Integrated Coast Guard Systems LLC awarded $367.7M for National Security Cutter production and deployment

Contract Overview

Contract Amount: $367,724,380 ($367.7M)

Contractor: Integrated Coast Guard Systems LLC

Awarding Agency: Department of Homeland Security

Start Date: 2005-01-05

End Date: 2008-09-30

Contract Duration: 1,364 days

Daily Burn Rate: $269.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PRODUCTION & DEPLOYMENT OF NATIONAL SECURITY CUTTER

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39568

State: Mississippi Government Spending

Plain-Language Summary

Department of Homeland Security obligated $367.7 million to INTEGRATED COAST GUARD SYSTEMS LLC for work described as: PRODUCTION & DEPLOYMENT OF NATIONAL SECURITY CUTTER Key points: 1. Contract value represents a significant investment in national security infrastructure. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (1364 days) indicates a long-term project with substantial resource commitment. 4. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector highlights the advanced technological nature of the procurement. 5. The contract type 'COST PLUS FIXED FEE' can introduce cost overrun risks if not managed carefully. 6. The award date in 2005 suggests this is a mature project with historical performance data available.

Value Assessment

Rating: fair

The total award amount of $367.7 million for the production and deployment of a National Security Cutter is substantial. Benchmarking this against similar large-scale naval or security vessel procurements would be necessary for a precise value-for-money assessment. The 'COST PLUS FIXED FEE' contract type, while allowing for flexibility, can sometimes lead to higher final costs compared to fixed-price contracts if cost controls are not stringent. The provided data does not include specific cost breakdowns or comparisons to estimated costs, making a definitive value assessment challenging without further context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding environment, which typically fosters competitive pricing and innovation. The data does not specify the number of bidders, but the designation implies multiple interested parties likely vied for this significant contract. The level of competition is generally positive for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging a wider range of solutions, potentially leading to better value for public funds.

Public Impact

The U.S. Coast Guard is the primary beneficiary, receiving critical assets for national security and maritime law enforcement. The contract directly supports the production and deployment of National Security Cutters, enhancing maritime domain awareness and operational capabilities. The geographic impact is national, with the cutters operating in U.S. waters and potentially international waters for security and interdiction missions. The contract likely supports a specialized workforce in shipbuilding, engineering, and systems integration, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not closely monitored.
Long contract durations increase the risk of scope creep or evolving requirements.
The specific nature of 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' implies complex technological integration with potential for unforeseen challenges.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield better pricing.
The contract addresses a critical national security need for the U.S. Coast Guard.
The project involves advanced technology, potentially driving innovation in maritime systems.

Sector Analysis

This contract falls within the broader defense and aerospace manufacturing sector, specifically focusing on specialized maritime systems. The market for such high-value, technologically advanced vessels is typically concentrated among a few large defense contractors and specialized shipbuilding firms. The production of National Security Cutters represents a significant investment in maintaining and modernizing the U.S. Coast Guard's fleet, aligning with national defense and homeland security priorities. Comparable spending benchmarks would involve analyzing other major naval vessel procurements or large-scale defense system integrations.

Small Business Impact

The data indicates that small business participation (sb) was false and there was no specific small business set-aside (ss) for this contract. This suggests that the prime contract was likely awarded to a large business entity capable of handling the scale and complexity of producing a National Security Cutter. Subcontracting opportunities for small businesses may exist within the supply chain, but the primary award mechanism did not prioritize small business set-asides. The impact on the small business ecosystem is likely indirect, through potential subcontracting roles rather than direct prime contract awards.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Coast Guard and the Department of Homeland Security. Mechanisms likely include contract performance reviews, milestone inspections, and financial audits, especially given the Cost Plus Fixed Fee structure. Transparency would be facilitated through contract award databases and potentially public reporting on program progress. Inspector General jurisdiction would apply to investigate any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

National Security Cutter Program
Coast Guard Acquisition Programs
Maritime Security Vessels
Homeland Security Contracts
Naval Shipbuilding Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Long contract duration increases potential for scope changes and schedule delays.
Complex technological integration may lead to unforeseen development challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $367.7 million to INTEGRATED COAST GUARD SYSTEMS LLC. PRODUCTION & DEPLOYMENT OF NATIONAL SECURITY CUTTER

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 $367.7 million.

