DHS awards $1.38M for USCGC HEALY low voltage design, a sole-source contract

Contract Overview

Contract Amount: $1,384,789 ($1.4M)

Contractor: GE Energy Power Conversion USA Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2021-02-03

End Date: 2021-12-31

Contract Duration: 331 days

Daily Burn Rate: $4.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: USCGC HEALY TASK ORDER FOR LOW VOLTAGE DESIGN BOOK.

Place of Performance

Location: CRANBERRY TOWNSHIP, BUTLER County, PENNSYLVANIA, 16066

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Homeland Security obligated $1.4 million to GE ENERGY POWER CONVERSION USA INC. for work described as: USCGC HEALY TASK ORDER FOR LOW VOLTAGE DESIGN BOOK. Key points: 1. The contract focuses on specialized design services for a critical Coast Guard vessel. 2. Sole-source award suggests limited market availability or specific contractor expertise. 3. The fixed-price contract type aims to control costs, but price reasonableness needs scrutiny. 4. Performance duration of 331 days indicates a focused, project-specific scope. 5. The contract falls under Ship Building and Repairing, a niche industrial sector. 6. No small business participation was noted, potentially limiting broader economic impact.

Value Assessment

Rating: fair

Benchmarking the value of this specific design task order is challenging due to its specialized nature and sole-source award. Without competitive bids, it's difficult to definitively assess if the $1.38 million price represents optimal value for money. However, the firm fixed-price structure provides some cost certainty. Further analysis would require comparing the scope of work and deliverables to similar design contracts for naval vessels, which are often complex and expensive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the U.S. Coast Guard did not solicit bids from multiple potential contractors. This approach is typically used when only one source is capable of meeting the requirement, often due to unique capabilities, proprietary technology, or urgent needs. The lack of competition means there was no direct price comparison through bidding, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: For taxpayers, a sole-source award means less assurance of obtaining the best possible price. The government relies on negotiation and justification to ensure fair pricing, but the absence of competitive pressure can reduce downward pressure on costs.

Public Impact

The primary beneficiary is the U.S. Coast Guard, which will receive essential design documentation for the USCGC HEALY. The services delivered are specialized engineering and design for low voltage systems on a major icebreaker. The geographic impact is localized to the design and engineering phase, likely within the contractor's facilities. Workforce implications are primarily for the specialized engineers and designers employed by GE Energy Power Conversion USA Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced incentive for cost efficiency.
Sole-source awards can limit opportunities for other qualified firms to participate in government contracts.
The specialized nature of the work might indicate a limited pool of qualified contractors, requiring careful justification for sole-sourcing.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The award is for a specific, critical vessel (USCGC HEALY), indicating a focused and necessary requirement.
The contractor, GE Energy Power Conversion USA Inc., is likely chosen for specific, recognized expertise in power systems.

Sector Analysis

This contract falls within the broader Ship Building and Repairing sector, which is a critical component of national defense and maritime infrastructure. The market for specialized vessel design, particularly for complex platforms like icebreakers, is relatively niche. Spending in this area is often project-driven and can involve significant investment due to the technical requirements and long lifecycles of such assets. Comparable spending benchmarks would likely be found in other major naval or Coast Guard vessel modernization or construction projects.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have subcontracting requirements for small businesses based on the provided data. The award to a large corporation like GE Energy Power Conversion USA Inc. suggests that the specialized nature of the work may have been beyond the typical capabilities or capacity of small businesses in this specific niche. This means the direct economic benefit to the small business ecosystem from this particular contract is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Coast Guard's contracting and program management offices within the Department of Homeland Security. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified design services. Transparency is limited due to the sole-source nature, but contract award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USCGC HEALY Modernization Projects
Department of Homeland Security Vessel Procurement
Coast Guard Ship Maintenance and Repair Contracts
Naval Engineering Design Services

Risk Flags

Sole-source award requires strong justification for lack of competition.
Price reasonableness needs verification due to non-competitive nature.
Potential for limited small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $1.4 million to GE ENERGY POWER CONVERSION USA INC.. USCGC HEALY TASK ORDER FOR LOW VOLTAGE DESIGN BOOK.

Who is the contractor on this award?

The obligated recipient is GE ENERGY POWER CONVERSION USA INC..

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 $1.4 million.

What is the period of performance?

Start: 2021-02-03. End: 2021-12-31.

What is the specific scope of 'low voltage design' for the USCGC HEALY, and why is it critical?

The 'low voltage design' for the USCGC HEALY likely refers to the electrical systems operating at lower voltage levels (typically below 1000V AC or 1500V DC), which power a wide array of essential ship functions. This includes lighting, control systems, communication equipment, navigation aids, and various auxiliary machinery. Its criticality stems from the fact that these systems are fundamental to the safe and effective operation of the vessel, especially in demanding environments like Arctic operations where the HEALY serves. Reliable low voltage systems ensure that critical functions remain operational, supporting navigation, safety, and mission accomplishment. The design must account for the harsh maritime environment, vibration, and the specific operational needs of an icebreaker.

What specific expertise does GE Energy Power Conversion USA Inc. possess that justified a sole-source award?

GE Energy Power Conversion USA Inc. is a subsidiary of General Electric, a company with extensive experience in power generation, distribution, and conversion technologies across various industries, including marine and defense. For a sole-source award related to low voltage design on a complex vessel like the USCGC HEALY, their expertise likely encompasses specialized knowledge in marine electrical systems, power management, integration of complex electronic components, and compliance with stringent maritime regulations (e.g., classification society rules). They may possess proprietary designs, specific engineering tools, or a proven track record with similar naval or Coast Guard vessels that makes them uniquely qualified. The government would have required detailed justification demonstrating that no other contractor could meet the technical requirements as effectively or efficiently.

How does the firm fixed-price contract type mitigate risks for the government in this sole-source scenario?

In a sole-source scenario, the firm fixed-price (FFP) contract type is a key tool for the government to manage cost risk. Unlike cost-reimbursement contracts, an FFP contract establishes a total price that is not subject to adjustment based on the contractor's cost experience. This means GE Energy Power Conversion USA Inc. bears the risk of cost overruns. The government knows the maximum liability upfront. While the government still needs to ensure the negotiated price is fair and reasonable, the FFP structure incentivizes the contractor to control costs and perform efficiently to maximize their profit margin. This contrasts with a cost-plus contract where the government would absorb cost increases.

What are the potential long-term implications for the USCGC HEALY's operational readiness due to this design task order?

This task order for low voltage design is crucial for the USCGC HEALY's long-term operational readiness. A well-executed design ensures that the vessel's electrical systems are reliable, efficient, and maintainable throughout its service life. Proper design can prevent future failures, reduce downtime for repairs, and ensure the vessel can meet its demanding mission requirements, particularly in harsh Arctic conditions. Conversely, a poorly executed design could lead to recurring electrical problems, increased maintenance costs, potential mission delays or cancellations, and reduced overall service life for the vessel. Therefore, the quality of this design work directly impacts the HEALY's ability to perform its duties effectively and safely for years to come.

Are there historical spending patterns for similar low voltage design services on Coast Guard vessels?

Historical spending patterns for similar low voltage design services on Coast Guard vessels can vary significantly based on the vessel class, size, complexity, and whether the work is part of new construction, a major overhaul, or a specific upgrade. For large, specialized vessels like the Polar-class icebreakers (which the HEALY is), such design work can be substantial. Data from previous contracts for the USCGC Polar Star or other major cutters might offer comparative insights. However, specific task orders for design services, especially when sole-sourced, may not always be directly comparable due to unique technical requirements and market conditions at the time of award. A comprehensive analysis would involve reviewing multiple past contracts for similar scope and vessel types.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HSCG8516RHLYIPP

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 EAST KENSINGER DRIVE SUITE 500, CRANBERRY TOWNSHIP, PA, 16066

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,384,789

Exercised Options: $1,384,789

Current Obligation: $1,384,789

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $768,846

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSCG8517DP45B34

IDV Type: IDC

Timeline