Coast Guard's $198.5M C4ISR contract awarded to Integrated Coast Guard Systems LLC for system development

Contract Overview

Contract Amount: $198,506,061 ($198.5M)

Contractor: Integrated Coast Guard Systems LLC

Awarding Agency: Department of Homeland Security

Start Date: 2004-06-14

End Date: 2005-05-10

Contract Duration: 330 days

Daily Burn Rate: $601.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST SHARING

Sector: Defense

Official Description: C4ISR INCREMENT 1 DETAIL DESIGN AND DEVELOPMENT IS ISSUED UNDER CONTRACT NO. DTCG23-02-C-2DW001

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $198.5 million to INTEGRATED COAST GUARD SYSTEMS LLC for work described as: C4ISR INCREMENT 1 DETAIL DESIGN AND DEVELOPMENT IS ISSUED UNDER CONTRACT NO. DTCG23-02-C-2DW001 Key points: 1. The contract's value of $198.5 million represents a significant investment in C4ISR capabilities. 2. Awarded as a 'not competed' contract, it raises questions about the procurement process and potential missed opportunities for broader market engagement. 3. The short performance period of 330 days suggests a focused, potentially rapid development phase. 4. The contract type, 'cost sharing,' indicates a shared financial risk between the government and the contractor. 5. The North American Industry Classification System (NAICS) code 334511 points to a focus on manufacturing search, detection, navigation, guidance, and related systems. 6. The contractor, Integrated Coast Guard Systems LLC, is positioned to deliver specialized C4ISR solutions.

Value Assessment

Rating: questionable

Benchmarking the value of this $198.5 million contract is challenging without detailed cost breakdowns or comparisons to similar C4ISR development projects. The 'cost sharing' contract type suggests a negotiated agreement where the government covers a portion of the costs, but the exact value proposition and efficiency are not immediately clear. Further analysis would be needed to determine if the pricing reflects fair market value for the specified development work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances necessitate a direct award. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down costs or fostered innovation through diverse proposals.

Taxpayer Impact: The absence of competition for this substantial contract means taxpayers may not have received the most cost-effective solution available in the market. Without competitive pressure, there's a risk of paying a premium for the goods or services rendered.

Public Impact

The U.S. Coast Guard is the primary beneficiary, receiving enhanced C4ISR capabilities. The contract supports the development of critical systems for search, detection, navigation, and guidance. This investment is expected to improve operational effectiveness and safety for Coast Guard missions. The contract's impact on the workforce is likely concentrated within the specialized technical and engineering roles at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and limited innovation.
The sole-source award limits transparency in the procurement process.
The 'cost sharing' model requires careful monitoring to ensure government funds are used efficiently.

Positive Signals

The contract addresses a critical need for advanced C4ISR systems within the Coast Guard.
The 'cost sharing' model can align contractor incentives with government objectives.
The award to Integrated Coast Guard Systems LLC suggests confidence in their specialized capabilities.

Sector Analysis

The C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) sector is a vital component of national security and defense spending. This contract falls within the broader aerospace and defense industry, specifically focusing on the manufacturing of advanced navigation and detection systems. The market for such specialized equipment is characterized by high barriers to entry due to technological complexity and stringent government requirements. Comparable spending benchmarks would typically involve other large-scale system development contracts within defense agencies for similar technological capabilities.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. As a sole-source award, the focus was likely on the prime contractor's capabilities, potentially overlooking opportunities to engage small businesses in the supply chain. This could limit the direct economic benefit to the small business ecosystem related to this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Coast Guard's contracting and program management offices. Given the sole-source nature, transparency might be limited compared to competed contracts. Accountability measures would be defined by the contract terms, including performance milestones and financial reporting. The Inspector General for the Department of Homeland Security would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Coast Guard C4ISR Modernization Programs
Naval Systems Development Contracts
Homeland Security Technology Acquisitions
Defense Communication Systems Procurement

Risk Flags

Sole-source award lacks competitive justification.
Potential for uncompetitive pricing due to lack of competition.
Cost-sharing model requires diligent oversight to ensure value.
Short performance period may impact thoroughness of development.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $198.5 million to INTEGRATED COAST GUARD SYSTEMS LLC. C4ISR INCREMENT 1 DETAIL DESIGN AND DEVELOPMENT IS ISSUED UNDER CONTRACT NO. DTCG23-02-C-2DW001

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 $198.5 million.