What is the period of performance?

Start: 2005-01-05. End: 2008-09-30.

What is the historical spending trend for the National Security Cutter program?

The provided data point represents a single contract award of $367.7 million for the production and deployment of a National Security Cutter, awarded in 2005. To understand the historical spending trend for the entire program, one would need to examine all contracts awarded under the National Security Cutter program over its lifecycle. This would involve aggregating data on initial construction, subsequent vessels, modifications, sustainment, and operational support contracts. Analyzing trends would reveal the total program cost, year-over-year spending, and potential fluctuations based on production schedules, budget allocations, and program milestones. Without access to the complete contract history for the program, a comprehensive trend analysis is not possible from this single data point.

How does the cost of this National Security Cutter compare to similar vessels procured by other agencies or nations?

A direct comparison of the $367.7 million award for this National Security Cutter to similar vessels requires identifying comparable platforms in terms of size, capabilities, and mission scope. Vessels like destroyers, frigates, or large patrol craft from other navies or coast guards could serve as benchmarks. However, precise comparisons are difficult due to variations in specifications, technological sophistication, labor costs, and procurement strategies across different countries and agencies. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' aspect suggests a high degree of integrated technology, which can significantly influence cost. A detailed analysis would involve comparing not just the total contract value but also cost per displacement ton, cost per system, and the specific mission equipment installed.

What are the key performance indicators (KPIs) used to measure the success of this contract?

While specific KPIs are not detailed in the provided data, typical performance indicators for a contract of this nature (production and deployment of a major vessel) would likely include adherence to schedule (delivery dates), adherence to budget (cost performance), quality of construction (meeting specifications, defect rates), and successful integration and testing of all systems. For the 'production and deployment' aspect, operational readiness and performance of the cutter upon delivery would be critical. The U.S. Coast Guard would establish acceptance criteria and conduct rigorous testing and trials to ensure the vessel meets all operational requirements before final acceptance. Performance metrics would also likely track the reliability and maintainability of the installed systems over the vessel's service life.

What is the track record of Integrated Coast Guard Systems LLC in delivering complex defense or maritime contracts?

Integrated Coast Guard Systems LLC (ICGS) was a joint venture formed specifically to deliver the National Security Cutter program for the U.S. Coast Guard. Its track record is intrinsically tied to the success and challenges of this specific program. As a joint venture, its performance reflects the capabilities and management of its parent companies, which typically include major defense contractors. Analyzing ICGS's track record would involve reviewing the history of the National Security Cutter program itself, including any delays, cost overruns, or performance issues encountered during production and delivery. Information on ICGS's past performance would likely be available through contract performance reports and historical procurement data, assessing their ability to manage large-scale, complex shipbuilding and systems integration projects.

What are the potential risks associated with the 'COST PLUS FIXED FEE' contract type for this procurement?

The 'COST PLUS FIXED FEE' (CPFF) contract type, used here, presents specific risks. While it provides the contractor with a guaranteed profit margin (the fixed fee), it shifts a significant portion of the cost risk to the government. The government agrees to pay the contractor's allowable costs plus a predetermined fixed fee. Risks include: 1) Cost Overruns: If the contractor's costs exceed initial estimates, the government is obligated to pay these higher costs, potentially leading to the contract exceeding its ceiling value. 2) Contractor Incentive: The contractor may have less incentive to control costs rigorously compared to fixed-price contracts, as their fee is fixed regardless of the final cost. 3) Scope Creep: Changes or additions to the scope of work can increase costs significantly, and the government bears this risk. Effective oversight, stringent cost accounting standards, and clear definition of allowable costs are crucial to mitigate these risks.

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: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 300 M ST SE STE 685, WASHINGTON, DC, 98

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $367,724,380

Exercised Options: $367,724,380

Current Obligation: $367,724,380

Parent Contract

Parent Award PIID: DTCG2302C2DW001

IDV Type: IDC

Timeline