DHS Coast Guard Awards $105.7M for LLTM, Boosting Ship Building and Repair

Contract Overview

Contract Amount: $105,725,845 ($105.7M)

Contractor: Birdon America Inc

Awarding Agency: Department of Homeland Security

Start Date: 2024-05-30

End Date: 2034-09-30

Contract Duration: 3,775 days

Daily Burn Rate: $28.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Ship Building and Repair

Official Description: PURCHASE OF LLTM FOR WLR AND WLIC #1

Place of Performance

Location: NEW ORLEANS, JEFFERSON County, LOUISIANA, 70123

State: Louisiana Government Spending

Plain-Language Summary

Department of Homeland Security obligated $105.7 million to BIRDON AMERICA INC for work described as: PURCHASE OF LLTM FOR WLR AND WLIC #1 Key points: 1. Significant contract value of $105.7M awarded to BIRDON AMERICA INC. 2. Competition method: Full and Open Competition after Exclusion of Sources. 3. Risk: Long contract duration (2024-2034) may present performance and cost risks. 4. Sector: Primarily Ship Building and Repair (NAICS 336611).

Value Assessment

Rating: fair

The contract is a fixed-price with economic price adjustment, which can lead to cost overruns if not managed carefully. Benchmarking against similar ship building contracts is difficult without more specific details on the LLTM's scope.

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, suggesting a competitive process but with specific source exclusions. This method aims for best value but the exclusion could limit the pool of bidders and potentially impact price discovery.

Taxpayer Impact: Taxpayer funds are being utilized for a critical Coast Guard asset, with the potential for price adjustments impacting the final cost.

Public Impact

Enhances U.S. Coast Guard's operational capabilities with new LLTM. Supports the maritime industry and shipbuilding sector in Louisiana. Long-term contract ensures sustained support and potential for follow-on work.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10+ years) increases risk of cost escalation and performance degradation.
Economic price adjustment clause can lead to unpredictable cost increases.
Exclusion of sources in competition may limit competitive pressure.

Positive Signals

Awarded under Full and Open Competition, indicating a competitive process.
Supports critical Coast Guard mission requirements.
Contract located in Louisiana, potentially benefiting regional economy.

Sector Analysis

The Ship Building and Repair sector (NAICS 336611) is capital-intensive and often involves long-term, complex contracts. Spending in this sector is driven by defense, infrastructure, and commercial needs, with significant government investment typical for maritime assets.

Small Business Impact

The contract does not indicate any specific set-asides for small businesses. Given the scale and nature of ship building, it is likely that larger prime contractors will be involved, with potential subcontracting opportunities for small businesses.

Oversight & Accountability

The long duration of the contract necessitates robust oversight from the Department of Homeland Security and U.S. Coast Guard to ensure performance, manage costs, and verify compliance with contract terms.

Related Government Programs

Ship Building and Repairing
Department of Homeland Security Contracting
U.S. Coast Guard Programs

Risk Flags

Long-term contract duration (10+ years).
Economic Price Adjustment (EPA) clause.
Exclusion of sources in competition.
Large contract value ($105.7M).

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $105.7 million to BIRDON AMERICA INC. PURCHASE OF LLTM FOR WLR AND WLIC #1

Who is the contractor on this award?

The obligated recipient is BIRDON AMERICA 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 $105.7 million.

What is the period of performance?

Start: 2024-05-30. End: 2034-09-30.

What specific capabilities will the LLTM provide to the U.S. Coast Guard, and how do these align with current and future mission needs?

The LLTM (likely a Long-Lead Time Material) is crucial for the timely acquisition of major shipbuilding components. Its specific capabilities will directly support the Coast Guard's operational readiness and ability to perform its diverse missions, including maritime security, search and rescue, and law enforcement. Understanding the LLTM's role is key to assessing its value and ensuring it meets evolving operational requirements.

What are the primary risks associated with the economic price adjustment clause over a 10-year period, and what mitigation strategies are in place?

The primary risks of an economic price adjustment (EPA) clause over a decade include significant cost inflation for labor, materials, and overhead, potentially exceeding initial budget projections. Mitigation strategies should involve strict monitoring of economic indicators, clear definitions of adjustable components, regular performance reviews, and potentially caps on price increases to protect the government from excessive cost escalation.

How effectively will the 'Full and Open Competition after Exclusion of Sources' method ensure optimal value and innovation compared to unrestricted full and open competition?

This competition method aims to balance the benefits of broad competition with the need to exclude specific sources, perhaps due to security, past performance, or specialized capabilities. While it can still drive value, the exclusion inherently limits the bidder pool. Effectiveness in ensuring optimal value and innovation depends on the justification for exclusion and whether sufficient competition remains to drive competitive pricing and novel solutions.

Industry Classification

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

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 4965 KINGSTON ST, DENVER, CO, 80239

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $110,419,687

Exercised Options: $105,725,845

Current Obligation: $105,725,845

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z02323D93270001

IDV Type: IDC

Timeline