Coast Guard's $13.4M Polar Sea maintenance contract awarded to Puget Sound Commerce Center, Inc

Contract Overview

Contract Amount: $13,397,609 ($13.4M)

Contractor: Puget Sound Commerce Center, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2004-12-14

End Date: 2005-01-09

Contract Duration: 26 days

Daily Burn Rate: $515.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE

Sector: Other

Official Description: POLAR PHASED MAINTENANCE - POLAR SEA FY05 PMA PLANNING (CLIN 0007 / PMA EXECUTION (CLIN 0009) / NS REPAIRS (CLIN 0002AB) / MATERIAL PURCHASES (CLIN 0003AB)

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98134

State: Washington Government Spending

Plain-Language Summary

Department of Homeland Security obligated $13.4 million to PUGET SOUND COMMERCE CENTER, INC. for work described as: POLAR PHASED MAINTENANCE - POLAR SEA FY05 PMA PLANNING (CLIN 0007 / PMA EXECUTION (CLIN 0009) / NS REPAIRS (CLIN 0002AB) / MATERIAL PURCHASES (CLIN 0003AB) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive, which can incentivize cost control but also carries inherent risk. 3. The duration of 26 days indicates a short-term, focused maintenance or repair effort. 4. The award amount of $13.4M for a 26-day period warrants scrutiny for value for money. 5. The North American Industry Classification System (NAICS) code 336611 points to shipbuilding and repairing, a specialized sector. 6. The contract was awarded by the Department of Homeland Security, U.S. Coast Guard, indicating a national security-related function.

Value Assessment

Rating: questionable

The contract value of $13.4 million for a 26-day period appears high for routine maintenance. Without specific details on the scope of work (e.g., major repairs, overhaul, or specialized services), it is difficult to benchmark against similar contracts. The Cost Plus Incentive Fee (CPIF) contract type, while allowing for flexibility, can lead to higher costs if not managed rigorously. The awarded amount significantly exceeds the reported bid of $5.15 million, raising questions about the final cost drivers and potential overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of two bids suggests some level of competition, but the significant difference between the bids received and the final awarded amount warrants further investigation into the bidding process and cost escalation factors. The competitive nature should ideally drive down costs, but the final award value raises concerns.

Taxpayer Impact: Taxpayers benefit from a competitive process that should theoretically lead to better pricing. However, the substantial increase from the initial bid to the final award suggests potential inefficiencies or unforeseen costs that could impact the overall value for taxpayer dollars.

Public Impact

The U.S. Coast Guard benefits from the maintenance and repair of the Polar Sea vessel, ensuring operational readiness. Services delivered include planning, execution of Polar Phase Maintenance, and necessary repairs and material purchases. The geographic impact is primarily related to the operational area of the Polar Sea, likely involving polar regions. Workforce implications include skilled labor for ship repair and maintenance, potentially supporting maritime industry jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High awarded amount relative to initial bid suggests potential cost overruns or scope creep.
Cost Plus Incentive Fee (CPIF) contract type can lead to higher final costs if not tightly managed.
Short duration (26 days) for a significant dollar amount may indicate complex or urgent repairs.
Lack of detailed scope of work makes it difficult to assess the true value for money.
The difference between the bid amount and awarded amount needs further explanation.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible bidding process.
The contract addresses critical maintenance needs for a Coast Guard asset, ensuring operational capability.
Puget Sound Commerce Center, Inc. is the contractor, implying a specific expertise in this area.
The contract includes provisions for material purchases, ensuring necessary resources are available.

Sector Analysis

The shipbuilding and repairing sector (NAICS 336611) is capital-intensive and requires specialized expertise. Contracts for naval and coast guard vessels are a significant segment within this sector. Benchmarking this contract's value is challenging without detailed specifications, but large-scale repairs or maintenance on specialized vessels can command substantial costs. The U.S. government is a major customer for these services, often requiring adherence to stringent quality and performance standards.

Small Business Impact

There is no indication that this contract was set aside for small businesses, nor is there information on subcontracting plans. Given the specialized nature of ship repair and the substantial contract value, it is likely that larger, established firms would be the primary participants. Further analysis would be needed to determine if small business participation was encouraged or mandated through subcontracting.

Oversight & Accountability

Oversight for this contract would fall under the Department of Homeland Security and the U.S. Coast Guard's contracting and program management offices. The Inspector General's office for DHS would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency would depend on the public availability of contract modifications, performance reports, and final cost breakdowns, which are not detailed in the provided data.

