DHS awards $2.47M for Kongsberg jet drive parts, raising questions on competition and value

Contract Overview

Contract Amount: $2,471,302 ($2.5M)

Contractor: Kongsberg Maritime Inc

Awarding Agency: Department of Homeland Security

Start Date: 2026-01-23

End Date: 2026-08-14

Contract Duration: 203 days

Daily Burn Rate: $12.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SUPPLY OF KONGSBERG FF3755S JET DRIVE PARTS TO SUPPORT USCG 45' RB-M SMALL BOATS

Place of Performance

Location: CURTIS BAY, BALTIMORE CITY County, MARYLAND, 21226

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $2.5 million to KONGSBERG MARITIME INC for work described as: SUPPLY OF KONGSBERG FF3755S JET DRIVE PARTS TO SUPPORT USCG 45' RB-M SMALL BOATS Key points: 1. Sole-source award for critical USCG boat components suggests limited market alternatives. 2. High unit cost for specialized parts may indicate premium pricing due to unique requirements. 3. Contract duration of 203 days is relatively short, implying immediate operational needs. 4. Lack of competition could lead to suboptimal price discovery and potentially higher overall costs. 5. Performance risk appears moderate given the specific nature of parts supply. 6. This contract supports essential maintenance for the USCG's operational fleet.

Value Assessment

Rating: fair

The contract value of $2.47 million for jet drive parts appears significant for a sole-source award. Benchmarking the per-unit cost is challenging without specific part numbers and quantities, but the total award suggests a substantial need for these specialized components. Given the lack of competition, it's difficult to definitively assess value for money, but the price is likely influenced by the proprietary nature of the equipment and the urgency of the USCG's operational requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, Kongsberg Maritime Inc., was deemed capable of providing the required jet drive parts. This approach is typically used when a product is proprietary, or there are unique compatibility requirements that limit the pool of potential suppliers. The lack of a competitive bidding process means that price discovery was not optimized, and the government did not benefit from multiple offers.

Taxpayer Impact: Taxpayers may be paying a premium for these parts due to the absence of competitive pressure. Without competing bids, there is less assurance that the price reflects the lowest possible cost for the required goods.

Public Impact

The U.S. Coast Guard benefits from the timely supply of critical parts to maintain its fleet of 45' RB-M small boats. Operational readiness of Coast Guard vessels is enhanced, ensuring continued maritime security and law enforcement missions. The contract supports the maintenance and repair of specialized marine propulsion systems. Geographic impact is primarily focused on Coast Guard operational bases where these boats are deployed. Workforce implications are indirect, supporting the technicians and personnel responsible for boat maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to limited competition.
Potential for over-reliance on a single supplier for critical components.

Positive Signals

Ensures availability of specialized parts for critical Coast Guard assets.
Directly supports the operational readiness of essential maritime security platforms.
Addresses a specific, identified need for maintenance and repair.

Sector Analysis

This contract falls within the Mechanical Power Transmission Equipment Manufacturing sector, specifically supporting specialized marine propulsion systems. The market for such proprietary parts is often limited to the original equipment manufacturer or authorized distributors. Spending in this niche is driven by the operational tempo and maintenance schedules of maritime agencies. Comparable spending benchmarks are difficult to establish due to the specialized nature of the parts and the sole-source procurement method.

Small Business Impact

This contract was not competed and there is no indication of small business set-aside or subcontracting requirements. As a sole-source award to a large corporation (Kongsberg Maritime Inc.), it does not directly benefit the small business ecosystem. There are no explicit provisions for small business participation in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's procurement regulations and the U.S. Coast Guard's internal quality assurance processes. Given it's a sole-source award, the primary oversight focus would be on ensuring the necessity of the sole-source justification and the reasonableness of the price. Transparency is limited due to the lack of competition. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USCG Boat Maintenance and Repair
Marine Propulsion Systems Procurement
Department of Homeland Security Supply Chain Management
Maritime Security Vessel Operations

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for inflated pricing
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $2.5 million to KONGSBERG MARITIME INC. SUPPLY OF KONGSBERG FF3755S JET DRIVE PARTS TO SUPPORT USCG 45' RB-M SMALL BOATS

Who is the contractor on this award?

