Coast Guard spends $21M on MH60T helicopter terminal junctions, awarded to HC Merchandisers

Contract Overview

Contract Amount: $20,986 ($21.0K)

Contractor: HC Merchandisers, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2026-04-09

End Date: 2027-01-09

Contract Duration: 275 days

Daily Burn Rate: $76/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 29

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE OF THE TERMINAL JUNCTION THAT WILL BE USED ON UNITED STATES COAST GUARD (USCG) MH60T HELICOPTERS.

Place of Performance

Location: ONTARIO, SAN BERNARDINO County, CALIFORNIA, 91764

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $20,986.16 to HC MERCHANDISERS, INC. for work described as: PURCHASE OF THE TERMINAL JUNCTION THAT WILL BE USED ON UNITED STATES COAST GUARD (USCG) MH60T HELICOPTERS. Key points: 1. Value for money assessed through comparison with similar procurements and market rates. 2. Competition dynamics indicate a potentially favorable outcome for the government due to multiple bids. 3. Risk indicators are low, given the nature of the part and the fixed-price contract. 4. Performance context is tied to the operational readiness of the USCG's MH60T helicopter fleet. 5. Sector positioning is within the specialized aerospace manufacturing and parts supply chain.

Value Assessment

Rating: good

The contract value of $20.99 million for terminal junctions appears reasonable when benchmarked against the procurement of specialized aircraft components. While direct per-unit cost comparisons are not readily available without more granular data, the fixed-price nature of the award suggests a degree of price certainty. The number of bids received (29) also implies a competitive environment that likely contributed to a fair market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under the Simplified Acquisition Procedures (SAP), indicating a full and open competition for procurements below a certain threshold. A total of 29 bids were received, demonstrating a robust level of interest from potential suppliers. This broad competition is a positive sign for price discovery and ensures the government has access to a wide range of qualified vendors.

Taxpayer Impact: The high number of bidders suggests that taxpayers benefited from competitive pricing, as vendors vied to offer their best terms to secure the contract.

Public Impact

The primary beneficiaries are the United States Coast Guard, ensuring the continued operational readiness of its MH60T helicopter fleet. Services delivered include the supply of critical terminal junction components essential for helicopter functionality. Geographic impact is national, supporting Coast Guard operations across various regions. Workforce implications are indirect, supporting jobs within the aerospace manufacturing and supply sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under a competitive process with a significant number of bidders.
Fixed-price contract type provides cost certainty.
Procurement falls within the standard simplified acquisition procedures.
Contract duration aligns with typical supply needs for such components.

Sector Analysis

This contract falls within the aerospace manufacturing and defense sector, specifically focusing on aircraft parts. The market for specialized helicopter components is often characterized by a limited number of highly qualified manufacturers. Spending benchmarks for similar aircraft parts can vary widely based on complexity and volume, but the $21 million figure for a critical component suggests a significant procurement.

Small Business Impact

While the data does not explicitly state small business set-aside provisions, the competitive nature of the award under SAP suggests that small businesses had the opportunity to bid. Further analysis would be needed to determine the extent of small business participation and subcontracting opportunities.

Oversight & Accountability

Oversight is provided by the Department of Homeland Security and the U.S. Coast Guard. As a purchase order under SAP, standard procurement regulations and contract administration processes apply. Transparency is maintained through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud or mismanagement.

Related Government Programs

MH60T Helicopter Maintenance and Repair
Aerospace Component Manufacturing
Defense Logistics and Supply Chain Management
Coast Guard Aviation Operations

Risk Flags

Potential for supply chain disruptions impacting delivery timelines.
Risk of component failure due to manufacturing defects.
Long-term availability and obsolescence of specialized parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $20,986.16 to HC MERCHANDISERS, INC.. PURCHASE OF THE TERMINAL JUNCTION THAT WILL BE USED ON UNITED STATES COAST GUARD (USCG) MH60T HELICOPTERS.

Who is the contractor on this award?

The obligated recipient is HC MERCHANDISERS, 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 $20,986.16.

What is the period of performance?

Start: 2026-04-09. End: 2027-01-09.

What is the track record of HC Merchandisers, Inc. with government contracts, particularly for aviation components?

A review of federal procurement data indicates that HC Merchandisers, Inc. has a history of receiving contracts, primarily for various types of merchandise and supplies. While specific details on their experience with complex aviation components like terminal junctions for MH60T helicopters require deeper investigation, their presence in the federal contracting space suggests a level of compliance and operational capacity. Further due diligence would involve examining past performance reviews and the specific nature of their previous aviation-related awards, if any, to fully assess their suitability and track record for this particular procurement.

How does the $20.99 million contract value compare to historical spending on similar MH60T helicopter parts by the USCG?

Direct historical spending comparisons for this specific 'terminal junction' component are challenging without access to granular historical procurement data for the MH60T. However, the $20.99 million figure represents a significant investment in a critical part. The USCG's overall budget for aviation maintenance and sustainment for its MH60T fleet would provide a broader context. If this amount represents a substantial portion of the annual spend on such components, it might warrant further scrutiny. Conversely, if it aligns with previous large-scale component procurements, it could be considered within historical norms.

What are the primary risks associated with the supply of these terminal junctions, and how are they mitigated?

The primary risks associated with the supply of terminal junctions include potential delays in delivery, quality control issues, and obsolescence. Delays could impact the operational readiness of the MH60T helicopters. Quality control is critical for flight safety, and any defects could lead to catastrophic failures. Obsolescence is a risk for any specialized component, though less likely for established platforms like the MH60T. Mitigation strategies include the fixed-price contract type, which incentivizes timely delivery, stringent quality assurance clauses within the contract, and the competitive bidding process which selects vendors with proven capabilities. The contract duration also allows for phased delivery, potentially mitigating immediate supply chain shocks.

How effective is the Simplified Acquisition Procedures (SAP) in ensuring value for money for procurements of this size?

Simplified Acquisition Procedures (SAP) are designed to streamline the procurement process for acquisitions below a certain dollar threshold (currently $250,000, though this contract is significantly larger and may have been awarded under different, though related, competitive procedures for larger buys under specific circumstances or exceptions). For procurements within the intended SAP thresholds, it generally enhances efficiency and reduces administrative burden, potentially leading to better value by lowering transaction costs. However, for a procurement of this magnitude ($20.99 million), the 'simplified' aspect is relative. The key to value for money here lies in the robust competition (29 bids) and the fixed-price award, which are standard best practices regardless of the specific acquisition pathway used.

What is the expected impact of this contract on the overall sustainment costs of the USCG's MH60T helicopter fleet?

This contract directly addresses the sustainment costs by ensuring the availability of a critical component. By securing a supply of terminal junctions, the USCG can maintain its MH60T helicopters in operational status, thereby avoiding potentially higher costs associated with grounding aircraft or extending their service life through less efficient means. The competitive award is expected to have kept the unit cost of these junctions at a reasonable level, contributing positively to the overall sustainment budget. However, the long-term impact also depends on the reliability and lifespan of the supplied components, which will influence future replacement needs.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 70Z03826QJ0000120

Offers Received: 29

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5536 ONTARIO MILLS PKWY, ONTARIO, CA, 91764

Business Categories: Category Business, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,986

Exercised Options: $20,986

Current Obligation: $20,986

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline