Coast Guard's $43.8M contract for navigation systems awarded to Integrated Coast Guard Systems LLC

Contract Overview

Contract Amount: $43,775,472 ($43.8M)

Contractor: Integrated Coast Guard Systems LLC

Awarding Agency: Department of Homeland Security

Start Date: 2004-08-11

End Date: 2004-08-14

Contract Duration: 3 days

Daily Burn Rate: $14.6M/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: NTNO FOR OPC

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $43.8 million to INTEGRATED COAST GUARD SYSTEMS LLC for work described as: NTNO FOR OPC Key points: 1. Value-for-money assessment indicates potential for cost efficiencies given the contract type. 2. Competition dynamics suggest a follow-on action, potentially limiting broader market engagement. 3. Risk indicators are moderate, with contract type and duration requiring careful monitoring. 4. Performance context is tied to essential search, detection, and navigation systems. 5. Sector positioning places this within the critical defense and maritime technology domain.

Value Assessment

Rating: good

The contract's Cost Plus Award Fee (CPAF) structure allows for performance-based incentives, potentially driving value. Benchmarking against similar navigation system contracts is challenging without more granular cost data, but the award amount appears reasonable for the scope. The $14.6M in obligated funds represents a significant portion of the total potential value, suggesting substantial initial commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is a 'FOLLOW ON TO COMPETED ACTION,' indicating that the initial award was competed, but this specific delivery order may have had limited competition. The number of bidders for this specific action is not detailed, but follow-on actions often involve fewer competitors than initial solicitations. This can impact price discovery and potentially lead to less aggressive pricing.

Taxpayer Impact: While the initial competition likely benefited taxpayers, subsequent follow-on actions with potentially limited competition warrant scrutiny to ensure continued cost-effectiveness.

Public Impact

Benefits the U.S. Coast Guard by providing essential search, detection, navigation, guidance, aeronautical, and nautical systems. Enhances maritime safety and security through improved operational capabilities. Impacts the defense and maritime technology sector by supporting a key government program. Supports a workforce involved in the development, manufacturing, and maintenance of advanced navigation instruments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if not managed closely.
Limited competition on follow-on actions could reduce pressure on pricing.
Dependence on a single contractor for critical navigation systems may pose supply chain risks.

Positive Signals

Award fee structure incentivizes contractor performance and potential cost savings.
Follow-on nature suggests a proven track record and established relationship with the contractor.
Focus on essential operational systems ensures direct contribution to Coast Guard mission success.

Sector Analysis

This contract falls within the broader defense and aerospace sector, specifically focusing on specialized maritime navigation and instrumentation. The market for such systems is characterized by high technological barriers to entry and significant government procurement. Comparable spending benchmarks would involve other large-scale procurements for naval or aviation systems, where costs can range widely based on complexity and quantity.

Small Business Impact

Information regarding small business set-asides or subcontracting plans for this specific action is not provided. As a follow-on to a competed action, the prime contractor, Integrated Coast Guard Systems LLC, may have existing subcontracting relationships. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight is likely managed by the U.S. Coast Guard contracting and program management offices. The Cost Plus Award Fee structure implies performance metrics and review processes. Transparency is facilitated through contract databases, though detailed performance reports are typically internal. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Coast Guard Command and Control Systems
Maritime Surveillance Systems
Aeronautical Navigation Equipment Procurement
Naval Instrument Manufacturing
Defense Communication Systems

Risk Flags

Potential for cost overruns in CPAF contracts.
Limited competition on follow-on actions.
Unclear full contract duration and potential value beyond initial award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $43.8 million to INTEGRATED COAST GUARD SYSTEMS LLC. NTNO FOR OPC

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 $43.8 million.

What is the period of performance?

Start: 2004-08-11. End: 2004-08-14.

What is the historical spending trend for navigation systems by the U.S. Coast Guard?

Analyzing historical spending on navigation systems by the U.S. Coast Guard reveals a consistent investment in maintaining and upgrading critical operational capabilities. While specific figures for 'navigation systems' can fluctuate year-to-year based on modernization cycles and new platform acquisitions, the overall trend indicates a sustained commitment. For instance, prior to this $43.8 million contract, the Coast Guard likely engaged in numerous smaller procurements and sustainment contracts for various navigation components. Over the last decade, spending in this category has likely been in the tens of millions annually, with peaks during major program overhauls or the introduction of new vessel or aircraft classes. This $43.8 million award represents a significant single investment within a given period, suggesting a substantial upgrade or a consolidation of requirements.

How does the performance of Integrated Coast Guard Systems LLC compare to industry benchmarks for similar contracts?

Assessing the performance of Integrated Coast Guard Systems LLC against industry benchmarks requires access to detailed performance metrics and historical data, which are not fully available in the public domain for this specific contract. However, the 'FOLLOW ON TO COMPETED ACTION' designation suggests a level of satisfaction with the contractor's previous performance, as follow-on awards typically stem from successful prior engagements. To conduct a thorough comparison, one would need to examine metrics such as on-time delivery, adherence to technical specifications, cost control relative to projections, and responsiveness to issues. Industry benchmarks for complex system integration and manufacturing in the defense sector often focus on factors like defect rates, system reliability, and the efficiency of the supply chain. Without specific performance reports or comparative data from similar contracts awarded to other entities, a definitive benchmark comparison remains qualitative.

What are the primary risks associated with this Cost Plus Award Fee (CPAF) contract?

The primary risks associated with this Cost Plus Award Fee (CPAF) contract revolve around cost control and the potential for scope creep. CPAF contracts reimburse the contractor for allowable costs plus a fee that is adjusted based on performance against pre-defined criteria. The risk of cost overruns is present if the contractor's actual costs exceed estimates, and the award fee mechanism, while intended to incentivize efficiency, can sometimes lead to ambiguity in performance evaluation. There's also a risk that the 'award' portion of the fee could be maximized even if true value-for-money is not achieved, depending on the clarity and rigor of the performance metrics. Furthermore, if the performance standards are not clearly defined or are subject to interpretation, it can lead to disputes and impact the overall cost-effectiveness for the government. Effective oversight and clearly defined metrics are crucial to mitigate these risks.

What is the estimated value of the contract over its full duration, considering all options?

The provided data indicates a total contract value of $43,775,472. This figure represents the ceiling value for the contract, encompassing all anticipated costs and the potential maximum award fee. The contract has a duration of 3 years, with a start date of August 11, 2004, and an end date of August 14, 2004. This end date seems unusually short and likely represents an initial period or a specific delivery order rather than the full contract duration. The 'no': 2 might indicate two contract periods or options. Without further details on contract modifications or specific option periods, it's difficult to ascertain the full potential value beyond the stated $43.8 million ceiling. However, for the purpose of this analysis, $43.8 million is the defined total value.

How does the procurement method ('FOLLOW ON TO COMPETED ACTION') impact the government's ability to secure competitive pricing?

The procurement method 'FOLLOW ON TO COMPETED ACTION' implies that the initial contract award was subject to full and open competition. This initial competition is crucial for establishing a baseline competitive price. However, for subsequent actions or delivery orders under that contract, the competition may be limited. This means that while the government likely secured a competitive price initially, the follow-on actions might not benefit from the same level of market pressure. The government may choose to sole-source or limit competition to the original awardee if it's deemed the most efficient approach (e.g., for compatibility, sustainment, or if only one vendor can meet specific needs). This can lead to higher prices on follow-on orders compared to what might be achieved in a new, fully competed solicitation. Therefore, the government's ability to secure competitive pricing on follow-on actions is reduced compared to the initial award.

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: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

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: $50,237,931

Exercised Options: $49,057,605

Current Obligation: $43,775,472

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DTCG2302C2DW001

IDV Type: IDC

Timeline