The obligated recipient is KONGSBERG MARITIME 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 $2.5 million.

What is the period of performance?

Start: 2026-01-23. End: 2026-08-14.

What is the specific justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically stems from the proprietary nature of the equipment, requiring parts exclusively manufactured or supplied by Kongsberg Maritime Inc. This could be due to unique technical specifications, intellectual property rights, or essential interoperability requirements with existing U.S. Coast Guard (USCG) assets, specifically the 45' RB-M small boats. Without a competitive bidding process, the government must ensure that the sole-source justification is robust and that the selected vendor is the only viable option to meet the critical operational needs of the USCG. This often involves detailed technical assessments and market research to confirm the absence of alternatives.

How does the unit cost of these Kongsberg FF3755S jet drive parts compare to similar components in the market?

Direct comparison of unit costs for the Kongsberg FF3755S jet drive parts is challenging due to the sole-source nature of this award and the lack of publicly available pricing data for these specific components. Specialized marine propulsion parts, especially those tied to a particular manufacturer's system, often command higher prices than more commoditized equipment. Factors such as proprietary technology, limited production runs, and the critical need for operational readiness can influence pricing. Without access to competitive bids or a broader market analysis of similar specialized marine drive components, it is difficult to benchmark the value effectively. The $2.47 million total award suggests a significant investment, but the per-unit cost remains unverified against market alternatives.

What are the potential risks associated with relying on a sole-source supplier for critical boat parts?

Relying on a sole-source supplier like Kongsberg Maritime Inc. for critical parts carries several risks. Firstly, it eliminates competitive pressure, potentially leading to higher prices and reduced incentives for the supplier to innovate or improve efficiency. Secondly, it creates a dependency; any supply chain disruptions, production issues, or significant price increases by the sole supplier can directly impact the operational readiness of the U.S. Coast Guard's 45' RB-M boats. Thirdly, it limits the government's flexibility in seeking alternative solutions or negotiating more favorable terms. Long-term, this can also hinder the development of a broader market for maintenance and repair services, potentially increasing long-term sustainment costs.

What is the historical spending pattern for Kongsberg jet drive parts by the USCG or DHS?

Historical spending data for Kongsberg jet drive parts by the U.S. Coast Guard (USCG) or the Department of Homeland Security (DHS) is not explicitly detailed in the provided data. However, the nature of this award suggests a recurring need for these specific components to maintain the operational fleet of 45' RB-M small boats. Analyzing past contracts for similar parts, or for the maintenance of these specific vessels, could provide context on the frequency and value of such procurements. Without access to a comprehensive contract database or specific historical reports, it's difficult to establish a precise spending trend. The current award indicates an ongoing requirement for these specialized parts.

How does this contract contribute to the overall mission effectiveness of the U.S. Coast Guard?

This contract directly contributes to the mission effectiveness of the U.S. Coast Guard by ensuring the operational readiness of its 45' RB-M small boats. These vessels are crucial for a variety of missions, including maritime law enforcement, search and rescue, port security, and drug interdiction. By providing essential jet drive parts, the contract enables the Coast Guard to maintain its fleet, preventing downtime and ensuring that these assets are available when needed. Reliable propulsion is fundamental to the performance and safety of these boats, directly supporting the Coast Guard's ability to execute its diverse and critical responsibilities in safeguarding U.S. waters and interests.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Mechanical Power Transmission Equipment Manufacturing

Product/Service Code: SHIP AND MARINE EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kongsberg Gruppen ASA

Address: 10777 WESTHEIMER RD STE 1200, HOUSTON, TX, 77042

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $2,471,302

Exercised Options: $2,471,302

Current Obligation: $2,471,302

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z04023D57100B00

IDV Type: IDC

Timeline