DoD awards $143M firm-fixed-price contract for fabricated structural metal to Vigor Works LLC

Contract Overview

Contract Amount: $14,327,748 ($14.3M)

Contractor: Vigor Works LLC

Awarding Agency: Department of Defense

Start Date: 2003-12-30

End Date: 2009-10-30

Contract Duration: 2,131 days

Daily Burn Rate: $6.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200403!040223!1700!BW21A !NAVAL SURFACE WARFARE CENTER CAR!N0016704C0021 !A!N! !N! ! !20031230!20051229!009025891!009025891!009025891!N!OREGON IRON WORKS INC !9700 SE LAWNFIELD ROAD !CLACKAMAS !OR!97015!13450!005!41!CLACKAMAS !CLACKAMAS !OREGON !+000005991214!N!N!000000599121!AD24!RDTE/SERVICES-DEMO/VALID !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !332312!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!Z!Y!Z! ! !N!B!N!N! ! !B! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: CLACKAMAS, CLACKAMAS County, OREGON, 97015

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to VIGOR WORKS LLC for work described as: 200403!040223!1700!BW21A !NAVAL SURFACE WARFARE CENTER CAR!N0016704C0021 !A!N! !N! ! !20031230!20051229!009025891!009025891!009025891!N!OREGON IRON WORKS INC !9700 SE LAWNFIELD ROAD !CLACKAMAS !OR!97015!13450!005!41!CLACKAMAS !CLAC… Key points: 1. Contract awarded for fabricated structural metal, a key component in shipbuilding and infrastructure. 2. The contract was not competed, raising questions about potential cost savings and market fairness. 3. A long duration of over 6 years suggests a significant, ongoing need for these services. 4. The contractor, Vigor Works LLC, is a significant player in the shipbuilding and industrial services sector. 5. Awarded by the Naval Surface Warfare Center, indicating a defense-related application. 6. The contract's value of $143M represents substantial federal investment in this specific industrial capability.

Value Assessment

Rating: fair

The contract value of $143,277,480 for fabricated structural metal over a period of approximately 6 years appears to be within a reasonable range for large-scale defense industrial support. However, without specific details on the scope of work, materials, and labor involved, a precise value-for-money assessment is challenging. Benchmarking against similar large-scale fabrication contracts for naval applications would be necessary for a more definitive evaluation. The firm-fixed-price structure shifts risk to the contractor, which can be beneficial for the government if the contractor manages costs effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source procurement, meaning it was not competed among multiple vendors. Sole-source awards are typically justified when only one vendor possesses the necessary capabilities, security clearances, or when urgency dictates a direct award. The lack of competition means the government did not benefit from a bidding process that could have driven down prices through market forces. This approach may be justified if Vigor Works LLC is uniquely qualified or if the specific requirements of the Naval Surface Warfare Center could only be met by this contractor.

Taxpayer Impact: The absence of competition for this substantial contract means taxpayers may not have received the lowest possible price. Without competitive bidding, there's a reduced incentive for the contractor to offer the most cost-effective solution, potentially leading to higher overall expenditure.

Public Impact

The primary beneficiaries are entities within the Department of Defense, likely naval programs requiring fabricated structural metal components. Services delivered include the manufacturing and supply of fabricated structural metal, essential for various defense platforms and infrastructure. The geographic impact is primarily centered around the contractor's facilities in Oregon, but the defense applications have national security implications. Workforce implications include employment opportunities at Vigor Works LLC and its supply chain, particularly in skilled trades related to metal fabrication.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a large-value contract raises concerns about potential overpayment and reduced incentive for cost efficiency.
The long contract duration could lead to price escalation if not managed carefully, despite the fixed-price nature.
Sole-source awards can limit opportunities for other capable small and large businesses to participate in federal contracting.

Positive Signals

The firm-fixed-price contract type transfers cost overrun risk to the contractor, protecting the government from unexpected price increases.
Awarding to an established contractor like Vigor Works LLC suggests a reliance on proven capabilities and potentially faster delivery.
The contract supports critical defense industrial base capabilities, ensuring the availability of essential components for naval operations.

Sector Analysis

The fabricated structural metal manufacturing sector (NAICS 332312) is a critical component of the industrial base, supplying essential materials for construction, infrastructure, and defense applications. The market is characterized by a mix of large, specialized fabricators and smaller regional players. Federal spending in this sector often supports shipbuilding, vehicle manufacturing, and base infrastructure development. This contract, valued at over $143 million, represents a significant portion of federal spending within this specific sub-sector, likely supporting specialized naval requirements.

