Coast Guard awards $3.5M for cycloconverter installation on USCGC HEALY

Contract Overview

Contract Amount: $3,498,054 ($3.5M)

Contractor: GE Energy Power Conversion USA Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2021-11-02

End Date: 2022-09-30

Contract Duration: 332 days

Daily Burn Rate: $10.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: USCGC HEALY TASK ORDER AWARD FOR CYCLOCONVERTER INSTALLATION.

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98134

State: Washington Government Spending

Plain-Language Summary

Department of Homeland Security obligated $3.5 million to GE ENERGY POWER CONVERSION USA INC. for work described as: USCGC HEALY TASK ORDER AWARD FOR CYCLOCONVERTER INSTALLATION. Key points: 1. Value for money is difficult to assess due to limited competition and lack of detailed cost breakdowns. 2. The contract was not competed, raising questions about potential price overruns. 3. The sole-source nature of this award presents a risk indicator for future procurements. 4. Performance context is limited to the installation of a specific component on a vessel. 5. This contract falls within the Ship Building and Repairing sector, supporting naval infrastructure.

Value Assessment

Rating: fair

The contract value of $3.5 million for a cycloconverter installation is difficult to benchmark without comparable sole-source awards or detailed cost breakdowns. The firm-fixed-price nature provides some cost certainty, but the lack of competition limits the ability to assess if the price represents a fair market value. Further analysis would require understanding the specific technical requirements and the uniqueness of the solution provided by GE Energy Power Conversion USA Inc.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or proprietary knowledge. The lack of competition means there was no opportunity for price discovery through a bidding process, which could potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. This could result in a less efficient use of public funds compared to a competed procurement.

Public Impact

The U.S. Coast Guard benefits from the upgrade of essential equipment on the USCGC HEALY. The service delivered is the installation of a cycloconverter, a critical component for vessel propulsion or power systems. The geographic impact is localized to the vessel's operational areas, primarily supporting its missions. Workforce implications are likely limited to specialized technicians involved in the installation and integration process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value for money.
Lack of transparency in cost breakdown makes independent value assessment challenging.
Potential for vendor lock-in if this is a proprietary system.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award is for a specific, necessary component for vessel operation.
Contract awarded to a known entity in the energy conversion sector.

Sector Analysis

This contract falls within the broader shipbuilding and repairing industry, specifically focusing on specialized equipment for naval vessels. The market for such specialized components can be niche, with a limited number of qualified suppliers. Benchmarking spending in this area is challenging due to the unique nature of vessel upgrades and the proprietary technologies involved. The total federal spending on ship maintenance and repair is substantial, but this specific component's cost is a small fraction.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. Therefore, it is unlikely to have a direct impact on the small business ecosystem. The prime contractor, GE Energy Power Conversion USA Inc., is a large business, and the nature of the work suggests specialized expertise typically found in larger firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Coast Guard's contracting and program management offices. As a sole-source award, it may receive heightened scrutiny to ensure the justification for non-competition is sound. Transparency is limited by the lack of public cost breakdowns and competitive bidding. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USCGC HEALY Operations
U.S. Coast Guard Vessel Maintenance
Naval Ship Systems Modernization
Marine Electrical Systems

Risk Flags

Sole-source award
Lack of competitive bidding
Limited cost transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $3.5 million to GE ENERGY POWER CONVERSION USA INC.. USCGC HEALY TASK ORDER AWARD FOR CYCLOCONVERTER INSTALLATION.

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 $3.5 million.

What is the period of performance?

Start: 2021-11-02. End: 2022-09-30.

What is the specific function of a cycloconverter in the context of the USCGC HEALY, and why was this particular vendor selected on a sole-source basis?

A cycloconverter is a type of power electronic device used to convert AC electricity from one frequency and voltage to another, often without the need for a DC intermediate stage. In the context of a vessel like the USCGC HEALY, it could be crucial for controlling the speed and power of propulsion motors, especially if they are AC induction motors requiring variable frequency power. The sole-source award to GE Energy Power Conversion USA Inc. likely stems from the proprietary nature of their cycloconverter technology, specific integration requirements with the HEALY's existing power systems, or a lack of other qualified vendors capable of meeting the stringent naval specifications. Detailed justification for the sole-source procurement would typically be documented by the agency.

How does the $3.5 million cost compare to similar cycloconverter installations or upgrades on other naval or coast guard vessels?

Direct cost comparisons for specialized marine cycloconverter installations are difficult to establish publicly due to the niche nature of the equipment and the proprietary aspects often involved. Sole-source awards, by definition, lack a competitive benchmark. However, the cost of power conversion and propulsion system components for large vessels can range significantly, from hundreds of thousands to millions of dollars, depending on power ratings, complexity, and integration requirements. Without access to detailed specifications, installation scope, and comparable sole-source justifications, it's challenging to definitively state whether $3.5 million is high or low. The firm-fixed-price nature suggests the government sought cost certainty, but the lack of competition limits the ability to assess true value for money.

What are the potential risks associated with a sole-source award for critical vessel components like a cycloconverter?

The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competitive pressure. The government may not achieve the best possible value for its money. Another risk is vendor lock-in, where the reliance on a single supplier for a critical component can make future upgrades, repairs, or replacements more expensive and complex. Furthermore, if the sole-source vendor experiences financial difficulties or ceases operations, it could severely impact the vessel's operational readiness and maintenance. Ensuring robust contract oversight and performance management becomes even more critical in sole-source situations.

What is the track record of GE Energy Power Conversion USA Inc. in supplying similar equipment to the U.S. Coast Guard or Department of Defense?

GE Energy Power Conversion USA Inc. (formerly Converteam) has a history of supplying power conversion and propulsion systems for various maritime applications, including naval and commercial vessels. They are known for their expertise in high-power electrical systems. While specific details of their past contracts with the U.S. Coast Guard or DoD for cycloconverters on vessels like the HEALY are not readily available in this dataset, their established presence in the sector suggests they are a recognized supplier for such specialized equipment. A deeper dive into federal procurement databases would be needed to fully assess their contract history and performance with government agencies.

What are the implications of this $3.5 million award on the overall spending for USCGC HEALY modernization or maintenance over its lifecycle?

This $3.5 million award represents a specific capital investment for a critical component upgrade on the USCGC HEALY. Its impact on the vessel's overall lifecycle cost depends on the expected lifespan of the cycloconverter, its reliability, and its contribution to operational efficiency or reduced maintenance needs compared to the system it replaces. If this upgrade enhances performance or reduces fuel consumption, it could lead to long-term savings. However, it also adds to the total expenditure for the vessel. Understanding the context of the HEALY's overall modernization plan and maintenance budget is necessary to fully grasp the significance of this single award.

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: $3,498,054

Exercised Options: $3,498,054

Current Obligation: $3,498,054

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $124,425

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSCG8517DP45B34

IDV Type: IDC

Timeline