Coast Guard's C-130J upgrade contract awarded to Integrated Coast Guard Systems LLC for over $144 million

Contract Overview

Contract Amount: $144,229,872 ($144.2M)

Contractor: Integrated Coast Guard Systems LLC

Awarding Agency: Department of Homeland Security

Start Date: 2004-09-28

End Date: 2009-12-14

Contract Duration: 1,903 days

Daily Burn Rate: $75.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: UPGRADE OF C-130J TO A MISSIONIZED HC-130J AIRCRAFT CONFIGURATION USING A FLIGHT DECK MOUNTED SOLUTION TO INCLUDE PROGRAM MANAGEMENT, MANAGEMENT OF SUBCONTRACTORS, PROCUREMENT OF EQUIPMENT, SYSTEM DESIGN, SYSTEM INTEGRATION, SOFTWARE DEVELOPMENT, EQUIPMENT DELIVERIES, INSTALLATION, TEST, INTEGRATED LOGISTICS SUPPORT (ILS) EFFORTS, DEVELOPMENT OF TECHNICAL DOCUMENTATION, AND DELIVERY OF THE TECHNICAL DOCUMENTATION.

Place of Performance

Location: GREENVILLE, GREENVILLE County, SOUTH CAROLINA, 29607

State: South Carolina Government Spending

Plain-Language Summary

Department of Homeland Security obligated $144.2 million to INTEGRATED COAST GUARD SYSTEMS LLC for work described as: UPGRADE OF C-130J TO A MISSIONIZED HC-130J AIRCRAFT CONFIGURATION USING A FLIGHT DECK MOUNTED SOLUTION TO INCLUDE PROGRAM MANAGEMENT, MANAGEMENT OF SUBCONTRACTORS, PROCUREMENT OF EQUIPMENT, SYSTEM DESIGN, SYSTEM INTEGRATION, SOFTWARE DEVELOPMENT, EQUIPMENT DELIVERIES, INSTALLATIO… Key points: 1. The contract focuses on modernizing C-130J aircraft for enhanced mission capabilities, including search and navigation systems. 2. Significant investment in program management, system design, integration, and logistics support indicates a complex modernization effort. 3. The use of a Cost Plus Fixed Fee (CPFF) contract type suggests potential for cost overruns if not closely managed. 4. The duration of the contract (over 1900 days) points to a lengthy and involved upgrade process. 5. The project involves multiple facets, from software development to equipment installation and technical documentation. 6. The contract was awarded under full and open competition, suggesting a competitive bidding process.

Value Assessment

Rating: fair

The total contract value of $144.2 million for the upgrade of C-130J aircraft to a missionized HC-130J configuration appears substantial. Benchmarking this against similar complex aircraft modernization programs is challenging without more specific details on the scope of work and the technology involved. The CPFF contract type, while allowing for flexibility, carries inherent risks of cost escalation compared to fixed-price contracts. The value for money will ultimately depend on the successful integration of new systems and the extended operational life and capability enhancement of the HC-130J fleet.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bidders suggests a reasonable level of competition for this specialized service. This competitive environment is generally expected to drive more favorable pricing and innovative solutions for the government.

Taxpayer Impact: A competitive award process is beneficial for taxpayers as it increases the likelihood of obtaining services at a fair market price and encourages contractors to offer their best value propositions.

Public Impact

The U.S. Coast Guard will benefit from enhanced capabilities in search, detection, navigation, and guidance operations. The modernization of the HC-130J aircraft will improve the platform's effectiveness in critical maritime security and rescue missions. The project supports the aerospace and defense industry, particularly in system integration and manufacturing within South Carolina. The delivery of updated technical documentation and integrated logistics support will ensure the long-term maintainability and operational readiness of the upgraded aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed diligently.
The extended contract duration of over 1900 days may indicate potential for schedule delays.
Complexity of system integration and software development introduces technical risks.
Reliance on subcontractors could introduce supply chain or performance risks.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
The contract includes comprehensive Integrated Logistics Support (ILS) for long-term sustainment.
The upgrade aims to enhance critical mission capabilities for the Coast Guard.
The project involves a structured approach from design to installation and testing.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft modification and system integration. The market for specialized military and coast guard aircraft upgrades is characterized by high technical barriers to entry and a limited number of qualified contractors. Spending in this area is driven by the need to maintain and modernize aging fleets to meet evolving operational requirements and technological advancements. Comparable spending benchmarks would typically involve other large-scale aircraft modernization programs for military or paramilitary organizations.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While Integrated Coast Guard Systems LLC may engage small businesses as subcontractors, the primary award was not directed towards small business set-asides. This suggests that the prime contract was awarded based on technical capability and price, rather than a specific small business goal. The impact on the small business ecosystem would depend on the subcontracting opportunities generated by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security and the U.S. Coast Guard's contracting and program management offices. Given the CPFF structure, rigorous financial oversight and performance monitoring are crucial to ensure cost control and adherence to the scope of work. Transparency would be facilitated through contract reporting mechanisms and potentially through the Government Accountability Office (GAO) if protests or specific inquiries arise. The Inspector General for DHS would also have jurisdiction for audits and investigations.

Related Government Programs

C-130J Super Hercules Aircraft Program
Coast Guard Aviation Modernization Programs
Aerospace Systems Integration Contracts
Search and Rescue Aircraft Upgrades
Homeland Security Aviation Assets

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Extended contract duration may increase risk of schedule slippage or technological obsolescence.
Complexity of system integration and software development presents technical challenges.
Reliance on subcontractors introduces potential supply chain and performance variability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $144.2 million to INTEGRATED COAST GUARD SYSTEMS LLC. UPGRADE OF C-130J TO A MISSIONIZED HC-130J AIRCRAFT CONFIGURATION USING A FLIGHT DECK MOUNTED SOLUTION TO INCLUDE PROGRAM MANAGEMENT, MANAGEMENT OF SUBCONTRACTORS, PROCUREMENT OF EQUIPMENT, SYSTEM DESIGN, SYSTEM INTEGRATION, SOFTWARE DEVELOPMENT, EQUIPMENT DELIVERIES, INSTALLATION, TEST, INTEGRATED LOGISTICS SUPPORT (ILS) EFFORTS, DEVELOPMENT OF TECHNICAL DOCUMENTATION, AND DELIVERY OF THE TECHNICAL DOCUMENTATION.

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 $144.2 million.

What is the period of performance?

Start: 2004-09-28. End: 2009-12-14.

What is the track record of Integrated Coast Guard Systems LLC in delivering complex aircraft modification projects?

Information on the specific track record of Integrated Coast Guard Systems LLC for complex aircraft modifications is not detailed in the provided data. However, the award of a $144 million contract by the U.S. Coast Guard suggests a level of confidence in their capabilities. Further investigation would be needed to review past performance evaluations, on-time delivery rates, and budget adherence for similar projects undertaken by the company. Understanding their experience with C-130J platforms specifically would also be critical in assessing their suitability for this particular upgrade.

How does the total contract value of $144.2 million compare to similar C-130J modernization efforts?

Direct comparison of the $144.2 million contract value to similar C-130J modernization efforts is difficult without specific details on the scope and technological advancements included in each program. C-130J upgrades can vary significantly, from avionics retrofits to complete mission system overhauls. Generally, comprehensive missionization, including advanced sensor integration, communication upgrades, and specialized equipment installation, represents a significant investment. The value appears to be within the expected range for substantial fleet modernization, but a precise benchmark would require analyzing contracts with identical or highly comparable upgrade packages and aircraft configurations.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this project?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for this C-130J upgrade project is the potential for cost overruns. While the 'fixed fee' component provides the contractor with a guaranteed profit margin, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial estimates due to inefficiencies, unforeseen technical challenges, or scope creep, the total expenditure for the government could be significantly higher than anticipated. This necessitates robust government oversight to scrutinize costs, manage scope, and ensure efficient execution to mitigate financial risks.

How effective is the 'full and open competition' approach in ensuring value for money for this type of specialized aircraft upgrade?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in government contracting, including specialized aircraft upgrades. By allowing all responsible sources to submit bids, it fosters a competitive environment that encourages contractors to offer their best pricing and technical solutions. For a complex project like the C-130J missionization, this approach increases the likelihood that the U.S. Coast Guard will receive a technically sound solution at a competitive price. The presence of two bidders, as indicated, suggests a degree of competition was achieved, which is positive for price discovery.

What are the potential performance implications of the contract's 1903-day duration?

A contract duration of 1903 days (approximately 5.2 years) for an aircraft modernization project like the C-130J upgrade suggests a complex, multi-phased undertaking. Potential performance implications include the risk of technological obsolescence if the upgrade timeline extends too far beyond initial planning, the need for sustained program management and oversight over an extended period, and the potential for contractor or government personnel turnover impacting knowledge continuity. However, a longer duration can also indicate a thorough and deliberate approach to system design, integration, testing, and delivery, which may be necessary for complex modifications to ensure successful outcomes and minimize post-delivery issues.

What is the historical spending pattern for C-130J upgrades or similar aviation modernization by the U.S. Coast Guard?

The provided data does not include historical spending patterns for C-130J upgrades or similar aviation modernization by the U.S. Coast Guard. To assess this contract's value in context, one would need to analyze past contracts for C-130J modifications, HC-130J enhancements, or other significant aviation platform upgrades undertaken by the Coast Guard or similar agencies. This would involve examining contract values, durations, competition levels, and the scope of work for previous projects to identify trends and establish benchmarks for current spending.

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: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

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: $159,494,739

Exercised Options: $144,229,872

Current Obligation: $144,229,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DTCG2302C2DW001

IDV Type: IDC

Timeline