Navy awards $42.9M for base repair, with 2 bids received under full and open competition

Contract Overview

Contract Amount: $42,917,917 ($42.9M)

Contractor: Metro Machine Corp.

Awarding Agency: Department of Defense

Start Date: 2020-04-20

End Date: 2021-08-01

Contract Duration: 468 days

Daily Burn Rate: $91.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TYCOM BASE REPAIR ITEMS

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $42.9 million to METRO MACHINE CORP. for work described as: TYCOM BASE REPAIR ITEMS Key points: 1. Value for money assessed through competitive bidding process. 2. Competition dynamics indicate a potentially limited but open market for these specialized services. 3. Risk indicators include contract duration and fixed-price nature, which can shift risk to the contractor. 4. Performance context is tied to ship maintenance and repair readiness. 5. Sector positioning within naval shipbuilding and repair services.

Value Assessment

Rating: good

The contract value of $42.9 million for base repair items appears reasonable given the scope and duration. With two bids received, the pricing is likely competitive, though a direct benchmark against similar contracts would provide a more definitive assessment. The firm-fixed-price structure suggests the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Two bids were received, indicating a moderate level of competition for this specific requirement. While two bidders suggest some level of market interest, a higher number of bids would typically lead to more aggressive pricing and potentially better value.

Taxpayer Impact: The full and open competition, even with two bidders, provides a baseline for price discovery and ensures that taxpayer funds are being used in a manner that seeks competitive pricing.

Public Impact

Naval bases in Virginia benefit from essential repair and maintenance services. Ensures operational readiness of naval assets by maintaining critical infrastructure. Supports the regional economy through contract work and potential employment opportunities in the shipbuilding and repair sector. Directly impacts the Department of the Navy's ability to maintain its fleet and shore facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during repairs, despite fixed-price contract.
Dependence on a limited number of bidders could impact future competition.
Scope creep could occur if not managed tightly, increasing costs beyond initial estimates.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Awarded under full and open competition, promoting market access.
Contract duration aligns with the scope of work for base repair.

Sector Analysis

This contract falls within the broader shipbuilding and repair sector, specifically focusing on naval base infrastructure. The market for naval repair and maintenance is specialized, often dominated by a few key players with the necessary security clearances and expertise. Spending in this area is critical for maintaining national defense capabilities and ensuring the operational readiness of naval fleets.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms. Accountability is maintained through the firm-fixed-price structure and delivery order process. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Base Infrastructure Maintenance
Shipbuilding and Repair Services
Defense Infrastructure Contracts
Naval Facilities Engineering Command Contracts

Risk Flags

Limited competition (2 bidders)
Potential for cost overruns if scope is not well-defined
Contractor performance history not detailed

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.9 million to METRO MACHINE CORP.. TYCOM BASE REPAIR ITEMS

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 $42.9 million.

What is the period of performance?

Start: 2020-04-20. End: 2021-08-01.

What is the track record of Metro Machine Corp. with Department of Defense contracts, particularly for base repair?

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 on similar base repair or infrastructure projects would provide insight into their reliability, quality of work, and ability to manage costs effectively. A review of their contract history might reveal any past issues with performance, delivery, or cost overruns. However, without specific data on their past performance on analogous contracts, it's difficult to definitively assess their track record for this specific type of work beyond the general information available.

How does the awarded price of $42.9 million compare to similar base repair contracts awarded by the Navy?

Benchmarking this $42.9 million award against similar base repair contracts requires access to a broader dataset of comparable procurements. Factors such as the specific types of repairs (e.g., structural, electrical, plumbing), the size and complexity of the facilities, the geographic location, and the contract duration significantly influence pricing. Given that this was a firm-fixed-price contract awarded under full and open competition with two bids, the price is likely competitive within its specific niche. However, without comparative data on the scope of work and market conditions for similar projects, a precise value-for-money assessment is challenging.

What are the primary risks associated with a firm-fixed-price contract for base repair, and how are they mitigated?

The primary risk with a firm-fixed-price (FFP) contract for base repair is that the contractor may incur costs exceeding the agreed-upon price, potentially leading to financial distress or a desire to cut corners on quality to maintain profitability. Mitigation strategies employed by the government include thorough pre-award scope definition, robust oversight during contract performance, and clear specifications. The government also benefits from cost certainty, as the final price is fixed unless changes are formally negotiated. The contractor's incentive is to perform efficiently to maximize profit, but this must be balanced against maintaining quality standards, which are monitored through inspections and performance evaluations.

How effective is the 'full and open competition' strategy when only two bids are received for a significant contract?

The effectiveness of 'full and open competition' when only two bids are received can be debated. On one hand, it ensures that the process is open to all potential bidders, preventing artificial barriers to entry. On the other hand, a low number of bids might suggest market limitations, contractor collusion concerns, or insufficient outreach. While two bids provide a basis for price comparison, a higher number of bidders typically fosters more aggressive competition, potentially leading to better pricing and innovation. The government's strategy here likely aimed to maximize competition within the existing market constraints for specialized naval repair services.

What is the historical spending trend for 'Ship Building and Repairing' (NAICS 336611) by the Department of the Navy?

Historical spending data for NAICS code 336611 ('Ship Building and Repairing') by the Department of the Navy typically shows significant and consistent investment. This sector is crucial for maintaining naval readiness and national security, thus attracting substantial annual appropriations. Spending can fluctuate based on fleet modernization programs, maintenance cycles, and specific shipbuilding or repair needs. Analyzing trends over several fiscal years would reveal patterns in contract awards, average contract values, and the distribution of spending across different types of services within this category, providing context for the current $42.9 million award.

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: $50,801,043

Exercised Options: $42,917,917

Current Obligation: $42,917,917

Actual Outlays: $10,860,565

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $10,870,576

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002416D4408

IDV Type: IDC

Timeline