How is the U.S. Coast Guard Spending Its CARES Act Funds So Far?

Key Takeaways

• The CARES Act provided the U.S. Coast Guard with $140.8 million for COVID-19 response activities – specifically to mobilize reservists and to increase the capability and capacity of their IT systems and infrastructure.
• To date, the USCG has obligated $14.2 million in COVID-19-related contracts, barely 10% of the total CARES Act allocation.
• Information Technology commodity spending accounts for $12.3 million of the $14.2 million spent to date and more than 85% of that went to a single vendor.

CARES Act Funds for the U.S. Coast Guard

Last month Congress passed the CARES Act to provide funding for federal and state COVID-19 response efforts and aid to vulnerable populations. The legislation provided $140.8 million for the U.S. Coast Guard (USCG) for Operations and Support “to prevent, prepare for, and respond to coronavirus, domestically or internationally, which shall be for mobilization of reservists and increasing the capability and capacity of Coast Guard information technology systems and infrastructure.”

The first observation is that the $140.8M will be split across personnel mobilization costs and IT. Mobilization costs would seem to be the more expensive portion of this, but that is an assumption on my part.

Coast Guard COVID-19 Contract Spending

As you may already know, contracted coronavirus response activities using the CARES Act and other stimulus funds are required to be flagged under the COVID-19 National Interest Action (NIA) in the Federal Procurement Data System. Looking at what the CG has reported for their contract obligations to date gives an indication of what kinds of contracts they have awarded, for what and with which companies.  To date, the USCG has obligated $14.2 million over the last few months. Note that we are only one month into Q3 and the spending has picked up considerably as CARES Act funding begins to flow (See chart below.)

As far as Preference Programs go, the Coast Guard has awarded the vast majority of these contract dollars to date without using set-aside programs. Of the total $14.2 million in contracts awarded to so far only $1.7 million has (roughly 12%) has gone to companies using some form of set-aside program. (See chart below.)

For the Primary Requirement – the main type(s) of products and/or services being procured – the spending data shows that the Coast Guard appears to be focusing nearly all of their COVID-19 spending to date on Information Technology, which makes sense given the call-out in the CARES Act funding as well as the trend we are seeing across federal agencies in increasing their ability to telework. (See chart below.)

Similar to the clear concentration of what kinds of things that have been procured to date, the number of awardees is narrowly concentrated among a handful of companies. In fact, four firms account for nearly 93% of USCG COVID-19 contract spending through the end of April 2020. (See chart below.)

The NANA Regional Corporation contract was awarded under the Information Technology Enterprise Solutions 3 Hardware (ITES3H) vehicle and the Thundercat Technology award came under the FirstSource II vehicle – indication both were predominantly for commodity IT hardware purchases, likely for equipment to increase teleworking and remote connectivity capabilities and supporting infrastructure.

We will keep watching COVID-19 contract data as it comes in to see what trends develop over the course of the federal government’s pandemic response efforts.