What is the period of performance?

Start: 2004-06-14. End: 2005-05-10.

What is the specific nature of the C4ISR Increment 1 system being developed, and what are its intended operational benefits for the U.S. Coast Guard?

The contract details 'C4ISR INCREMENT 1 DETAIL DESIGN AND DEVELOPMENT.' While specific system functionalities are not elaborated in the provided data, C4ISR systems are critical for enabling effective command, control, communications, computer, intelligence, surveillance, and reconnaissance operations. For the U.S. Coast Guard, this likely translates to enhanced capabilities in maritime domain awareness, search and rescue coordination, law enforcement operations, and national security missions. The 'Increment 1' designation suggests this is the initial phase of a larger system development, focusing on foundational design and development to establish core capabilities that will be expanded upon in subsequent increments. The operational benefits would include improved situational awareness, faster response times, and more efficient resource allocation during missions.

Given the sole-source award, what justification was provided by the Department of Homeland Security for not competing this contract?

The provided data indicates the contract was awarded under 'NOT COMPETED,' which implies a sole-source justification was utilized. Common justifications for sole-source awards include the unique capability of a single contractor, urgent and compelling needs where competition is not feasible, or when the contract is a follow-on to a previously competed effort where only one contractor can provide the necessary services. Without access to the specific justification document filed by the Department of Homeland Security (DHS) for this contract (DTCG23-02-C-2DW001), the precise reason remains unknown. However, such justifications are typically required to demonstrate that competition would not be advantageous or possible.

How does the 'cost sharing' contract type influence the financial risk and potential for cost overruns compared to other contract types like fixed-price?

A 'cost sharing' contract type, as indicated for this $198.5 million award, means that the contractor agrees to absorb a portion of the project costs, with the government reimbursing the remainder. This structure aims to align the contractor's financial interests with the government's objective of controlling costs, as the contractor has 'skin in the game.' Compared to a cost-plus contract where the government typically bears all allowable costs plus a fee, cost sharing shifts some of the financial risk to the contractor. However, it also introduces complexity in cost accounting and requires robust oversight to ensure the contractor's cost share is accurately reported and that the government is only paying its agreed-upon portion of legitimate expenses. Potential for cost overruns still exists, but the contractor's own financial stake may incentivize more efficient management.

What is the historical spending pattern for C4ISR systems by the U.S. Coast Guard, and how does this contract fit into that trend?

Analyzing historical spending patterns for C4ISR systems by the U.S. Coast Guard requires access to comprehensive budget and contract databases. However, it is generally understood that C4ISR capabilities are a continuous area of investment for maritime security and operational effectiveness. Agencies like the Coast Guard consistently allocate significant resources to modernize and maintain these systems due to evolving threats and technological advancements. This $198.5 million contract for 'Detail Design and Development' suggests a strategic investment in a specific C4ISR increment, likely part of a larger, multi-year modernization strategy. Without historical data, it's difficult to definitively state how this contract fits the trend, but it represents a substantial, albeit potentially phased, commitment to enhancing the Coast Guard's information and operational technology infrastructure.

What are the potential implications of a short contract duration (330 days) for the scope and quality of the C4ISR Increment 1 development?

A contract duration of 330 days for 'Detail Design and Development' of a C4ISR system implies a focused and potentially accelerated timeline. This short duration suggests that the scope of 'Increment 1' is likely well-defined and manageable within that timeframe, possibly concentrating on specific design aspects, prototyping, or initial development phases rather than full-scale production or deployment. For the quality of development, a compressed schedule can be a double-edged sword. It may drive efficiency and rapid progress if managed effectively. However, it can also increase pressure on the development team, potentially leading to rushed work, overlooked details, or compromises in thoroughness if not adequately resourced and overseen. The success hinges on the contractor's efficiency and the clarity of the requirements provided by the Coast Guard.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST SHARING (T)

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: $198,506,061

Exercised Options: $198,506,061

Current Obligation: $198,506,061

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DTCG2302C2DW001

IDV Type: IDC

Timeline