Related Government Programs

U.S. Coast Guard Ship Maintenance Contracts
Department of Homeland Security Vessel Repair
Polar Class Icebreaker Maintenance
Naval Shipyard Services
Maritime Industry Support Contracts

Risk Flags

Significant cost increase from bid to award
High dollar value for short contract duration
Cost Plus Incentive Fee contract type risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $13.4 million to PUGET SOUND COMMERCE CENTER, INC.. POLAR PHASED MAINTENANCE - POLAR SEA FY05 PMA PLANNING (CLIN 0007 / PMA EXECUTION (CLIN 0009) / NS REPAIRS (CLIN 0002AB) / MATERIAL PURCHASES (CLIN 0003AB)

Who is the contractor on this award?

The obligated recipient is PUGET SOUND COMMERCE CENTER, 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 $13.4 million.

What is the period of performance?

Start: 2004-12-14. End: 2005-01-09.

What specific maintenance or repair activities were included in CLIN 0007 (PMA Planning), CLIN 0009 (PMA Execution), CLIN 0002AB (NS Repairs), and CLIN 0003AB (Material Purchases)?

The provided data abbreviates the CLINs as POLAR PHASED MAINTENANCE - POLAR SEA FY05 PMA PLANNING (CLIN 0007 / PMA EXECUTION (CLIN 0009) / NS REPAIRS (CLIN 0002AB) / MATERIAL PURCHASES (CLIN 0003AB). While the CLIN names suggest phased maintenance planning and execution, specific repairs, and material procurement for the Polar Sea vessel in FY05, the exact nature and scope of these activities are not detailed. For instance, 'NS Repairs' could range from minor hull patching to significant structural work. 'PMA Execution' likely refers to the implementation of a planned maintenance approach. Material purchases would cover components needed for these tasks. A full understanding requires access to the contract's Statement of Work (SOW).

How does the awarded amount of $13.4M compare to the initial bid of $5.15M, and what factors contributed to this significant increase?

The awarded amount of $13.4 million is substantially higher than the reported bid of $5.15 million (51.5% of the awarded value). This significant discrepancy suggests that either the initial bid was significantly underestimated, or the scope of work expanded considerably post-award, or there were unforeseen cost escalations. Under a Cost Plus Incentive Fee (CPIF) contract, the final cost is determined by actual allowable costs plus a fee that varies based on performance against targets. The increase could be due to factors such as the discovery of more extensive damage than initially assessed, the need for specialized materials not initially accounted for, or changes in labor requirements. A detailed cost breakdown and contract modification history would be necessary to fully explain this variance.

What is the typical cost range for similar phased maintenance and repair contracts for U.S. Coast Guard vessels of the Polar Sea's class?

Benchmarking the cost of this contract is challenging without specific details on the scope of work and the vessel's condition. However, maintenance and repair contracts for large government vessels, especially those operating in demanding environments like polar regions, can be substantial. The Polar Sea is an icebreaker, requiring specialized maintenance. A 26-day period for $13.4 million suggests highly intensive work. Comparable contracts for major overhauls or repairs on similar vessels might range from several million to tens of millions of dollars, depending on the complexity and duration. The reported bid of $5.15 million might represent a more typical cost for a less extensive scope, while the awarded amount points towards a more comprehensive or urgent set of repairs.

What are the potential risks associated with a Cost Plus Incentive Fee (CPIF) contract for this type of service?

CPIF contracts aim to incentivize cost efficiency by adjusting the contractor's fee based on performance relative to target cost and target profit. However, risks include potential for cost overruns if the target cost is set too high or if unforeseen issues arise that significantly increase actual costs. The contractor may still achieve a substantial profit even if costs exceed the target, provided they meet certain performance metrics. For the government, there's a risk of paying more than anticipated if cost controls are not rigorously monitored and if the incentive structure doesn't adequately align with the government's objectives. Effective oversight is crucial to manage these risks and ensure value for money.

What is the track record of Puget Sound Commerce Center, Inc. in performing similar government contracts, particularly for the U.S. Coast Guard or Department of Homeland Security?

Information regarding the specific track record of Puget Sound Commerce Center, Inc. for similar government contracts, especially with the U.S. Coast Guard or Department of Homeland Security, is not provided in the given data. A comprehensive assessment would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), contract history, and any reported issues or successes on previous government awards. This information is crucial for understanding their capability and reliability in executing complex maritime repair and maintenance projects.

What is the historical spending pattern for the Polar Sea vessel's maintenance and repair over the past five fiscal years?

The provided data only pertains to a specific contract awarded in FY05 for the Polar Sea. Historical spending patterns for the vessel's maintenance and repair over the past five fiscal years are not available. To analyze historical spending, one would need access to federal procurement databases that track all contracts awarded to or for the Polar Sea across different fiscal years. This would allow for an assessment of spending trends, frequency of major repair contracts, and overall maintenance costs over time, providing context for the FY05 award.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE (V)

Contractor Details

Address: 1801 16TH AVE SW, SEATTLE, WA, 07

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $13,397,609

Exercised Options: $13,397,609

Current Obligation: $13,397,609

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: YES

Timeline