Coast Guard awards $63.6M for 30 patrol boats, with unit costs exceeding benchmarks
Contract Overview
Contract Amount: $63,587,689 ($63.6M)
Contractor: Marinette Marine Corporation
Awarding Agency: Department of Homeland Security
Start Date: 2010-04-22
End Date: 2012-07-31
Contract Duration: 831 days
Daily Burn Rate: $76.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PURCHASE RB-M HULLS 45667-45696
Place of Performance
Location: MARINETTE, MARINETTE County, WISCONSIN, 54143
Plain-Language Summary
Department of Homeland Security obligated $63.6 million to MARINETTE MARINE CORPORATION for work described as: PURCHASE RB-M HULLS 45667-45696 Key points: 1. The contract value of $63.6 million for 30 vessels suggests a significant investment in maritime security capabilities. 2. Competition dynamics indicate a full and open process, potentially leading to better pricing, though unit costs warrant scrutiny. 3. The fixed-price contract type offers cost certainty to the government, shifting performance risk to the contractor. 4. Delivery order awards suggest a phased approach to acquisition, allowing for flexibility in production and delivery schedules. 5. The contract's duration and delivery timeline will be critical in assessing the contractor's ability to meet demand. 6. The Wisconsin location of the contractor may have implications for regional economic impact and supply chain considerations.
Value Assessment
Rating: fair
The total award of $63.6 million for 30 patrol boats results in a per-unit cost of approximately $2.12 million. Benchmarking against similar naval vessel procurements is challenging without more specific details on the 'RB-M HULLS' specifications. However, the provided benchmark of $7.65 million (br: 76519) seems to represent a different scale or type of vessel, making a direct comparison difficult. Further analysis would require understanding the complexity, size, and capabilities of these specific patrol boats to definitively assess value for money.
Cost Per Unit: Approximately $2.12 million per vessel. The provided benchmark (br: 76519) appears to be for a different type of asset, making direct comparison unreliable.
Competition Analysis
Competition Level: full-and-open
The contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. This approach generally fosters a competitive environment, encouraging multiple bidders to vie for the contract. The number of bids received (no: 3) is on the lower side for a full and open competition, which could suggest potential limitations in the market for this specific type of vessel or specialized requirements.
Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it aims to secure the best possible pricing through market forces. However, with only three bidders, the potential for significant price reductions may have been constrained compared to a scenario with a larger number of competitive offers.
Public Impact
The U.S. Coast Guard is the primary beneficiary, receiving 30 patrol boats to enhance its operational capabilities in maritime law enforcement, search and rescue, and national security missions. These patrol boats will likely be deployed to various coastal and inland waterways, improving the Coast Guard's presence and response times. The acquisition supports the maritime security sector by providing essential assets for border protection and interdiction operations. The contract supports jobs within the shipbuilding industry, particularly in Wisconsin where the contractor is located, contributing to the regional economy.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The relatively low number of bidders (3) in a full and open competition might indicate a lack of robust market competition for these specific patrol boats, potentially impacting price optimization.
- The per-unit cost, while not directly comparable to the provided benchmark, warrants further investigation to ensure it aligns with industry standards for vessels of this size and capability.
- The contract duration of 831 days (dur: 831) for 30 vessels means an average of approximately 27.7 days per vessel, which could be aggressive depending on the complexity of the build and outfitting.
Positive Signals
- The use of a firm-fixed-price contract provides cost certainty for the government, protecting against cost overruns.
- Awarding under full and open competition suggests an effort to maximize the pool of potential offerors and achieve competitive pricing.
- The delivery order award mechanism allows for phased funding and delivery, potentially aligning with budget cycles and operational needs.
Sector Analysis
The contract falls within the broader defense and maritime security sector, specifically focusing on naval shipbuilding and vessel acquisition. The market for specialized patrol boats can be niche, often dominated by a few key shipbuilders capable of meeting stringent military or coast guard specifications. The total value of $63.6 million positions this as a significant, though not colossal, procurement within the Coast Guard's asset modernization efforts. Comparable spending benchmarks would typically involve analyzing contracts for similar-sized patrol or interdiction vessels awarded by the Coast Guard or Navy.
Small Business Impact
The provided data indicates that small business participation (sb: false) and set-asides (ss: false) were not explicitly part of this contract's award structure. This suggests the competition was open to all responsible sources, including large businesses. There is no direct information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether the prime contractor, Marinette Marine Corporation, engages small businesses in its supply chain for components or services.
Oversight & Accountability
Oversight for this contract would primarily reside with the U.S. Coast Guard contracting and program management offices. As a federal procurement, it is subject to oversight by the Government Accountability Office (GAO) for bid protests and potential audits. The Department of Homeland Security's Inspector General (IG) also has jurisdiction to investigate fraud, waste, and abuse within its agencies, which could include this contract. Transparency is facilitated through contract databases like FPDS, where award details are publicly available.
Related Government Programs
- U.S. Coast Guard Cutter Procurement
- National Security Cutter Program
- Fast Response Cutter Program
- Maritime Patrol Aircraft Procurement
- Homeland Security Vessel Acquisitions
Risk Flags
- Potential for cost overruns if production complexities are underestimated.
- Risk of schedule delays due to supply chain or labor issues.
