Coast Guard's Fast Response Cutter Program: 26 Vessels Procured for $2.08 Billion

Contract Overview

Contract Amount: $2,075,724,899 ($2.1B)

Contractor: Bollinger Shipyards Lockport, L.L.C.

Awarding Agency: Department of Homeland Security

Start Date: 2016-05-04

End Date: 2026-06-02

Contract Duration: 3,681 days

Daily Burn Rate: $563.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: THE UNITED STATES COAST GUARD HAS A REQUIREMENT TO PROCURE UP TO TWENTY-SIX (26) FAST RESPONSE CUTTERS (FRCS) ON A FIRM FIXED PRICE (FFP) BASIS WITH AN ECONOMIC PRICE ADJUSTMENT (EPA). PHASE II OF THE FRC PROGRAM WILL COMPLETE THE FLEET FOR A TOTAL OF 58 CUTTERS.

Place of Performance

Location: LOCKPORT, LAFOURCHE County, LOUISIANA, 70374

State: Louisiana Government Spending

Plain-Language Summary

Department of Homeland Security obligated $2.08 billion to BOLLINGER SHIPYARDS LOCKPORT, L.L.C. for work described as: THE UNITED STATES COAST GUARD HAS A REQUIREMENT TO PROCURE UP TO TWENTY-SIX (26) FAST RESPONSE CUTTERS (FRCS) ON A FIRM FIXED PRICE (FFP) BASIS WITH AN ECONOMIC PRICE ADJUSTMENT (EPA). PHASE II OF THE FRC PROGRAM WILL COMPLETE THE FLEET FOR A TOTAL OF 58 CUTTERS. Key points: 1. The U.S. Coast Guard plans to acquire up to 26 Fast Response Cutters (FRCs) in Phase II, completing a fleet of 58. 2. Bollinger Shipyards Lockport, L.L.C. is the sole contractor for this phase, raising questions about competition. 3. The contract is a Firm Fixed Price with Economic Price Adjustment (EPA), potentially increasing costs due to market fluctuations. 4. This procurement falls under the Ship Building and Repairing sector, a critical area for national maritime security.

Value Assessment

Rating: fair

The contract is a Firm Fixed Price with Economic Price Adjustment. While FFP aims for cost certainty, the EPA clause allows for price adjustments based on economic factors, potentially impacting the final cost. Benchmarking against similar naval vessel procurements would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The data indicates 'FULL AND OPEN COMPETITION' for the overall FRC program, but Bollinger Shipyards is listed as the contractor for this specific phase. Further clarification is needed on whether this phase was competed or if Bollinger is the incumbent sole-source provider for Phase II.

Taxpayer Impact: The EPA clause introduces a risk of increased costs for taxpayers if economic conditions lead to significant price adjustments over the contract's duration.

Public Impact

Enhances U.S. Coast Guard's maritime security and response capabilities. Supports domestic shipbuilding industry and associated jobs. Ensures operational readiness for coastal and international patrols. Potential for cost overruns due to economic price adjustments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic Price Adjustment (EPA) clause introduces cost uncertainty.
Limited competition details for Phase II require clarification.
Sole contractor for Phase II may limit future competitive opportunities.

Positive Signals

Completes a critical fleet modernization program.
Supports domestic shipbuilding capabilities.
Firm Fixed Price structure provides a baseline cost control.

Sector Analysis

The procurement is within the Ship Building and Repairing sector (NAICS 336611). Spending in this sector is often characterized by large, complex contracts with long lead times and significant capital investment. Benchmarks for similar naval vessel procurements would be relevant for cost comparison.

Small Business Impact

The provided data does not indicate any specific provisions or set-asides for small businesses in this contract. Further investigation into subcontracting opportunities would be necessary to assess small business participation.

Oversight & Accountability

The contract is managed by the Department of Homeland Security, specifically the U.S. Coast Guard. Oversight would involve monitoring contract performance, adherence to specifications, and managing the Economic Price Adjustment clause to mitigate taxpayer risk.

Related Government Programs

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

Risk Flags

Potential for cost overruns due to EPA.
Lack of clarity on Phase II competition.
Sole contractor for Phase II may limit future competition.
Dependence on a single shipyard for a critical fleet component.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $2.08 billion to BOLLINGER SHIPYARDS LOCKPORT, L.L.C.. THE UNITED STATES COAST GUARD HAS A REQUIREMENT TO PROCURE UP TO TWENTY-SIX (26) FAST RESPONSE CUTTERS (FRCS) ON A FIRM FIXED PRICE (FFP) BASIS WITH AN ECONOMIC PRICE ADJUSTMENT (EPA). PHASE II OF THE FRC PROGRAM WILL COMPLETE THE FLEET FOR A TOTAL OF 58 CUTTERS.

Who is the contractor on this award?

The obligated recipient is BOLLINGER SHIPYARDS LOCKPORT, L.L.C..

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 $2.08 billion.

What is the period of performance?

Start: 2016-05-04. End: 2026-06-02.

What was the competitive process for selecting Bollinger Shipyards for Phase II of the FRC program, given the initial mention of 'Full and Open Competition'?

While the overall FRC program may have started with full and open competition, the specific details for Phase II are unclear. It's possible Bollinger Shipyards was the incumbent and won through a follow-on contract, or a limited competition was held. Clarification is needed to understand if the initial competition extended to this phase or if a new, limited competition occurred, impacting price discovery and overall value.

How significant is the potential risk of cost escalation due to the Economic Price Adjustment (EPA) clause in this contract?

The EPA clause allows for price increases based on economic factors like inflation, labor costs, and material prices. Given the multi-year duration of this contract (ending in 2026), there is a notable risk of cost escalation, especially in volatile economic periods. The magnitude of the risk depends on the specific indices used in the EPA and the prevailing economic conditions throughout the contract's life.

What is the expected impact of completing the FRC fleet on the Coast Guard's operational effectiveness and mission readiness?

Completing the FRC fleet of 58 vessels is expected to significantly enhance the Coast Guard's operational effectiveness. These cutters are crucial for maritime law enforcement, search and rescue, and national security missions. A fully realized fleet improves response times, extends patrol endurance, and modernizes the Coast Guard's capabilities to meet evolving threats and operational demands.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HSCG23-15-R-FRCPII

Offers Received: 1

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

Evaluated Preference: NONE

Contractor Details

Address: 8365 HIGHWAY 308, LOCKPORT, LA, 70374

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,143,837,027

Exercised Options: $2,075,724,899

Current Obligation: $2,075,724,899

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline