DHS Coast Guard's $227M sole-source contract for RESCUE 21 support awarded to General Dynamics

Contract Overview

Contract Amount: $226,769,250 ($226.8M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2012-04-01

End Date: 2016-08-31

Contract Duration: 1,613 days

Daily Burn Rate: $140.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESCUE 21 - SUPPORT&SUSTAINMENT CONTRACT RFP SOLE SOURCE TO GDC4S

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Homeland Security obligated $226.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: RESCUE 21 - SUPPORT&SUSTAINMENT CONTRACT RFP SOLE SOURCE TO GDC4S Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Significant investment in a critical communication system for maritime safety. 3. Long contract duration (over 4 years) suggests a need for sustained support. 4. Firm Fixed Price contract type aims to control costs, but sole-source nature raises concerns. 5. Focus on sustainment and support indicates ongoing operational reliance. 6. Awarded to a single vendor, potentially missing out on cost savings from competition.

Value Assessment

Rating: fair

The contract value of approximately $227 million over its duration represents a substantial investment in maintaining the RESCUE 21 system. Without competitive bidding, it is difficult to benchmark the value for money. However, the firm fixed-price structure suggests an attempt to cap costs. Comparisons to similar sole-source sustainment contracts for complex communication systems would be necessary for a more definitive value assessment. The lack of competition inherently introduces a risk of overpayment compared to a fully competed scenario.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of adequate competition. In this case, the specific nature of supporting the RESCUE 21 system likely led to the decision to award to a single vendor. The lack of multiple bidders means that the government did not benefit from the price pressures that typically arise in a competitive procurement process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competition. Without a bidding process, there is less assurance that the price reflects the lowest possible cost for the required services.

Public Impact

Benefits the U.S. Coast Guard by ensuring the continued operation and support of the critical RESCUE 21 search and rescue communication system. Delivers essential sustainment and support services, crucial for maintaining the readiness and effectiveness of maritime search and rescue operations. Geographic impact is nationwide, covering all areas where the Coast Guard operates and RESCUE 21 is deployed. Workforce implications include the need for specialized technical personnel to maintain and support the complex communication infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification process.
Potential for vendor lock-in due to the specialized nature of the system support.
Long-term reliance on a single contractor for critical infrastructure.

Positive Signals

Firm Fixed Price contract type helps to control costs within the agreed-upon scope.
Focus on sustainment ensures the continued availability of a vital public safety system.
Award to an established contractor (General Dynamics) may indicate a track record of performance.

Sector Analysis

The RESCUE 21 system falls under the telecommunications and command and control sector, specifically supporting public safety and maritime operations. This contract represents a significant portion of spending for sustainment of such specialized communication infrastructure. Comparable spending benchmarks would involve analyzing other large-scale, sole-source sustainment contracts for critical government communication systems, which often command substantial long-term investments.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature of the award further reduces the likelihood of small business participation through subcontracting opportunities, as the primary contract is with a large, established defense contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting oversight mechanisms and the U.S. Coast Guard's program management. Transparency is limited due to the sole-source nature. Accountability measures would be defined by the contract terms and performance metrics. Inspector General jurisdiction would apply to investigate any potential fraud, waste, or abuse.

Related Government Programs

RESCUE 21 System
Maritime Communications Systems
Search and Rescue Technology
Department of Homeland Security IT Contracts
U.S. Coast Guard Operations Support

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns despite FFP
Contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $226.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. RESCUE 21 - SUPPORT&SUSTAINMENT CONTRACT RFP SOLE SOURCE TO GDC4S

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS MISSION SYSTEMS, INC..

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 $226.8 million.

What is the period of performance?

Start: 2012-04-01. End: 2016-08-31.

What is the specific justification for the sole-source award of the RESCUE 21 support contract to General Dynamics Mission Systems?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is sole-source. While the specific justification document is not included, sole-source awards are typically granted when only one responsible source is available or capable of meeting the agency's needs. For complex systems like RESCUE 21, this could be due to proprietary technology, unique expertise held by the contractor, or a determination that the system's architecture is so specialized that only the original equipment manufacturer or a highly specialized entity can provide adequate support and sustainment. The U.S. Coast Guard would have had to document this justification to comply with federal procurement regulations, likely citing reasons such as the need for continuity of operations, specialized knowledge of the system's intricacies, or the unavailability of other qualified vendors.

How does the firm fixed-price (FFP) contract type mitigate risks in a sole-source scenario for RESCUE 21 sustainment?

A Firm Fixed-Price (FFP) contract type is generally advantageous for the government as it shifts the risk of cost overruns to the contractor. In a sole-source situation like the RESCUE 21 support contract, where competitive pricing is absent, the FFP structure provides a degree of cost certainty. The contractor is obligated to perform the work for the agreed-upon price, regardless of their actual costs. This incentivizes the contractor to manage their own expenses efficiently. However, it does not eliminate the risk that the initial FFP price might have been set higher than it would have been in a competitive environment due to the lack of market pressure.

What is the historical spending pattern for RESCUE 21 support and sustainment by the U.S. Coast Guard?

The provided data covers a single contract for RESCUE 21 Support & Sustainment from April 1, 2012, to August 31, 2016, with a total value of $226,769,250.37. This represents a significant expenditure over approximately 4.5 years. To understand the broader historical spending pattern, one would need to examine previous contracts for RESCUE 21 sustainment prior to 2012, as well as any subsequent contracts awarded after August 2016. Analyzing these periods would reveal trends in contract duration, value, competition levels, and the specific services procured for maintaining this critical system.

What are the potential performance risks associated with a sole-source sustainment contract for a critical system like RESCUE 21?

Sole-source sustainment contracts for critical systems like RESCUE 21 carry several performance risks. Firstly, without competition, the contractor may have less incentive to innovate or improve service delivery beyond the minimum contractual requirements. Secondly, the government is heavily reliant on the contractor's capabilities and goodwill; if the contractor faces financial difficulties or decides to exit the market, finding a replacement could be extremely challenging and costly. Thirdly, the lack of market validation means the government cannot easily assess if alternative solutions or better performance levels are available elsewhere. Finally, the contractor might prioritize other, more competitive contracts, potentially impacting the responsiveness and quality of support for RESCUE 21.

How does the geographic location of the contract (Arizona) relate to the RESCUE 21 system's operations?

The data indicates the contract's place of performance or contractor location is Arizona (ST: AZ, SN: ARIZONA). The RESCUE 21 system is a nationwide maritime communication system used by the U.S. Coast Guard for search and rescue operations. While the system's operational reach is national, the specific location of the contractor or a key support facility in Arizona suggests that General Dynamics Mission Systems may have a significant operational hub or administrative center there for managing this contract. This could involve technical support, logistics, or program management functions being based in Arizona, even though the system's deployment and use are distributed across U.S. coastlines and waterways.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 8201 E MCDOWELL ROAD, SCOTTSDALE, AZ, 85257

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $447,469,294

Exercised Options: $446,517,623

Current Obligation: $226,769,250

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline