Coast Guard awards $3.4M for USCGC Hamilton propulsion overhaul, a sole-source contract

Contract Overview

Contract Amount: $3,419,919 ($3.4M)

Contractor: Rolls-Royce Solutions America Inc

Awarding Agency: Department of Homeland Security

Start Date: 2025-11-10

End Date: 2026-03-31

Contract Duration: 141 days

Daily Burn Rate: $24.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USCGC HAMILTON (WMSL-753) MAIN PROPULSION DIESEL ENGINE 16,000 HOUR OVERHAUL

Place of Performance

Location: ALAMEDA, ALAMEDA County, CALIFORNIA, 94501

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $3.4 million to ROLLS-ROYCE SOLUTIONS AMERICA INC for work described as: USCGC HAMILTON (WMSL-753) MAIN PROPULSION DIESEL ENGINE 16,000 HOUR OVERHAUL Key points: 1. The contract focuses on a critical maintenance task for a major Coast Guard asset. 2. Sole-source award suggests limited market options or specific contractor expertise required. 3. The duration of the work is substantial, indicating a complex and thorough overhaul. 4. The fixed-price nature of the contract aims to control costs for this specific service. 5. The contract is managed by the Department of Homeland Security, overseeing Coast Guard operations.

Value Assessment

Rating: fair

Benchmarking the value of this specific engine overhaul is challenging without comparable sole-source contracts for the same engine model and service scope. The price of $3.4 million for a 16,000-hour overhaul appears significant, but its fairness depends heavily on the complexity of the work, parts required, and the specialized labor involved. Given the sole-source nature, there's a reduced opportunity for competitive pressure to drive down costs, making independent cost verification crucial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source is available or when there is a compelling justification for excluding full and open competition. The lack of competition means that the Coast Guard did not benefit from multiple bids, which could have led to a lower price or better terms.

Taxpayer Impact: Taxpayers may face a higher cost due to the absence of competitive bidding, as the government did not leverage market forces to secure the best possible price.

Public Impact

Ensures the operational readiness of the USCGC Hamilton, a vital asset for national security and maritime law enforcement. Supports the continued performance of the Coast Guard's missions, including search and rescue, interdiction, and port security. The overhaul will be performed in Alameda, California, impacting the local maritime industrial base. Requires specialized technical skills, potentially benefiting skilled technicians and engineers in the marine propulsion sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition raises questions about whether the most cost-effective solution was secured.
The significant dollar amount warrants close scrutiny of the work performed and parts used.

Positive Signals

Contract ensures critical maintenance for a key national security asset.
Fixed-price contract provides cost certainty for this specific overhaul.
Awarding to Rolls-Royce Solutions America Inc. leverages specialized knowledge of the propulsion system.

Sector Analysis

The marine propulsion and repair sector is a specialized industry supporting naval and maritime operations. Contracts for major overhauls of complex systems like ship engines are often high-value and require specific technical expertise. The market for such services can be concentrated, with a few key players possessing the necessary certifications and experience, which can lead to sole-source or limited competition awards.

Small Business Impact

This contract does not appear to involve a small business set-aside. Given the specialized nature of the work and the sole-source award to a large corporation, there are likely limited direct subcontracting opportunities for small businesses unless specifically incorporated by the prime contractor. The overall impact on the small business ecosystem for this specific contract is likely minimal.

Oversight & Accountability

Oversight for this contract will be managed by the U.S. Coast Guard, under the Department of Homeland Security. Accountability will be ensured through contract performance monitoring, adherence to the fixed-price terms, and inspection of the completed overhaul work. Transparency may be limited due to the sole-source nature, but contract details and performance reports should be accessible through federal procurement databases.

Related Government Programs

USCGC Hamilton Operations
Major Ship Maintenance Contracts
Rolls-Royce Marine Engine Services
Coast Guard Fleet Readiness

Risk Flags

Sole-source award
High dollar value for a single maintenance task
Potential for cost overruns without competitive pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $3.4 million to ROLLS-ROYCE SOLUTIONS AMERICA INC. USCGC HAMILTON (WMSL-753) MAIN PROPULSION DIESEL ENGINE 16,000 HOUR OVERHAUL

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE SOLUTIONS AMERICA 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 $3.4 million.

What is the period of performance?

Start: 2025-11-10. End: 2026-03-31.

What is the track record of Rolls-Royce Solutions America Inc. in performing similar major engine overhauls for the U.S. Coast Guard or other naval vessels?

