Department of the Navy awards $103.5M for ship maintenance, with Metro Machine Corp. securing the contract

Contract Overview

Contract Amount: $103,484,456 ($103.5M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2019-11-18

End Date: 2020-12-17

Contract Duration: 395 days

Daily Burn Rate: $262.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD DELIVERY ORDER N50054-19-F-L022

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $103.5 million to METRO MACHINE CORP. for work described as: AWARD DELIVERY ORDER N50054-19-F-L022 Key points: 1. The contract value represents a significant investment in maintaining naval assets. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The firm-fixed-price contract type shifts performance risk to the contractor. 4. The delivery order was awarded for a 395-day period, indicating a focused maintenance effort. 5. The North American Industry Classification System (NAICS) code 336611 points to ship building and repairing. 6. The contract was awarded to Metro Machine Corp., a company with a presence in Virginia.

Value Assessment

Rating: good

Benchmarking the value of this specific delivery order against broader ship maintenance contracts is challenging without more granular data on the scope of work. However, the $103.5 million award for a 395-day period suggests a substantial maintenance undertaking. The firm-fixed-price structure implies that the contractor is responsible for managing costs to meet the agreed-upon price, which can be advantageous for the government if costs are controlled effectively. Further analysis would require comparing the price to similar maintenance tasks on comparable vessels.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This approach is generally favored as it maximizes the pool of potential offerors and is expected to foster competitive pricing. The number of bidders is not specified in the provided data, which would be crucial for a complete assessment of the competition's intensity and its impact on price discovery.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining the best value by encouraging multiple companies to offer competitive bids, potentially driving down costs.

Public Impact

Naval readiness and operational capability are enhanced through the maintenance of critical assets. The contract supports the U.S. Navy's fleet maintenance requirements. The primary beneficiary is the Department of Defense, ensuring the availability of its vessels. The contract likely supports skilled labor within the shipbuilding and repair sector in Virginia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work expands beyond initial estimates.
Dependence on a single contractor for a critical maintenance period could pose risks if performance issues arise.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a robust bidding process that could lead to better pricing.
The contract duration is clearly defined, allowing for focused project management.

Sector Analysis

The ship building and repairing sector (NAICS 336611) is a critical component of the U.S. industrial base, supporting both commercial and defense needs. This contract falls squarely within the defense segment of this industry, focusing on the maintenance and repair of naval vessels. Spending in this sector can fluctuate based on fleet modernization programs, maintenance cycles, and geopolitical demands. Comparable spending benchmarks would typically involve analyzing the total annual budget allocated by the Navy for ship maintenance and repair across its fleet.

Small Business Impact

The provided data indicates that small business set-asides were not utilized for this contract (ss: false, sb: false). This suggests that the contract was not specifically targeted to encourage small business participation. While large prime contractors may engage small businesses as subcontractors, there is no explicit indication of such requirements or benefits for the small business ecosystem in this specific award. Further investigation into subcontracting plans would be needed to assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically 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 obligates the contractor to deliver the specified services within the agreed price. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Department of Defense Procurement
Fleet Readiness Programs

Risk Flags

Potential for cost overruns if scope is not clearly defined.
Risk of performance delays impacting naval readiness.
Dependence on contractor's technical expertise and capacity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.5 million to METRO MACHINE CORP.. AWARD DELIVERY ORDER N50054-19-F-L022

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 $103.5 million.

What is the period of performance?

Start: 2019-11-18. End: 2020-12-17.

What is the historical spending pattern of the Department of the Navy with Metro Machine Corp. for similar ship maintenance services?

Analyzing historical spending patterns between the Department of the Navy and Metro Machine Corp. for similar ship maintenance services is crucial for assessing value and contractor performance. Without access to a comprehensive contract database detailing all past awards, it's difficult to provide specific figures. However, a review of past contracts would reveal the frequency, value, and duration of previous engagements. Consistent awards suggest a strong working relationship and potentially competitive pricing over time. Conversely, a lack of recent or similar contracts might indicate a new or evolving relationship, requiring closer scrutiny of performance and pricing for this current award. Understanding this history helps contextualize the $103.5 million award and Metro Machine Corp.'s established role within the Navy's maintenance infrastructure.

How does the awarded price of $103.5 million compare to the average cost of similar ship maintenance delivery orders awarded by the Navy in the past three years?

To assess the value for money, the awarded price of $103.5 million needs to be benchmarked against comparable contracts. This involves identifying other delivery orders for ship maintenance awarded by the Department of the Navy within a similar timeframe (e.g., the last three years) that involve vessels of comparable size, type, and complexity. Factors such as the scope of work (e.g., routine maintenance vs. major overhauls), the specific shipyard capabilities required, and the prevailing market rates for labor and materials in the relevant geographic region would need to be considered. If this $103.5 million award is significantly higher or lower than the average for similar services, it could indicate either exceptional value or potential overpricing/underbidding. A detailed analysis would require access to a broader dataset of Navy contracts.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this delivery order, and how is contractor performance being monitored?

The specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) for this delivery order are not detailed in the provided award data. However, for a contract of this magnitude and importance to naval readiness, it is highly probable that the Department of the Navy has established clear performance metrics. These typically include adherence to schedule (on-time completion of maintenance milestones), quality of work (meeting technical specifications and standards), safety compliance, and potentially cost control within the firm-fixed-price framework. Monitoring would likely involve regular progress meetings between Navy contracting officers and Metro Machine Corp. representatives, site inspections, and formal performance reviews at key project stages. Failure to meet these KPIs/SLAs could result in contractual remedies, including financial penalties or termination.

What is the potential impact of this contract on the overall readiness and operational availability of the specific naval assets it is intended to support?

This $103.5 million delivery order is directly linked to maintaining and repairing specific naval assets, thereby playing a crucial role in ensuring their operational readiness and availability. Timely and effective completion of the maintenance work under this contract will directly contribute to the Navy's ability to deploy these vessels for their intended missions. Conversely, any delays, subpar quality of work, or unforeseen issues could negatively impact the readiness posture of the affected assets, potentially leading to mission delays or reduced operational capacity. The 395-day duration suggests a significant maintenance cycle, underscoring its importance in keeping these vessels mission-capable.

Given the firm-fixed-price nature of the contract, what mechanisms are in place to manage potential scope creep and ensure the contractor does not incur excessive costs that could lead to claims?

The firm-fixed-price (FFP) contract structure places the primary responsibility for cost control on the contractor, Metro Machine Corp. However, mechanisms to manage potential scope creep and prevent excessive costs are still essential. These typically include a robust change management process, where any proposed modifications to the original scope of work must be formally documented, evaluated for impact on cost and schedule, and approved by the contracting officer. The Navy's project management team would closely monitor the work to ensure it aligns strictly with the contract's specifications. If scope creep does occur and is approved, the contract would be modified accordingly, potentially with an increase in price and/or schedule. Without such controls, an FFP contract could still lead to disputes or claims if the contractor argues that unforeseen conditions or government-directed changes necessitated additional work beyond the original agreement.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

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: $104,061,549

Exercised Options: $103,484,456

Current Obligation: $103,484,456

Actual Outlays: $-21,521,098

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $41,764,152

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002416D4413

IDV Type: IDC

Timeline