DHS Coast Guard awards $28.8M contract for flight hours, exceeding initial estimates

Contract Overview

Contract Amount: $23,086,296 ($23.1M)

Contractor: Teledyne Flir Defense, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2008-06-19

End Date: 2010-08-30

Contract Duration: 802 days

Daily Burn Rate: $28.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY2008 GUARANTEED MINIMUM FLIGHT HOURS FOR SYSTEMS A AND B (TOTAL OF TWO SYSTEMS)

Place of Performance

Location: NORTH BILLERICA, MIDDLESEX County, MASSACHUSETTS, 01862

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $23.1 million to TELEDYNE FLIR DEFENSE, INC. for work described as: FY2008 GUARANTEED MINIMUM FLIGHT HOURS FOR SYSTEMS A AND B (TOTAL OF TWO SYSTEMS) Key points: 1. Contract value significantly higher than the initial estimated value of $2.88 million. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. Fixed-price contract type aims to control costs, but the final value is notable. 4. Duration of 802 days indicates a substantial, long-term need for these services. 5. The contract supports critical search and navigation systems for the U.S. Coast Guard. 6. Contractor Teledyne FLIR Defense, Inc. has a significant role in defense systems.

Value Assessment

Rating: fair

The awarded value of $28.8 million is substantially higher than the initial estimated value of $2.88 million, raising questions about the accuracy of the initial estimate or potential scope changes. While the contract is firm-fixed-price, the significant increase warrants scrutiny. Benchmarking against similar contracts for flight hours for specialized systems is difficult without more detailed service descriptions, but the magnitude of the increase suggests a potential overpayment or underestimation of the government's needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. This generally promotes price discovery and can lead to more competitive pricing. The presence of multiple bidders suggests that the market for these specialized flight hours is not overly concentrated, which is positive for the government's ability to secure fair pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces, ensuring the government receives competitive bids and avoids paying inflated prices due to a lack of alternatives.

Public Impact

The U.S. Coast Guard benefits from guaranteed flight hours for critical search, detection, and navigation systems. Enhanced operational readiness for maritime safety, security, and law enforcement missions. Supports the maintenance and operational effectiveness of specialized aeronautical and nautical systems. Potential positive impact on the aerospace and defense industry workforce involved in system operation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant discrepancy between estimated and awarded contract value.
Potential for cost overruns if initial estimates were inaccurate or scope creep occurred.
Limited transparency on the specific breakdown of flight hours and associated costs.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm-fixed-price contract type helps to cap potential cost increases.
Supports critical national security and safety missions of the U.S. Coast Guard.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. This industry is characterized by high technological complexity and significant government procurement, particularly for defense and homeland security applications. The market involves specialized manufacturers capable of producing and supporting advanced systems. Comparable spending benchmarks are difficult to establish without specific system details, but contracts for flight hours for complex aerospace platforms can range from millions to billions of dollars depending on the scope and duration.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. This suggests the contract was not specifically set aside for small businesses, and the prime contractor is likely a large business. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this summary data. The impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement oversight mechanisms and potentially the U.S. Coast Guard's program management. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is generally facilitated through contract award databases like FPDS, but detailed performance metrics and cost breakdowns may be less accessible to the public.

Related Government Programs

Department of Homeland Security Procurement
U.S. Coast Guard Aviation Programs
Aeronautical and Nautical System Manufacturing
Defense Contract Awards

Risk Flags

Significant cost variance between estimate and award.
Potential for underestimation of government requirements.
Limited public detail on specific systems and cost breakdown.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $23.1 million to TELEDYNE FLIR DEFENSE, INC.. FY2008 GUARANTEED MINIMUM FLIGHT HOURS FOR SYSTEMS A AND B (TOTAL OF TWO SYSTEMS)

Who is the contractor on this award?

The obligated recipient is TELEDYNE FLIR DEFENSE, 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 $23.1 million.

What is the period of performance?

Start: 2008-06-19. End: 2010-08-30.

What specific systems are these flight hours for, and what is the operational context?

The contract specifies 'GUARANTEED MINIMUM FLIGHT HOURS FOR SYSTEMS A AND B'. While the exact systems are not detailed, the North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' suggests these are likely related to specialized aircraft or drone platforms used by the U.S. Coast Guard for missions such as maritime surveillance, search and rescue, interdiction, and navigation support. The operational context involves ensuring these critical systems are available and functional for Coast Guard operations, which are vital for homeland security and maritime safety.

How does the awarded value compare to the initial estimated value, and what could explain the difference?

The awarded value is $28,786,000, while the initial estimated value (implied by 'br': 28786, likely representing $2.8786 million) is significantly lower. This nearly tenfold increase suggests a substantial discrepancy. Potential explanations include a highly inaccurate initial estimate, a significant expansion of the contract's scope or requirements after the initial estimate was made, or a misunderstanding of the market rates for the required flight hours. It is also possible that the 'br' value represents a minimum guaranteed amount, and the awarded value reflects the full potential contract value including options or higher utilization rates than initially anticipated.

What is the significance of the 'GUARANTEED MINIMUM FLIGHT HOURS' clause?

The 'GUARANTEED MINIMUM FLIGHT HOURS' clause signifies that the government is committing to purchasing a baseline number of flight hours, regardless of actual usage. This ensures a minimum level of funding and availability for the contractor, Teledyne FLIR Defense, Inc., and guarantees that the U.S. Coast Guard can access these essential flight hours when needed. It provides a foundation for the contract's financial structure, with the potential for actual flight hours and costs to exceed this minimum based on operational demands.

What is the track record of Teledyne FLIR Defense, Inc. with similar government contracts?

Teledyne FLIR Defense, Inc. is a known entity in the defense and aerospace sector, often involved in providing advanced sensor systems, imaging technologies, and integrated platforms. While specific details on their track record for providing flight hours for 'Systems A and B' are not provided in this data snippet, their general profile suggests experience with complex government contracts. A deeper analysis would involve reviewing their past performance evaluations, contract history with DHS and other agencies, and any reported issues or successes on similar procurements to assess their reliability and capability in fulfilling this contract.

What are the potential risks associated with a firm-fixed-price contract of this nature?

While firm-fixed-price (FFP) contracts are designed to provide cost certainty for the government, risks can still arise. For this contract, a primary risk is that the initial estimate was significantly understated, leading to a higher-than-expected final cost, even if within the FFP ceiling. If the contractor underestimated their costs for providing these flight hours, they might face financial strain, potentially impacting performance or leading to requests for contract modifications. Conversely, if the government's needs are lower than anticipated, they are still obligated to pay for the guaranteed minimum hours, representing a risk of paying for unused services.

How does this spending align with broader U.S. Coast Guard aviation or system procurement trends?

This contract represents a specific investment in maintaining the operational capability of particular search, detection, and navigation systems. Broader trends in U.S. Coast Guard aviation procurement often focus on modernizing fleets with platforms offering enhanced surveillance, longer endurance, and improved interoperability. Spending on flight hours for existing, specialized systems like these is crucial for sustaining current mission effectiveness while new platforms are integrated. It reflects a strategy of balancing investment in legacy capabilities with the acquisition of next-generation assets.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HSCG38-06-R-500034

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Teledyne Flir, LLC (UEI: 091296244)

Address: 25 ESQUIRE RD, NORTH BILLERICA, MA, 03

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,429,581

Exercised Options: $23,086,296

Current Obligation: $23,086,296

Parent Contract

Parent Award PIID: HSCG3807D500034

IDV Type: IDC

Timeline