DHS awards $8.87M contract for National Security Cutter program management support to McHenry Management Group

Contract Overview

Contract Amount: $8,871,081 ($8.9M)

Contractor: THE Mchenry Management Group, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2024-09-28

End Date: 2026-09-27

Contract Duration: 729 days

Daily Burn Rate: $12.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NATIONAL SECURITY CUTTER OBTAINS CONTRACTOR PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE USCG.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20593

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $8.9 million to THE MCHENRY MANAGEMENT GROUP, LLC for work described as: NATIONAL SECURITY CUTTER OBTAINS CONTRACTOR PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE USCG. Key points: 1. Contract provides essential program management support for the U.S. Coast Guard's National Security Cutter program. 2. The contract was awarded using full and open competition, indicating a competitive bidding process. 3. McHenry Management Group, LLC, a relatively small firm, secured this significant contract. 4. The contract duration is 729 days, suggesting a medium-term engagement. 5. The award type is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework. 6. The contract is firm-fixed-price, which shifts cost risk to the contractor. 7. The contract is not set aside for small businesses, nor does it appear to have specific small business subcontracting requirements based on the provided data.

Value Assessment

Rating: good

The contract value of $8.87 million over approximately two years for program management support is within a reasonable range for specialized services. Benchmarking against similar contracts for large-scale maritime asset program support would be necessary for a precise value-for-money assessment. However, the firm-fixed-price structure suggests the government has negotiated a defined cost, transferring some financial risk to the contractor. The absence of extensive raw dollar figures makes direct comparison difficult, but the scope appears aligned with the complexity of managing a major cutter program.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition after Exclusion of Sources,' which is a specific type of competitive procurement. This suggests that while the competition was intended to be broad, there might have been specific reasons for excluding certain sources, possibly related to existing contracts or specific capabilities. The presence of 5 offers indicates a moderate level of competition for this specialized service. A higher number of bidders typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: The use of full and open competition, even with exclusions, generally benefits taxpayers by encouraging multiple firms to bid, which can drive down prices and improve service quality.

Public Impact

The U.S. Coast Guard benefits from enhanced program management for its National Security Cutter fleet. This contract ensures continued operational readiness and effective management of a critical national security asset. The services provided will support the sustainment and potential future upgrades of the National Security Cutters. The contract's impact is primarily within the federal government and the defense/maritime industry, with indirect benefits to national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition if 'Exclusion of Sources' was overly restrictive.
Reliance on a single contractor for critical program management functions could pose a risk if performance falters.
The firm-fixed-price nature requires careful monitoring to ensure scope creep is managed effectively.

Positive Signals

Awarded through a competitive process, suggesting a fair selection.
Firm-fixed-price contract aligns incentives and manages cost risk.
Contract duration provides stability for program management continuity.
McHenry Management Group's specialization in engineering services (NAICS 541330) suggests relevant expertise.

Sector Analysis

The National Security Cutter program is a significant component of the U.S. Coast Guard's maritime security and law enforcement capabilities. This contract falls within the Engineering Services sector (NAICS 541330), which encompasses a wide range of professional services for the design, development, and management of complex systems. The market for such specialized program management support is competitive, with numerous firms offering expertise in defense and maritime program execution. Spending in this area is critical for maintaining and modernizing the nation's fleet and ensuring operational effectiveness.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). The award to McHenry Management Group, LLC, a company that may be considered small depending on its specific size standards, does not automatically imply a small business set-aside. There is no explicit information on subcontracting plans for small businesses. This means opportunities for small businesses to participate as subcontractors may be limited unless voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Coast Guard and the Department of Homeland Security's contracting and program management offices. Transparency is facilitated through contract award databases like FPDS. Accountability measures are inherent in the firm-fixed-price contract type, which penalizes cost overruns by the contractor. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

National Security Cutter Program
U.S. Coast Guard Ship Acquisition
Maritime Security Programs
Defense Program Management Services
Engineering Consulting Services

Risk Flags

Potential for limited competition due to source exclusions.
Firm-fixed-price contracts require diligent oversight to prevent scope creep and ensure quality.
Contractor's past performance on similar large-scale programs needs verification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $8.9 million to THE MCHENRY MANAGEMENT GROUP, LLC. NATIONAL SECURITY CUTTER OBTAINS CONTRACTOR PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE USCG.

Who is the contractor on this award?

The obligated recipient is THE MCHENRY MANAGEMENT GROUP, 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 $8.9 million.

What is the period of performance?

Start: 2024-09-28. End: 2026-09-27.

What is the track record of The McHenry Management Group, LLC in supporting large-scale federal programs, particularly within the maritime or defense sectors?

The provided data indicates The McHenry Management Group, LLC (MMG) has been awarded this $8.87 million contract for program management support services for the U.S. Coast Guard's National Security Cutter program. MMG's North American Industry Classification System (NAICS) code is 541330, which corresponds to Engineering Services. This suggests a focus on technical and management expertise relevant to complex projects. While the data doesn't detail MMG's entire contract history, the award of a firm-fixed-price delivery order under full and open competition for a critical program like the National Security Cutters implies a level of demonstrated capability and past performance that met the Coast Guard's requirements. Further investigation into MMG's contract portfolio, client feedback, and project outcomes would be necessary to fully assess their track record, especially concerning large-scale maritime or defense initiatives.

How does the awarded amount of $8.87 million compare to the typical cost of similar program management support contracts for major naval or coast guard vessels?

The $8.87 million contract value for program management support over approximately two years (729 days) for the National Security Cutter program appears to be a moderate investment for such specialized services. Benchmarking requires detailed comparison with contracts for similar platforms (e.g., other cutters, frigates, or patrol vessels) and similar service scopes (program management, systems engineering, logistics support). However, contracts for managing the acquisition, sustainment, or modernization of major naval assets can range from millions to tens of millions of dollars annually, depending on the program's phase, complexity, and the contractor's scope of work. Given the National Security Cutter's role and complexity, this award suggests a focused support effort rather than comprehensive program oversight, making it potentially cost-effective if it delivers targeted value.

What are the primary risks associated with this contract, considering its firm-fixed-price nature and the specific services being procured?

The primary risks associated with this firm-fixed-price contract revolve around potential scope creep and the contractor's ability to deliver within the agreed-upon budget and timeline. While firm-fixed-price shifts cost overrun risk to the contractor, it can incentivize them to cut corners on quality or service if not managed diligently. For program management support, risks include inadequate identification of project dependencies, insufficient risk mitigation planning, or delays in critical decision-making processes, which could indirectly impact the National Security Cutter program's schedule and cost. The 'Exclusion of Sources' aspect of the competition also presents a risk if it unduly limited the pool of qualified bidders, potentially leading to a less optimal selection or higher price than a truly open competition might yield.

How effective is the 'Full and Open Competition after Exclusion of Sources' method in ensuring optimal value for taxpayers in this specific instance?

The 'Full and Open Competition after Exclusion of Sources' method aims to balance broad competition with specific procurement needs. In this case, it suggests that while the U.S. Coast Guard sought bids from a wide range of qualified contractors, certain entities were intentionally excluded, possibly due to security, existing relationships, or specialized requirements not met by all potential bidders. This approach can be effective if the exclusions are well-justified and the remaining pool of bidders is still robust enough to drive competitive pricing and innovation. The fact that 5 offers were received indicates a reasonable level of competition. However, the effectiveness for taxpayers hinges on whether the exclusions prevented potentially more competitive or capable firms from participating, which could have led to a higher price or less optimal service delivery than a truly unrestricted competition might have achieved.

What are the historical spending patterns for program management support services related to the National Security Cutter program or similar Coast Guard assets?

Historical spending data for program management support specifically for the National Security Cutter (NSC) program is not detailed in the provided information. However, the NSC program itself has faced significant cost and schedule challenges over its lifecycle, often requiring extensive program management oversight. Agencies like the U.S. Coast Guard typically allocate funds for program management through various contract vehicles, including support services, systems engineering, and technical assistance. Spending patterns for such services are often tied to the program's phase (e.g., acquisition, sustainment, modernization) and can fluctuate based on program milestones and needs. Without access to detailed historical contract databases for the NSC program, it's difficult to establish precise spending trends, but it's reasonable to assume consistent investment in program management is required for such a high-value, complex asset.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 70Z02323R93210002

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 600 INDEPENDENCE PKWY STE 105, CHESAPEAKE, VA, 23320

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $22,789,962

Exercised Options: $8,871,081

Current Obligation: $8,871,081

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $3,922,290

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAD20D1029

IDV Type: IDC

Timeline