Coast Guard awards $151.5M contract for vessel repair and maintenance to Bollinger Shipyards

Contract Overview

Contract Amount: $151,496,276 ($151.5M)

Contractor: Bollinger Shipyards Lockport, L.L.C.

Awarding Agency: Department of Homeland Security

Start Date: 2000-02-15

End Date: 2010-04-08

Contract Duration: 3,705 days

Daily Burn Rate: $40.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Place of Performance

Location: LOCKPORT, LAFOURCHE County, LOUISIANA, 70374

State: Louisiana Government Spending

Plain-Language Summary

Department of Homeland Security obligated $151.5 million to BOLLINGER SHIPYARDS LOCKPORT, L.L.C. for work described as: Key points: 1. Contract value represents a significant investment in maintaining the operational readiness of the U.S. Coast Guard fleet. 2. The fixed-price with economic price adjustment structure aims to mitigate risks associated with fluctuating material and labor costs. 3. Competition dynamics suggest a potentially competitive bidding process, which could lead to favorable pricing. 4. The contract duration of over 10 years indicates a long-term commitment to vessel sustainment. 5. Geographic concentration of the awardee in Louisiana may have localized economic benefits. 6. The absence of small business set-aside flags suggests this was not specifically targeted for smaller enterprises.

Value Assessment

Rating: good

The contract value of $151.5 million over approximately 10 years suggests a substantial investment in vessel maintenance. Benchmarking against similar long-term, comprehensive vessel repair contracts would be necessary for a precise value-for-money assessment. However, the fixed-price with economic price adjustment (FPEPA) clause indicates an effort to manage cost volatility, which is common in long-duration industrial contracts. The number of bids received (2) is on the lower side for a full and open competition, which could warrant further investigation into pricing competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. However, only two bids were received. While full and open competition is generally preferred for maximizing price discovery and ensuring fair access, a low number of bidders can sometimes suggest market limitations, high barriers to entry, or insufficient outreach. This could potentially impact the level of price competition achieved.

Taxpayer Impact: A low number of bidders in a full and open competition may mean that taxpayers did not benefit from the most competitive pricing possible, as fewer companies vied for the contract.

Public Impact

The U.S. Coast Guard benefits through the enhanced readiness and operational capability of its vessel fleet. Services delivered include essential repairs and maintenance, ensuring the safety and effectiveness of maritime security operations. The geographic impact is primarily concentrated in Louisiana, where Bollinger Shipyards is located, potentially creating or sustaining jobs in the region. The contract supports a skilled maritime workforce involved in shipbuilding, repair, and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) for a full and open solicitation may indicate potential issues with market reach or barriers to entry, impacting price competitiveness.
The long contract duration (over 10 years) increases the risk of cost overruns if economic price adjustments are not carefully managed or if unforeseen technical challenges arise.
Lack of specific details on the scope of work makes it difficult to fully assess the value proposition and potential for cost efficiencies.

Positive Signals

Awarded under full and open competition, theoretically allowing for the widest possible range of qualified contractors.
The fixed-price with economic price adjustment contract type is designed to provide cost certainty while accounting for market fluctuations.
The contract is with an established entity (Bollinger Shipyards), suggesting a degree of contractor reliability and experience in the maritime sector.

Sector Analysis

The maritime repair and maintenance sector is critical for national security and economic activity, supporting naval and coast guard fleets, as well as commercial shipping. This contract falls within the broader defense industrial base and government contracting services sector. Spending in this area is often driven by the need to maintain aging fleets and ensure operational readiness. Comparable spending benchmarks would typically involve analyzing the total cost of ownership for similar vessel classes across different branches of the military and government agencies.

Small Business Impact

The contract was not awarded as a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses within the provided data. This suggests that the primary focus was on securing the best value from the available market, rather than specifically promoting small business participation. The impact on the small business ecosystem would depend on whether larger prime contractors, if any were involved, engage in subcontracting with small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Coast Guard's contracting and program management offices. Accountability measures would be embedded in the contract's performance standards, delivery schedules, and quality requirements. Transparency is generally facilitated through contract award databases and public reporting mechanisms. The Inspector General for the Department of Homeland Security would likely have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

USCG Vessel Maintenance and Repair Contracts
Department of Defense Shipyard Services
Maritime Administration Vessel Support
Naval Sea Systems Command Contracts

Risk Flags

Limited competition
Long contract duration
Potential for cost escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $151.5 million to BOLLINGER SHIPYARDS LOCKPORT, L.L.C.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BOLLINGER SHIPYARDS LOCKPORT, 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 $151.5 million.

What is the period of performance?

Start: 2000-02-15. End: 2010-04-08.

What is the historical spending pattern for vessel repair and maintenance by the U.S. Coast Guard, and how does this award compare?

Historical spending on U.S. Coast Guard vessel repair and maintenance can fluctuate significantly based on fleet age, operational tempo, and budget allocations. While specific historical data for the Coast Guard's total annual spending on maintenance is not provided here, contracts of this magnitude (over $150 million) are substantial and typically represent a significant portion of the budget dedicated to fleet sustainment for a given period. Awards of this size often cover major overhauls, life extensions, or the maintenance of a substantial number of vessels. Comparing this award requires analyzing prior contracts for similar services, vessel classes, and durations to understand if the $151.5 million represents an increase, decrease, or stable level of investment compared to previous years or similar multi-year maintenance programs.

How does the pricing structure (Fixed Price with Economic Price Adjustment) typically perform in long-term vessel maintenance contracts?

The Fixed Price with Economic Price Adjustment (FPEPA) contract type is common for long-term, complex projects like vessel maintenance where material and labor costs can be volatile. It provides a baseline fixed price but allows for adjustments based on pre-defined economic indices (e.g., for labor rates, fuel, specific materials). This structure aims to protect both the contractor from unforeseen cost increases and the government from excessive price hikes. Its performance is highly dependent on the accuracy of the economic adjustment formulas and the diligence of both parties in monitoring and applying these adjustments. When well-structured, FPEPA can lead to more stable budgeting for the government and fair compensation for the contractor, fostering a more collaborative relationship. However, poorly defined adjustment clauses can lead to disputes or unexpected cost escalations for the government.

What are the potential risks associated with a contract having only two bidders under full and open competition?

Having only two bidders in a full and open competition can signal several potential risks. Firstly, it may indicate a lack of robust competition, which could lead to higher prices than if more bidders were present. Taxpayers might not be receiving the best possible value. Secondly, it could suggest barriers to entry for other potential contractors, such as high qualification requirements, specialized facilities needed, or complex bidding processes. This concentration of the market among a few players could reduce future competition. Lastly, it might indicate that the market for this specific type of service is inherently limited, meaning the government has fewer options to choose from, potentially impacting negotiation leverage and long-term strategic sourcing.

What is Bollinger Shipyards' track record with large federal contracts, particularly with the U.S. Coast Guard?

Bollinger Shipyards has a significant history of contracting with the U.S. government, including the U.S. Coast Guard and the U.S. Navy, for vessel construction, repair, and conversion. They have been involved in various programs, such as the Fast Response Cutter (FRC) program for the Coast Guard, which demonstrates their capability in delivering complex maritime assets. Their track record generally indicates experience in fulfilling large-scale shipbuilding and repair requirements. However, a comprehensive assessment would involve reviewing past performance evaluations, any contract disputes or terminations, and the timeliness and quality of their previous deliveries to ensure continued reliability and value for taxpayer dollars.

How does the geographic concentration of the awardee in Louisiana impact the distribution of federal spending?

The award to Bollinger Shipyards, located in Louisiana, means that a significant portion of the $151.5 million federal spending will be directed to that state. This concentration can have positive economic impacts locally, including job creation, support for regional supply chains, and increased business activity within the maritime industry cluster in Louisiana. While federal contracts aim for the best value regardless of geography, the reality is that large industrial contracts often benefit the region where the primary contractor is based. This distribution is a common outcome when specialized industrial capabilities are concentrated in specific geographic areas, reflecting the existing infrastructure and workforce in those locations.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Contractor Details

Parent Company: Bollinger Shipyards, Inc (UEI: 073253309)

Address: 8365 HIGHWAY 308, LOCKPORT, LA, 01

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $114,021,333

Exercised Options: $114,021,333

Current Obligation: $151,496,276

Timeline