Vigor Marine LLC awarded $55.5M contract for ship repair, highlighting shipbuilding and repair sector activity

Contract Overview

Contract Amount: $55,478,973 ($55.5M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2017-02-07

End Date: 2017-12-22

Contract Duration: 318 days

Daily Burn Rate: $174.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SUPPLIES/SERVICES - USS FRANK CABLE ROH/DD IGF::OT::IGF BARRETT, N104B2

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97217

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $55.5 million to VIGOR MARINE LLC for work described as: SUPPLIES/SERVICES - USS FRANK CABLE ROH/DD IGF::OT::IGF BARRETT, N104B2 Key points: 1. Contract value of $55.5M indicates significant investment in naval readiness and maintenance. 2. Full and open competition suggests a potentially competitive bidding process for this service. 3. The definitive contract type implies a clear scope of work and established terms. 4. Fixed-price contract structure shifts performance risk to the contractor. 5. The contract duration of 318 days suggests a substantial repair or overhaul project. 6. Awarded by the Department of the Navy, this contract supports critical fleet maintenance operations.

Value Assessment

Rating: good

The contract value of $55.5 million for ship repair services appears within a reasonable range for major naval vessel maintenance. Benchmarking against similar contracts for large vessel overhauls or repairs would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract suggests that the contractor has a strong incentive to manage costs effectively, which can be beneficial for the government if the scope is well-defined. However, without specific details on the scope of work and the condition of the USS FRANK CABLE, a definitive value assessment is challenging.

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. The presence of two bidders suggests a moderate level of competition for this specific contract. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition, even with two bidders, provides taxpayers with some assurance that the government sought competitive pricing. This approach aims to prevent inflated costs and ensure that taxpayer funds are used efficiently by leveraging market forces.

Public Impact

The primary beneficiaries are the U.S. Navy fleet, ensuring operational readiness of the USS FRANK CABLE. Services delivered include essential ship repair and maintenance, crucial for maintaining naval capabilities. The geographic impact is likely centered around the naval facility where the repairs are conducted, potentially benefiting the local economy through employment and support services. Workforce implications include employment for skilled tradespeople in the shipbuilding and repair sector, such as welders, electricians, and pipefitters.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work expands beyond the initial definitive contract terms.
Risk of delays if unforeseen issues arise during the repair process that are not adequately addressed in the contract.
Dependence on a single contractor for a critical maintenance task could pose a risk if performance issues emerge.

Positive Signals

Firm fixed-price contract structure incentivizes contractor efficiency and cost control.
Full and open competition, even with limited bidders, suggests an effort to obtain competitive pricing.
The definitive contract type provides a clear framework for the services to be rendered.

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 under NAICS code 336611 (Ship Building and Repairing). The market is characterized by specialized facilities, skilled labor, and significant capital investment. Government contracts, particularly from the Department of Defense, represent a substantial portion of the demand in this sector, driving innovation and maintaining essential capabilities. Comparable spending benchmarks for major naval vessel overhauls can range from tens to hundreds of millions of dollars, depending on the vessel class and scope of work.

Small Business Impact

This contract does not indicate any specific small business set-aside provisions, as indicated by 'sb': false. The prime contractor, VIGOR MARINE LLC, is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within this data. The absence of set-asides means that opportunities for small businesses to participate in this specific contract may be limited unless they are part of the supply chain or subcontracted by the prime.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

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

Risk Flags

Potential for limited competition
Risk of schedule delays
Uncertainty of scope definition in definitive contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.5 million to VIGOR MARINE LLC. SUPPLIES/SERVICES - USS FRANK CABLE ROH/DD IGF::OT::IGF BARRETT, N104B2

Who is the contractor on this award?

The obligated recipient is VIGOR MARINE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $55.5 million.

What is the period of performance?

Start: 2017-02-07. End: 2017-12-22.

What is the track record of Vigor Marine LLC in performing similar naval repair contracts?

Assessing Vigor Marine LLC's track record requires examining their past performance on similar contracts, particularly those with the Department of the Navy or other military branches. This would involve reviewing past performance evaluations, any contract disputes or claims, and their history of delivering complex repair and maintenance services on time and within budget. A review of publicly available contract databases and performance reports would be necessary to determine their reliability and expertise in handling projects of this scale and complexity. Without specific historical data on Vigor Marine LLC's performance on comparable naval contracts, it is difficult to definitively assess their capability for this specific award.

How does the $55.5 million contract value compare to the average cost of similar naval vessel repair projects?

The $55.5 million contract value for the repair of the USS FRANK CABLE needs to be benchmarked against similar naval vessel repair projects to assess its value for money. The average cost can vary significantly based on the class of the vessel, the extent of the repairs required (e.g., routine maintenance vs. major overhaul), the specific shipyard, and prevailing market conditions. Contracts for major overhauls of large naval vessels can easily run into tens or even hundreds of millions of dollars. To provide a precise comparison, one would need to identify contracts for similar vessel types (e.g., support ships, cruisers) with comparable scopes of work awarded within a similar timeframe. This analysis would help determine if the awarded amount is competitive and reflects fair market value.

What are the primary risks associated with this definitive contract for ship repair?

The primary risks associated with this definitive contract for ship repair include potential scope creep, where unforeseen issues discovered during the repair process necessitate additional work not initially defined, potentially leading to cost overruns or schedule delays. Performance risk is also a factor, as the quality and timeliness of the repairs directly impact the operational readiness of the USS FRANK CABLE. Given it's a firm fixed-price contract, the contractor bears the risk of cost overruns if their estimates are inaccurate or if unexpected complications arise. Furthermore, reliance on a single contractor for a critical maintenance task introduces a dependency risk; any significant performance issues or financial instability of Vigor Marine LLC could jeopardize the project's completion.

How effective is the 'full and open competition' approach when only two bids are received?

The effectiveness of 'full and open competition' when only two bids are received is debatable and context-dependent. While it adheres to the principle of allowing all responsible sources to compete, a low number of bidders can limit price discovery and potentially lead to less competitive pricing than if more firms had participated. The government may not achieve the best possible value if the competition is not robust. Factors contributing to a low number of bidders could include the specialized nature of the services, the geographic location of the work, or the specific requirements of the solicitation. To assess effectiveness, one would need to analyze the bid prices relative to estimates and market rates, and consider if the two bidders were highly qualified and capable.

What is the historical spending pattern for ship repair services by the Department of the Navy?

Historical spending patterns for ship repair services by the Department of the Navy are substantial, reflecting the continuous need to maintain a large and complex fleet. The Navy consistently allocates billions of dollars annually towards ship maintenance, repair, and modernization. This spending is distributed across various contract types, including time-and-materials, cost-plus, and firm-fixed-price, and awarded through different competition levels. Spending fluctuates based on fleet readiness requirements, shipbuilding programs, and budget allocations. Analyzing historical data reveals trends in contract values, average durations, and the prevalence of different service providers, providing context for individual contract awards like the one to Vigor Marine LLC.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3220516R4406

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC (UEI: 153727818)

Address: 5555 N. CHANNEL AVE, PORTLAND, OR, 97217

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $57,800,632

Exercised Options: $55,478,973

Current Obligation: $55,478,973

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline