Homeland Security's $100M radar procurement shows long lead times for critical defense systems

Contract Overview

Contract Amount: $100,071,006 ($100.1M)

Contractor: Integrated Coast Guard Systems LLC

Awarding Agency: Department of Homeland Security

Start Date: 2008-03-26

End Date: 2012-03-25

Contract Duration: 1,460 days

Daily Burn Rate: $68.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NSC 4 LONG LEAD TIME MATERIAL FOR TRS-3D RADAR PROCUREMENT.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $100.1 million to INTEGRATED COAST GUARD SYSTEMS LLC for work described as: NSC 4 LONG LEAD TIME MATERIAL FOR TRS-3D RADAR PROCUREMENT. Key points: 1. The contract value of $100,007,106 for radar systems indicates significant investment in national security infrastructure. 2. Procurement of long lead time material suggests a strategic approach to acquiring complex defense assets. 3. The duration of the contract (1460 days) points to the extended timelines typical for advanced technology development and manufacturing. 4. A firm fixed-price contract structure aims to control costs and provide budget certainty for this large acquisition. 5. The award to Integrated Coast Guard Systems LLC highlights the role of specialized contractors in delivering advanced defense capabilities.

Value Assessment

Rating: good

The contract value of approximately $100 million for radar systems appears reasonable given the nature of long lead time material for advanced defense equipment. Benchmarking against similar procurements for sophisticated radar systems would be necessary for a definitive value assessment. However, the firm fixed-price structure suggests an effort to manage costs effectively throughout the contract period. The base award of $6.8 million for initial work provides a starting point for evaluating the overall cost trajectory.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a competitive environment, though the specific number of bidders can influence price discovery. A robust competition is generally expected to yield more favorable pricing for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of offers, potentially leading to lower prices and better value for the government's investment in critical radar technology.

Public Impact

The U.S. Coast Guard is the primary beneficiary, enhancing its maritime domain awareness and operational capabilities. The contract delivers long lead time material essential for the procurement of TRS-3D radar systems. This procurement supports national security by improving the Coast Guard's ability to detect and track potential threats. The acquisition of advanced radar technology can indirectly support the maritime workforce by providing enhanced safety and operational tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long lead times for critical components can introduce schedule risks if not managed proactively.
Dependence on a single contractor for specialized long lead time material could pose supply chain risks.
The firm fixed-price nature requires careful monitoring to ensure the contractor does not incur significant losses that could impact performance.

Positive Signals

Awarding under full and open competition suggests a broad market assessment and potential for competitive pricing.
The firm fixed-price contract provides cost certainty for the government, mitigating budget overruns.
The contract's focus on long lead time material indicates a strategic approach to acquiring complex, high-value assets.

Sector Analysis

The procurement falls within the aerospace and defense sector, specifically focusing on radar systems and related instrumentation. The market for advanced radar technology is characterized by high barriers to entry due to specialized knowledge, research and development costs, and stringent performance requirements. This contract represents a significant investment in a niche but critical area of defense technology, contributing to the overall spending within the defense electronics and systems manufacturing industry.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large-scale procurement of advanced radar systems, it is likely that prime contractors would be established defense industry firms. However, opportunities for small businesses may exist further down the supply chain as subcontractors to the prime awardee, particularly for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Coast Guard's program management and contracting offices. The firm fixed-price structure inherently includes accountability for delivering the specified material within the agreed-upon cost. Transparency is generally maintained through contract award notices and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Radar Systems Procurement
Maritime Surveillance Technology
Long Lead Time Material Acquisition
Homeland Security Technology Investments
Search and Detection Systems

Risk Flags

Long lead time material risk
Potential for schedule slippage
Supply chain vulnerability
Technological obsolescence risk
Concentrated market competition (2 bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $100.1 million to INTEGRATED COAST GUARD SYSTEMS LLC. NSC 4 LONG LEAD TIME MATERIAL FOR TRS-3D RADAR PROCUREMENT.

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 $100.1 million.

What is the period of performance?

Start: 2008-03-26. End: 2012-03-25.

What is the historical spending pattern for similar radar systems by the U.S. Coast Guard or Department of Homeland Security?

Analyzing historical spending for similar radar systems by the U.S. Coast Guard and the broader Department of Homeland Security (DHS) is crucial for contextualizing the $100 million award. While specific data for identical TRS-3D radar procurements may not be readily available in public databases, trends in maritime surveillance and detection systems can be examined. Historically, the Coast Guard has invested in various radar technologies to enhance its operational capabilities, including search and rescue, law enforcement, and border security. Spending in this area often fluctuates based on modernization needs, threat assessments, and budgetary allocations. Comparing the current contract's value to previous investments in radar upgrades or new system acquisitions can reveal whether this represents a significant increase, a standard replacement cycle, or a strategic shift in technology focus. For instance, if previous radar procurements averaged $50 million, this $100 million contract might indicate a move towards more advanced, comprehensive systems or a larger quantity of units. Conversely, if similar large-scale procurements have occurred regularly, it suggests a consistent investment in maintaining and upgrading critical surveillance infrastructure.

How does the pricing of this contract compare to market rates for similar long lead time radar components?

Assessing the pricing of this $100 million contract against market rates for similar long lead time radar components requires detailed knowledge of the specific technologies and manufacturers involved. Long lead time material, by its nature, often commands premium pricing due to specialized manufacturing processes, limited supplier availability, and the extended time required for production. Benchmarking would involve comparing the unit costs of specific components (e.g., specialized processors, high-frequency emitters, advanced antenna elements) against publicly available pricing for comparable items from other defense contractors or commercial suppliers, if applicable. Given that this is a firm fixed-price contract awarded under full and open competition, it suggests that the government sought competitive bids to establish a fair market price. However, the unique specifications and the 'long lead time' aspect can create a market where direct comparisons are challenging. The base award of $6.8 million for initial work provides a smaller data point for early-stage price validation. A comprehensive analysis would involve examining the cost breakdown of the awarded components and comparing them to industry benchmarks for similar technological capabilities and production timelines.

What are the potential risks associated with the 'long lead time material' aspect of this procurement?

The 'long lead time material' aspect of this procurement introduces several potential risks that require careful management. Firstly, schedule slippage is a primary concern; delays in the manufacturing or delivery of these critical components can cascade and impact the overall program timeline for the TRS-3D radar systems. This could lead to extended operational gaps or delayed deployment of enhanced capabilities. Secondly, supply chain disruptions pose a significant risk. Reliance on specialized materials or unique manufacturing processes means that any interruption – whether due to geopolitical events, raw material shortages, or supplier issues – can have a profound impact. Thirdly, technological obsolescence is a risk, albeit potentially mitigated by the long-term nature of the contract. If the technology underpinning the long lead time material evolves rapidly, the procured components might be less advanced by the time they are integrated into the final systems. Finally, cost overruns, despite the firm fixed-price structure, can occur if unforeseen manufacturing challenges arise during the extended production period, potentially leading to contractor claims or performance issues if not managed contractually.

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

Evaluating the track record of Integrated Coast Guard Systems LLC (ICGS) is essential for assessing the reliability of this $100 million contract. As a contractor for the Department of Homeland Security, ICGS would likely have experience in providing systems and services relevant to maritime operations and national security. A thorough review would involve examining past performance on similar contracts, particularly those involving complex electronic systems, radar technology, or long lead time material procurements. Key indicators include on-time delivery, adherence to budget, quality of delivered products, and overall customer satisfaction (e.g., through past performance evaluations or CPARS reports). If ICGS has a history of successful project completion, particularly on large-scale, technically demanding contracts, it would increase confidence in their ability to execute this current procurement effectively. Conversely, any history of significant performance issues, contract disputes, or failures to meet technical specifications would raise concerns and warrant closer scrutiny of their capabilities and proposed execution plan for this specific award.

How does the number of bidders (2) impact the government's leverage and potential for cost savings in this procurement?

The fact that this contract received two bids under full and open competition provides a moderate level of leverage for the government, but it is less than ideal compared to a scenario with numerous bidders. With only two offers, the government has a basis for comparison and can negotiate based on the submitted proposals. This competition likely prevented a sole-source situation, ensuring some level of price discovery and encouraging both bidders to present competitive offers. However, a larger number of bidders typically intensifies competition, driving prices down further and potentially leading to more innovative solutions. With only two bidders, there's a risk that the market may be concentrated, or that only a limited number of firms possess the highly specialized capabilities required for long lead time radar material. This could mean that the government secured a reasonable price, but perhaps not the absolute lowest possible price achievable in a more robustly competitive market. The government's negotiation strategy and the specific technical requirements would heavily influence the actual cost savings realized.

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: FIRM FIXED PRICE (J)

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: $100,071,006

Exercised Options: $100,071,006

Current Obligation: $100,071,006

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DTCG2302C2DW001

IDV Type: IDC

Timeline