Small Business Impact

This contract was not set aside for small businesses, and the awardee, Vigor Works LLC, is a large business. There is no indication of specific subcontracting plans for small businesses within the provided data. The lack of a small business set-aside for this sole-source award means that opportunities for small businesses to participate in this specific contract are limited, potentially impacting the small business industrial base that supports larger defense contractors.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Naval Surface Warfare Center and the Defense Contract Management Agency (DCMA). The DCMA is responsible for ensuring contractor performance, quality control, and compliance with contract terms. As a sole-source award, the justification and approval process would have undergone specific review. Transparency is limited due to the lack of competitive bidding, but contract award data is publicly available through federal procurement databases.

Related Government Programs

Naval shipbuilding and repair contracts
Defense industrial base support contracts
Fabricated metal products procurement
Naval Surface Warfare Center procurement vehicles
Department of Defense sole-source awards

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to VIGOR WORKS LLC. 200403!040223!1700!BW21A !NAVAL SURFACE WARFARE CENTER CAR!N0016704C0021 !A!N! !N! ! !20031230!20051229!009025891!009025891!009025891!N!OREGON IRON WORKS INC !9700 SE LAWNFIELD ROAD !CLACKAMAS !OR!97015!13450!005!41!CLACKAMAS !CLACKAMAS !OREGON !+000005991214!N!N!000000599121!AD24!RDTE/SERVICES-DEMO/VALID !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !332312!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is VIGOR WORKS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.3 million.

What is the period of performance?

Start: 2003-12-30. End: 2009-10-30.

What specific types of fabricated structural metal components were procured under this contract, and what are their intended applications within naval systems?

The provided data indicates the contract is for 'Fabricated Structural Metal Manufacturing' (NAICS 332312) and was awarded to OREGON IRON WORKS INC (now Vigor Works LLC). While the specific components are not detailed, fabricated structural metal in a naval context typically includes hull sections, deck structures, bulkheads, frames, weapon mounts, and other load-bearing or structural elements essential for the construction and repair of warships and support vessels. These components are critical for the integrity, functionality, and survivability of naval platforms. The Naval Surface Warfare Center often procures such items for new ship construction, major refits, or specialized maritime systems development.

Can the $143 million contract value be benchmarked against similar sole-source awards for fabricated structural metal to assess value for money?

Benchmarking this $143 million contract against similar sole-source awards is challenging without access to detailed scope of work and pricing for comparable contracts. Sole-source awards inherently lack the price discovery mechanism of competition. However, the value suggests a significant scale of fabrication, likely for major naval platforms or extensive infrastructure projects. To assess value, one would need to compare the unit costs of specific fabricated items (e.g., per ton of steel, per structural assembly) against historical data for similar naval contracts, considering factors like material costs, labor rates, complexity, and overhead. The firm-fixed-price nature shifts risk to the contractor, which can be a positive indicator if the price reflects efficient execution.

What were the specific justifications for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The provided data simply states the contract type as 'NOT COMPETED' and the award as 'sole-source'. Specific justifications for sole-source awards typically fall under categories such as urgency, unique capabilities, or lack of available sources. For a contract of this magnitude and duration (2003-2009), the justification would likely involve demonstrating that only OREGON IRON WORKS INC (Vigor Works LLC) possessed the necessary technical expertise, specialized facilities, security clearances, or production capacity required by the Naval Surface Warfare Center for the specific structural metal fabrication needs. A thorough review by the contracting agency would have been required to ensure no other responsible sources could meet the requirement, or that competition would not be in the government's best interest.

What is the historical spending pattern with OREGON IRON WORKS INC (Vigor Works LLC) by the Naval Surface Warfare Center and the Department of Defense?

This specific contract (N0016704C0021) represents a significant award of $143 million to OREGON IRON WORKS INC (now Vigor Works LLC) by the Naval Surface Warfare Center, spanning from December 2003 to October 2009 (original end date was Dec 2005, but it extended). Historical data would reveal if this was a pattern of sole-source awards or if the company has a broader contracting relationship with the Navy and DoD. Vigor Works LLC is known for its extensive work in shipbuilding and complex industrial fabrication, often securing large contracts. Analyzing prior and subsequent contracts would indicate the extent of their role as a key supplier for naval structural components and whether this sole-source award was an anomaly or part of a sustained relationship.

What are the potential risks associated with a sole-source award of this magnitude, particularly concerning contractor performance and long-term cost implications?

The primary risk with a sole-source award of this magnitude is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to optimize performance or innovate. Without competition, the government relies heavily on the contractor's integrity and efficiency. Potential risks include schedule delays if the contractor overcommits, quality issues if oversight is insufficient, and higher-than-market costs. While the firm-fixed-price structure mitigates cost overrun risk for the government, the initial price might be higher than if it were competitively bid. Long-term cost implications could arise if this sole-source relationship becomes the default, potentially limiting future competitive opportunities and locking the government into a specific supplier.

Industry Classification

NAICS: Manufacturing › Architectural and Structural Metals Manufacturing › Fabricated Structural Metal Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Vigor Industrial LLC (UEI: 153727818)

Address: 9700 SE LAWNFIELD RD, CLACKAMAS, OR, 97015

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline