USCG Awards $127M Contract for Polar Icebreaker to Enhance Arctic Operations and National Security

Contract Overview

Contract Amount: $126,935,367 ($126.9M)

Contractor: Offshore Service Vessels, L.L.C.

Awarding Agency: Department of Homeland Security

Start Date: 2024-11-20

End Date: 2025-05-31

Contract Duration: 192 days

Daily Burn Rate: $661.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE USCG IS AWARDING A CONTRACT FOR A COMMERCIALLY AVAILABLE POLAR ICEBREAKER (CAPI) TO ENHANCE NATIONAL SECURITY AND ARCTIC OPERATIONS. INCLUDES VESSEL REACTIVATION, ABS CERTIFICATION, AND POST-DELIVERY SUPPORT FOR POLAR MISSION READINESS.

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39581

State: Mississippi Government Spending

Plain-Language Summary

Department of Homeland Security obligated $126.9 million to OFFSHORE SERVICE VESSELS, L.L.C. for work described as: THE USCG IS AWARDING A CONTRACT FOR A COMMERCIALLY AVAILABLE POLAR ICEBREAKER (CAPI) TO ENHANCE NATIONAL SECURITY AND ARCTIC OPERATIONS. INCLUDES VESSEL REACTIVATION, ABS CERTIFICATION, AND POST-DELIVERY SUPPORT FOR POLAR MISSION READINESS. Key points: 1. The contract focuses on acquiring a commercially available polar icebreaker, crucial for expanding US presence and capabilities in the Arctic. 2. Key activities include vessel reactivation, ABS certification, and post-delivery support, ensuring mission readiness. 3. The award is a definitive contract with a firm fixed price, indicating clear cost expectations. 4. This acquisition addresses a critical need for polar-capable assets, enhancing national security and operational reach.

Value Assessment

Rating: good

The contract value of $126.9M for a polar icebreaker appears reasonable given the specialized nature and capabilities required. Benchmarking against similar large vessel acquisitions would provide further context, but the scope of work (reactivation, certification, support) suggests a significant investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, suggesting a sole-source award. This limits price discovery through competitive bidding and may result in higher costs than a competed procurement. The justification for sole-source is not provided but is critical for assessing value.

Taxpayer Impact: The lack of competition could lead to higher taxpayer costs compared to a scenario where multiple vendors vied for the contract.

Public Impact

Enhances US national security by strengthening presence in the strategically important Arctic region. Improves operational capabilities for the US Coast Guard in polar environments, enabling critical missions. Supports economic interests by facilitating access to Arctic resources and trade routes. Addresses a long-standing capability gap in US polar icebreaking capacity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing.
Sole-source award requires strong justification to ensure fair value.
Long-term operational and maintenance costs are not detailed.

Positive Signals

Addresses a critical national security and operational need.
Focuses on a commercially available solution for potentially faster deployment.
Includes essential support and certification for mission readiness.

Sector Analysis

The shipbuilding and repair sector (NAICS 336611) is capital-intensive and often involves complex, high-value contracts. Government procurements in this sector, especially for specialized vessels like icebreakers, are critical for national defense and infrastructure but can be prone to cost overruns due to complexity and limited vendor pools.

Small Business Impact

This contract was awarded to Offshore Service Vessels, L.L.C., and there is no indication that small businesses were involved as prime contractors or significant subcontractors. The nature of large vessel construction and repair often favors larger, established companies.

Oversight & Accountability

The award of a sole-source contract necessitates robust oversight from the Department of Homeland Security and the US Coast Guard to ensure the contractor meets all requirements and that the pricing is fair and reasonable. Transparency regarding the justification for the sole-source award is crucial for accountability.

Related Government Programs

Ship Building and Repairing
Department of Homeland Security Contracting
U.S. Coast Guard Programs

Risk Flags

Sole-source award limits competitive pricing.
Potential for cost overruns in specialized shipbuilding.
Lack of transparency on justification for non-competition.
Long-term operational costs not detailed in award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $126.9 million to OFFSHORE SERVICE VESSELS, L.L.C.. THE USCG IS AWARDING A CONTRACT FOR A COMMERCIALLY AVAILABLE POLAR ICEBREAKER (CAPI) TO ENHANCE NATIONAL SECURITY AND ARCTIC OPERATIONS. INCLUDES VESSEL REACTIVATION, ABS CERTIFICATION, AND POST-DELIVERY SUPPORT FOR POLAR MISSION READINESS.

Who is the contractor on this award?

The obligated recipient is OFFSHORE SERVICE VESSELS, L.L.C..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $126.9 million.

What is the period of performance?

Start: 2024-11-20. End: 2025-05-31.

What is the specific justification for awarding this contract on a sole-source basis, and how was the price determined to be fair and reasonable without competition?

The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically require detailed documentation, such as a Justification and Approval (J&A), outlining the unique capabilities of the vendor or the urgency of the requirement. Without this, it's difficult to assess if the government received the best possible value. Price reasonableness is usually determined through cost analysis, comparison to historical data, or market research, even in sole-source situations.

What are the projected long-term operational and maintenance costs associated with this polar icebreaker, and how do they compare to alternative solutions?

While the initial award covers vessel reactivation and support, the total lifecycle cost is a significant factor. Understanding the projected operational expenses, maintenance schedules, and potential repair needs over the vessel's lifespan is crucial for a comprehensive value assessment. Comparing these long-term costs against the acquisition and operational costs of other potential solutions, such as leasing or acquiring different types of vessels, provides a fuller picture of the taxpayer impact.

How will the performance and effectiveness of this polar icebreaker be measured against its intended mission objectives in the Arctic?

Defining clear performance metrics and Key Performance Indicators (KPIs) is essential to evaluate the effectiveness of this investment. These metrics should directly relate to the icebreaker's ability to support national security, conduct Arctic operations, and achieve mission readiness. Regular reporting and independent assessments will be necessary to track whether the vessel meets its intended operational capabilities and provides the expected return on investment for the government.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 70Z02324R93260002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 16201 E MAIN ST, CUT OFF, LA, 70345

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

Financial Breakdown

Contract Ceiling: $126,935,367

Exercised Options: $126,935,367

Current Obligation: $126,935,367

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline