DHS Coast Guard Awards $47.1M for VTOL UAV System Development

Contract Overview

Contract Amount: $47,122,777 ($47.1M)

Contractor: Integrated Coast Guard Systems LLC

Awarding Agency: Department of Homeland Security

Start Date: 2004-02-04

End Date: 2012-12-30

Contract Duration: 3,252 days

Daily Burn Rate: $14.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: SYSTEM DEVELOPMENT PHASE FOR THE VTOL UNMANNED AERIAL VEHICLE (VUAV).

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $47.1 million to INTEGRATED COAST GUARD SYSTEMS LLC for work described as: SYSTEM DEVELOPMENT PHASE FOR THE VTOL UNMANNED AERIAL VEHICLE (VUAV). Key points: 1. The contract focuses on the system development phase for a VTOL Unmanned Aerial Vehicle (VUAV). 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract type is Cost Plus Incentive Fee (CPIF), which can incentivize cost control but also carries inherent risk. 4. The sector involves advanced aeronautical and nautical system manufacturing.

Value Assessment

Rating: fair

The award amount of $47.1M for a system development phase is substantial. Without specific benchmarks for VUAV development, it's difficult to definitively assess pricing. However, CPIF contracts can sometimes lead to higher final costs if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically allows for a broad range of potential bidders and can lead to better price discovery. The use of a delivery order under a larger contract structure is noted.

Taxpayer Impact: The significant investment in advanced drone technology aims to enhance Coast Guard capabilities, potentially leading to improved operational efficiency and effectiveness, which is a positive taxpayer outcome if realized.

Public Impact

Enhances Coast Guard's surveillance and operational capabilities with advanced drone technology. Potential for improved search and rescue, interdiction, and border patrol missions. Represents a significant investment in the modernization of military and security hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contract type can lead to cost overruns.
Long duration (over 8 years) increases risk of scope creep and cost escalation.
Lack of specific performance metrics makes value assessment difficult.

Positive Signals

Full and open competition suggests potential for competitive pricing.
Focus on advanced unmanned aerial vehicle technology aligns with modern defense needs.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on unmanned aerial systems. Spending in this area is driven by technological advancements and evolving national security requirements. Benchmarks for similar R&D phases for complex aerial vehicles are highly variable.

Small Business Impact

The provided data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The contract was awarded as a delivery order, implying it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. Oversight would focus on managing the CPIF structure, ensuring milestones are met, and controlling costs throughout the development lifecycle.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Homeland Security Contracting
U.S. Coast Guard Programs

Risk Flags

Cost Plus Incentive Fee (CPIF) contract type.
Long contract duration (over 8 years).
System development phase carries inherent technical risks.
Lack of specific performance metrics in the provided data.
Potential for scope creep over the extended timeline.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $47.1 million to INTEGRATED COAST GUARD SYSTEMS LLC. SYSTEM DEVELOPMENT PHASE FOR THE VTOL UNMANNED AERIAL VEHICLE (VUAV).

Who is the contractor on this award?

The obligated recipient is INTEGRATED COAST GUARD SYSTEMS LLC.

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 $47.1 million.

What is the period of performance?

Start: 2004-02-04. End: 2012-12-30.

What specific technological advancements does the VUAV system offer compared to existing platforms, and how do these justify the development cost?

The VUAV system is intended for vertical take-off and landing, offering enhanced operational flexibility in diverse environments compared to traditional fixed-wing or rotorcraft drones. Its development likely focuses on advanced sensor integration, extended endurance, and autonomous capabilities crucial for complex maritime surveillance and interdiction missions, justifying the investment through potential gains in mission effectiveness and reduced risk to personnel.

How effectively will the Cost Plus Incentive Fee structure mitigate cost risks given the long development timeline and inherent uncertainties in system development?

The CPIF structure aims to align contractor and government interests by providing incentives for cost savings and performance targets. However, with a long development cycle (over 8 years) and the inherent unknowns in advanced system development, there's a significant risk that cost targets may be adjusted, or incentives may not fully compensate for unforeseen challenges, potentially leading to costs exceeding initial estimates.

What are the key performance indicators (KPIs) for this system development phase, and how will their achievement be measured to ensure effective delivery of the VUAV capabilities?

Key performance indicators for this system development phase would likely include successful demonstration of core functionalities such as VTOL capability, flight stability, payload integration, sensor data acquisition, and communication range. Effectiveness will be measured through rigorous testing and validation protocols, milestone reviews, and potentially prototype flight tests against predefined operational requirements, ensuring the system meets the intended mission needs.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 300 M ST SE STE 685, WASHINGTON, DC, 20003

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $141,213,947

Exercised Options: $141,213,947

Current Obligation: $47,122,777

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DTCG2302C2DW001

IDV Type: IDC

Timeline