JA-912-FRCincrease 250710v5.pdfHCAsigned revised.pdfCPOsigned 250807 redacted_Redacted.pdf

Note: The Coast Guard plans to use the pre-established (evaluated at award of the Phase II contract awarded 04 May 2016) existing pricing in option period Seven (current option period) of the Phase II contract, as the pricing and contractual means to satisfy this requirement.

(e) Type of funding: Procurement, Construction, and Improvements (PC&I).

(f) Year of funding: Fiscal Year (FY) 2025.

(g) Solicitation number: HSCG2316CAFR625 / MOD8FRCS

(h) Background information about the requirement: On 26 September 2008, the USCG competitively awarded, with future Options, the Phase I contract HSCG23-08-C-2FR125 for the design and construction of thirty-two (32) FRCs. On May 4, 2016, USCG competitively awarded contract HSCG23-16-C-AFR625, for Phase II of this program, for construction of twenty-six (26) additional FRCs for a then total Program of Record (PoR) of fifty-eight (58) FRCs. The Program has since per Commandant request and CPO approval, increased the contract ceiling to a total of seventy-one (71) FRCs. As of June 2025, sixty (60), of the sixty-seven (67) awarded FRCs have been delivered and are in service around the world. In January 2025, the Commandant of the Coast Guard submitted the United States Coast Guard Fast Response Cutter Program re-baseline and requested additional FRCs that would increase the PoR up to seventy-nine (79) FRCs, as a part of the potential funding increase in the budget reconciliation process for FY25. The Coast Guard has a demonstrated emerging need for additional FRCs to support emerging operations, specifically in the Western Pacific and U.S. border protection initiatives.

4. Description of Supplies/Services.

Pursuant to the details in paragraph 2(h) above, the USCG intends to increase the overall FRC Phase I and Phase II contract ceiling combined from seventy-one (71) FRCs up to seventy-nine (79) FRCs. The requirement supports the President’s National Drug Control Strategy goals and Ports, Waterways, and Coastal and Global Maritime Security missions.

By leveraging the existing contractual vehicle, the new ships will be Firm-Fixed Price subject to the contract’s Economic Price Adjustment clause. The USCG plans to use the pre-established (evaluated at award of the Phase II contract) pricing in current option period seven of the Phase II contract.

5. Identification of Statutory Authority Permitting Other Than Full and Open Competition.

10 U.S.C. § 3204(a)(1), as implemented by FAR 6.302-1 (“Only one responsible source and no other supplies or services will satisfy agency requirements”). Specifically, it states that “supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in a substantial duplication of cost to the Government that is not expected to be recovered through competition. Re: FAR 6.302-1(a)(2)(ii).

6. Identification of Exception to the Buy American Act.

N/A.

7. Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the Acquisition Require Use of the Authority Cited.

As the designer, developer, and producer of the FRC, Bollinger is the only contractor with the requisite knowledge, experience, capability, and licensing rights needed to meet the Government’s requirements, without incurring a substantial duplication of cost.

The USCG considered various factors in the decision to proceed without full and open competition: 1) The Government does not possess or otherwise hold title to, the licensing and exclusive data rights needed to duplicate, and re-compete the current FRC design; 2) Any vendor other than the incumbent would have a ramp-up time of approximately three (03) years, even if provided with the FRC design, due to the significant production learning curve already attained by the incumbent contractor; 3) The increased labor costs due to either an extensive break in production if Bollinger was selected, or due to start-up of a new production line at a second source; 4) Increased costs associated with escalation of labor and material costs due to the delay in construction; 5) The administrative time and cost to procure and/or develop the special tooling required to construct the FRC; and 6) The highly unlikely decision that another shipyard would choose to compete, given the relatively small number of hulls over which to allocate its initial, non-recurring start-up costs and the higher costs/risks associated with the lack of established learning curve.

The current FRC contract is structured with seven (07) option periods that were previously competitively awarded and determined to be fair and reasonable. The use of the existing contract remains a feasible, relatively low cost, and timely solution to meet the Government’s needs. This remains particularly applicable if the USCG exercises its option with sufficient time to allow the contractor to revise the delivery schedule. This, in turn, enables the contractor to level load the yard for maximum efficiency, reducing costs to the Government.

Assuming the specification could be changed and the requirement recompeted, the Government estimates cost duplication as The Government derived these calculations using detailed historical labor hours, labor costs and material costs corresponding with the first two (02) FRCs produced under the FRC Phase I contract.

8. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential

Sources as is Practicable.

As required by FAR 5.201, the Government synopsized the proposed requirements and procurement intent in the System for Award Management (SAM) on 21 April 2025. The results are described in paragraph 11 below.

9. Determination by the Contracting Officer that the Anticipated Cost to the

Government will be Fair and Reasonable.

The Contracting Officer has determined that the anticipated price to the Government for the supplies/services covered by this J&A is fair and reasonable based upon the following information.

The USCG competitively awarded the existing FRC Phase II contract in May 2016. To determine if the 2016 pricing is fair and reasonable, the 2016 Firm-Fixed pricing components were escalated to planned Period of Performance for the eight (08) additional FRCs. Through market comparisons for a similar vessel type, it was determined that the price of eight (08) FRCs, similar to that being produced under the current contract, would result in a significantly higher cost exceeding

10. Description of Market Research.

In anticipation of this possible increase in the PoR, the Government undertook additional market research in March of 2025 to determine the ability of a U.S. shipbuilder (other than the incumbent – Bollinger Shipyards, LLC) to construct the additional required FRCs or equivalent.

The research indicated that no other shipbuilders possess the ability to construct an FRC or equivalent, without substantial duplication of cost (as noted above) and unacceptable delays in delivery. While other vendors could potentially provide a vessel somewhat similar to that of the FRC, the cost of doing so would be prohibitive and incompatible with the already challenging fiscal climate. Bollinger is the only vendor that has an existing production facility for the FRC and possesses the exclusive licensing agreements needed to produce the FRCs at a fair and reasonable price and without an unacceptable gap to the current FRC production schedule.

11. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

In a recompete, the Government must also factor in the costs associated with the Project Resident Office (PRO) site and internal support. Bollinger currently provides PRO facilities, furniture, and building supplies. In a recompete, the time to prepare a facility for the PRO and set up a working shipyard would be detrimental to the FRC Program from both cost and logistical impact perspectives. Indeed, the Government estimates personnel and facilities cost duplication of creating a second PRO throughout the Period would exceed .

12. A Listing of the Sources, if Any, that Expressed, in Writing, an Interest in the

Acquisition.

The Government posted a synopsis on SAM.GOV on 21 April 2025 requesting that parties express their interest in writing to the Contracting Officer. To date, the Government has received no responses.

13. A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome

Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required.

This intended action is a follow-on modification for the continued production of a major system.

The Government achieved ample competition in both the Phase I and Phase II contract awards.

The FRC team continuously conducts market research surveys to ensure that the Coast Guard