Rolls-Royce Solutions America Inc. is a known provider of propulsion systems and services for various maritime applications, including naval and coast guard vessels. Their track record typically involves supplying and maintaining engines for large ships. For the U.S. Coast Guard, they are the original equipment manufacturer for the main propulsion diesel engines on the Legend-class National Security Cutters (NSCs), which includes the USCGC Hamilton (WMSL-753). This specific contract is for a 16,000-hour overhaul, a significant maintenance milestone. While specific details of past overhauls of this magnitude might be proprietary, Rolls-Royce's role as the OEM suggests they possess the specialized knowledge and access to proprietary technical data required for such complex maintenance. Historical performance data, if available through government databases or reports, would provide further insight into their reliability and efficiency in executing such critical tasks.

How does the $3.4 million cost compare to previous overhauls of similar propulsion systems on Coast Guard vessels?

Direct cost comparisons for major engine overhauls are often difficult due to variations in scope, engine model, hours of operation, required parts, and the specific maintenance provider. The $3.4 million figure for a 16,000-hour overhaul on the USCGC Hamilton's main propulsion diesel engine is substantial. However, without access to detailed breakdowns of labor, parts, and overhead, or comparable sole-source contracts for identical services on similar vessels (like other NSCs), it's challenging to definitively benchmark its value. The fact that this is a sole-source award to the original equipment manufacturer (OEM) may also mean the price reflects specialized expertise and proprietary information rather than competitive market rates. Further analysis would require comparing this to the OEM's standard service pricing or any available historical data on similar overhauls, acknowledging the limitations of sole-source procurements.

What are the primary risks associated with a sole-source award for critical ship maintenance, and how are they mitigated in this contract?

The primary risks associated with a sole-source award for critical ship maintenance include potentially higher costs due to the lack of competitive bidding, limited leverage in negotiating terms, and a reduced incentive for the contractor to optimize efficiency. There's also a risk that the contractor might not possess the absolute best or most innovative solution available in the broader market. In this contract, the U.S. Coast Guard mitigates these risks by specifying a Firm Fixed Price (FFP) contract, which caps the government's financial exposure and places the cost risk on the contractor. Robust contract oversight, detailed performance work statements, and thorough inspection protocols upon completion are crucial to ensure the quality and necessity of the work performed. The Coast Guard's reliance on the OEM (Rolls-Royce) also suggests a calculated decision based on the need for specialized, proprietary knowledge essential for the engine's integrity, potentially outweighing the risks of limited competition in this specific instance.

What is the expected impact of this overhaul on the operational readiness and mission capabilities of the USCGC Hamilton?

This 16,000-hour overhaul of the main propulsion diesel engines is critical for maintaining the operational readiness and mission capabilities of the USCGC Hamilton. These engines are the heart of the vessel's power and propulsion system, essential for its ability to perform its diverse missions, which include maritime law enforcement, search and rescue, homeland security operations, and environmental protection. Completing this major maintenance ensures the engines are functioning at peak performance, reducing the risk of in-transit breakdowns or failures during critical operations. A well-maintained propulsion system enhances the Hamilton's speed, maneuverability, and endurance, directly supporting its effectiveness in projecting U.S. presence and enforcing laws in its area of responsibility. Failure to perform such overhauls could lead to reduced operational availability, mission compromises, and potentially more costly emergency repairs.

How does the spending on this specific overhaul compare to the overall U.S. Coast Guard budget for vessel maintenance and repair?

The $3.4 million allocated for this single engine overhaul represents a significant investment for one specific maintenance task on one vessel. To contextualize this within the broader U.S. Coast Guard budget for vessel maintenance and repair, one would need to examine the Coast Guard's annual budget allocations for operations and maintenance (O&M), specifically the sub-categories related to asset sustainment and repair. The Coast Guard operates a large and diverse fleet, and major overhauls like this are periodic but essential expenditures. While $3.4 million is a large sum, it must be viewed against the total annual spending on maintaining hundreds of vessels, from small boats to large cutters. The Coast Guard's total O&M budget often runs into billions of dollars, with a substantial portion dedicated to keeping its fleet operational. This single contract, while costly, is likely a necessary component of ensuring the long-term viability and effectiveness of a high-value asset like the USCGC Hamilton.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC

Address: 39525 MACKENZIE DR, NOVI, MI, 48377

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $3,419,919

Exercised Options: $3,419,919

Current Obligation: $3,419,919

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z08526DLREP0003

IDV Type: IDC

Timeline