awards $30.4M for USS Laboon (DDG 58) FY18 SRA, with Metro Machine Corp. as prime

Contract Overview

Contract Amount: $30,433,307 ($30.4M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2018-08-01

End Date: 2019-04-12

Contract Duration: 254 days

Daily Burn Rate: $119.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS LABOON (DDG 58) FY18 SRA

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $30.4 million to METRO MACHINE CORP. for work described as: USS LABOON (DDG 58) FY18 SRA Key points: 1. Value for money assessed through firm-fixed-price contract type, aiming for cost certainty. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators include contract duration and delivery order type, which can introduce performance uncertainties. 4. Performance context is a Ship Repair Availability (SRA) for a specific vessel, requiring specialized skills. 5. Sector positioning within shipbuilding and repairing, a critical defense industrial base segment.

Value Assessment

Rating: good

The contract value of $30.4 million for the USS Laboon (DDG 58) FY18 SRA appears reasonable given the scope of ship repair. Benchmarking against similar availabilities for Arleigh Burke-class destroyers would provide a more precise assessment, but the firm-fixed-price structure suggests an effort to control costs. The award to Metro Machine Corp. indicates a competitive selection process, which generally leads to better pricing than sole-source awards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit offers. The presence of two bids suggests a moderate level of competition for this specific availability. While two bidders are better than one, a higher number of bidders could potentially drive prices down further and offer a wider range of technical solutions.

Taxpayer Impact: A full and open competition, even with two bidders, generally provides a better opportunity for taxpayers to receive competitive pricing compared to limited or sole-source procurements.

Public Impact

The primary beneficiary is the U.S. Navy, ensuring the operational readiness of the USS Laboon (DDG 58). Services delivered include ship maintenance, repair, and modernization to extend the vessel's service life. Geographic impact is likely concentrated around the East Coast, where the Navy's Atlantic Fleet is based. Workforce implications include employment for skilled tradespeople in the maritime repair industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the delivery order nature of the award.
Scope creep could increase costs if not managed tightly under the firm-fixed-price contract.
Dependence on a single contractor for a critical repair availability carries inherent risk.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust selection process.
Award to an established ship repair company indicates relevant experience.

Sector Analysis

The shipbuilding and repairing sector (NAICS 336611) is a vital component of the U.S. defense industrial base. This contract falls within the ship maintenance and repair sub-sector, which is crucial for maintaining the operational readiness of naval fleets. Spending in this area can fluctuate based on fleet modernization programs and the age of vessels requiring upkeep. Comparable spending benchmarks would typically involve analyzing other SRAs for similar ship classes.

Small Business Impact

The contract was not set aside for small businesses, and the prime contractor, Metro Machine Corp., is not typically classified as a small business. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether Metro Machine Corp. actively seeks small business subcontractors for specialized services or supplies.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services within agreed-upon timelines and quality standards. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics may not be publicly disclosed.

Related Government Programs

Naval Ship Maintenance and Repair Contracts
Shipbuilding and Repairing Industry
Arleigh Burke-class Destroyer Maintenance
Department of Defense Ship Availability Contracts

Risk Flags

Potential for schedule slippage
Risk of scope creep
Contractor performance uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.4 million to METRO MACHINE CORP.. USS LABOON (DDG 58) FY18 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 $30.4 million.

What is the period of performance?

Start: 2018-08-01. End: 2019-04-12.

What is Metro Machine Corp.'s track record with similar naval repair contracts?

Metro Machine Corp. has a history of performing repair and maintenance services for various naval vessels. While specific details on past performance for USS Laboon (DDG 58) or similar Arleigh Burke-class destroyers are not provided in this data snippet, their selection suggests they met the Navy's requirements for this type of availability. A deeper dive into their contract history, including past performance reviews and any disputes or claims, would offer a more comprehensive understanding of their reliability and capability in executing complex ship repair projects. Examining their portfolio of work on DDG-class ships specifically would be most relevant.

How does the $30.4 million award compare to the cost of similar ship repair availabilities?

Direct comparison of the $30.4 million award requires access to data on similar Ship Repair Availabilities (SRAs) for Arleigh Burke-class destroyers. Factors such as the scope of work (e.g., hull maintenance, propulsion system overhauls, combat system upgrades), the specific shipyard's overhead rates, and prevailing market conditions at the time of award significantly influence costs. Generally, firm-fixed-price contracts aim for competitive pricing, but without specific benchmarks for comparable SRAs, it's difficult to definitively state if this represents excellent, fair, or questionable value. The fact that it was a full and open competition with two bidders suggests a degree of market validation.

What are the primary risks associated with this specific contract?

The primary risks associated with this contract include potential schedule delays, as ship repair availabilities are often complex and can encounter unforeseen issues. Scope creep is another risk, where the required work might expand beyond the initial contract terms, potentially leading to cost overruns if not managed meticulously under the firm-fixed-price structure. Furthermore, the availability of specialized labor and materials can pose a risk, impacting the timely completion of repairs. The reliance on a single contractor for a critical availability also introduces performance risk if the contractor faces financial difficulties or operational challenges.

How effective is the firm-fixed-price contract type in ensuring program effectiveness for ship repairs?

The firm-fixed-price (FFP) contract type is generally effective in ensuring cost control and predictability for ship repairs, as it shifts the risk of cost overruns to the contractor. This encourages the contractor to manage resources efficiently and adhere to the defined scope of work. For program effectiveness, FFP can be beneficial when the scope of work is well-defined and unlikely to change significantly. However, if unforeseen technical issues arise during the repair that necessitate a change in scope, the FFP structure can sometimes lead to contract modifications or disputes, potentially impacting the overall schedule and effectiveness if not handled proactively. Clear technical specifications and robust oversight are crucial complements to FFP for maximizing effectiveness.

What are the historical spending patterns for USS Laboon (DDG 58) maintenance and repair?

Historical spending data for the USS Laboon (DDG 58) prior to this FY18 SRA would provide context on its maintenance needs and associated costs. Analyzing previous repair availabilities, component replacements, and routine maintenance expenditures would reveal trends in its upkeep. Significant deviations from historical spending patterns in this FY18 award might warrant further investigation into the scope of work or pricing. Without access to that historical data, it's challenging to assess if this $30.4 million award represents a typical or an unusually high/low expenditure for the vessel's maintenance cycle.

What is the significance of the 'Ship Building and Repairing' NAICS code (336611) in the context of federal spending?

The 'Ship Building and Repairing' NAICS code (336611) represents a critical sector within the U.S. industrial base, particularly for national defense. Federal spending under this code primarily supports the maintenance, modernization, and construction of naval vessels and other maritime assets. This sector is characterized by high barriers to entry, specialized labor requirements, and significant capital investment. Federal contracts in this area are essential for ensuring fleet readiness, projecting power, and maintaining technological superiority at sea. Spending fluctuations often correlate with defense budgets, fleet modernization initiatives, and the lifecycle of naval assets.

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: N0002415R4405

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

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: $30,686,900

Exercised Options: $30,433,307

Current Obligation: $30,433,307

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002416D4408

IDV Type: IDC

Timeline