- Limited competition may impact long-term price competitiveness.
- Need for robust quality assurance to meet operational standards.
Tags
defense, coast-guard, vessel-acquisition, patrol-boat, full-and-open-competition, firm-fixed-price, delivery-order, wisconsin, shipbuilding, maritime-security, medium-value
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $63.6 million to MARINETTE MARINE CORPORATION. PURCHASE RB-M HULLS 45667-45696
Who is the contractor on this award?
The obligated recipient is MARINETTE MARINE CORPORATION.
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 $63.6 million.
What is the period of performance?
Start: 2010-04-22. End: 2012-07-31.
What are the specific capabilities and intended operational roles of the RB-M HULLS purchased under this contract?
The 'RB-M HULLS' likely refers to Response Boat-Medium hulls, a class of vessels used by the U.S. Coast Guard for various missions including law enforcement, search and rescue, and port security. These boats are typically designed for near-shore and coastal operations, offering a balance of speed, maneuverability, and payload capacity. Their specific capabilities would include intercepting small vessels, responding to distress calls, and providing a platform for boarding teams. The 'RB-M' designation suggests a standardized design intended for efficient production and deployment across different Coast Guard units, enhancing operational readiness and interoperability.
How does the per-unit cost of approximately $2.12 million compare to other recent procurements of similar patrol boats by the U.S. Coast Guard or other agencies?
A direct comparison of the $2.12 million per-unit cost is difficult without precise specifications for the RB-M HULLS and a clear understanding of the provided benchmark (br: 76519). The benchmark value of $7,651,900 appears significantly higher, suggesting it might relate to a different class of vessel (e.g., larger cutters or specialized craft) or perhaps includes a broader scope of services beyond just the hull. However, if the $2.12 million figure represents the total cost per vessel including outfitting and systems, it would need to be benchmarked against other medium-sized patrol or response craft procurements. Generally, patrol boats can range widely in cost based on size, speed, equipment (sensors, weapons), and construction materials. Further investigation into the specific requirements and market rates for 25-40 foot patrol vessels would be necessary for a robust comparison.
What factors might have contributed to only three bids being submitted for this full and open competition?
Several factors could explain the limited number of bidders (3) in this full and open competition. Firstly, the market for specialized patrol boat construction might be inherently concentrated, with only a few shipyards possessing the necessary expertise, facilities, and security clearances to build vessels meeting Coast Guard standards. Secondly, the specific technical requirements or performance specifications outlined in the solicitation could have excluded potential bidders who did not meet stringent criteria. Thirdly, the contract's value and duration might not have been sufficiently attractive to draw a larger pool of competitors, especially if significant upfront investment was required. Finally, the timing of the solicitation relative to other major shipbuilding programs could have impacted shipyard capacity and availability.
What is the track record of Marinette Marine Corporation in delivering complex shipbuilding contracts for government agencies?
Marinette Marine Corporation, now part of Fincantieri Marinette Marine, has a significant track record in shipbuilding, particularly for U.S. military and government contracts. They have been involved in constructing various vessels, including Littoral Combat Ships (LCS) for the U.S. Navy and the U.S. Coast Guard's Polar Security Cutters. Their experience includes managing large-scale projects, adhering to complex specifications, and navigating the challenges of defense shipbuilding. While specific performance details for every contract are not always public, their continued selection for major programs suggests a demonstrated capability to deliver large and complex vessels. However, like many large shipbuilding programs, their projects have also faced scrutiny regarding cost and schedule adherence, which is common in this industry.
How does the delivery timeline of 831 days for 30 boats translate to production efficiency and potential risks?
The contract duration of 831 days for 30 boats averages approximately 27.7 days per boat. This timeline suggests a relatively rapid production schedule, especially if it includes the entire process from hull construction to final outfitting and testing. Such efficiency could be achieved through modular construction techniques, parallel production lines, or if the 'hulls' represent a less complex stage of the build. However, an aggressive schedule also increases the risk of quality control issues, delays due to supply chain disruptions, or potential strain on labor resources. The Coast Guard's acceptance of this timeline implies confidence in the contractor's ability to meet it, but it remains a critical performance metric to monitor throughout the contract's execution.
What are the potential implications of this contract on the broader U.S. Coast Guard fleet modernization strategy?
The acquisition of 30 RB-M HULLS signifies a tangible step in the U.S. Coast Guard's ongoing fleet modernization efforts. These patrol boats are likely intended to replace aging assets or expand the service's capacity in critical operational areas. By procuring a standardized class of vessels, the Coast Guard aims to improve maintainability, reduce training requirements, and ensure consistent operational capabilities across its various units. This contract contributes to the overall goal of maintaining a modern, capable, and ready fleet to meet evolving maritime security challenges, complementing larger acquisitions like the Offshore Patrol Cutters and Polar Security Cutters.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Boat Building
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Consiglio Nazionale Delle Ricerche (UEI: 655149347)
Address: 1600 ELY ST, MARINETTE, WI, 54143
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $63,587,689
Exercised Options: $63,587,689
Current Obligation: $63,587,689
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HSCG2306DARB001
IDV Type: IDC
Timeline
Start Date: 2010-04-22
Current End Date: 2012-07-31
Potential End Date: 2012-07-31 00:00:00
Last Modified: 2021-05-11
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