DoD's $180M Deep Sea Freight Contract Awarded to Offshore Service Vessels, L.L.C. for 7+ Years
Contract Overview
Contract Amount: $179,841,968 ($179.8M)
Contractor: Offshore Service Vessels, L.L.C.
Awarding Agency: Department of Defense
Start Date: 2005-01-24
End Date: 2012-09-18
Contract Duration: 2,794 days
Daily Burn Rate: $64.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Transportation
Official Description: PRIMARY SYSTEM (FIRM PERIOD)
Place of Performance
Location: NORFOLK, NORFOLK (CITY) County, VIRGINIA, 23501
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $179.8 million to OFFSHORE SERVICE VESSELS, L.L.C. for work described as: PRIMARY SYSTEM (FIRM PERIOD) Key points: 1. The contract value of $179.8M over nearly 8 years indicates significant long-term reliance on these services. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The duration and value present a moderate risk for price escalation and vendor lock-in. 4. This spending falls under the Transportation sector, specifically freight and logistics.
Value Assessment
Rating: fair
The contract value of $179.8M over 2794 days suggests an average annual spend of approximately $64.4K per day. Benchmarking against similar deep-sea freight contracts is difficult without more specific service details, but the overall value appears substantial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and can lead to better price discovery. However, the long duration might have limited the number of active participants towards the end.
Taxpayer Impact: Taxpayer funds were utilized through a competitive process, aiming for the best value. The long-term nature of the contract means sustained expenditure, the efficiency of which depends on ongoing market conditions and performance.
Public Impact
Ensures critical logistical support for naval operations, enabling the movement of goods and equipment. Supports the maritime industry and associated jobs, though the specific impact on small businesses is unclear. The long-term commitment could impact the government's flexibility to adopt newer, potentially more efficient transportation technologies.
Waste & Efficiency Indicators
Waste Risk Score: 64 / 10
Warning Flags
- Long contract duration may lead to price creep.
- Lack of specific performance metrics makes value assessment difficult.
- Potential for vendor lock-in over an extended period.
Positive Signals
- Awarded through full and open competition.
- Significant duration suggests a stable and reliable service provider.
- Supports essential Department of Defense operations.
Sector Analysis
This contract falls within the Transportation sector, specifically focusing on deep-sea freight. Spending benchmarks for such specialized services are highly variable, but the $180M figure over nearly 8 years suggests a significant investment in maintaining robust supply chains for naval operations.
Small Business Impact
The data indicates the contract was not set aside for small businesses (sb: false). While the prime contractor is listed, there is no information on subcontracting opportunities for small businesses within this large transportation contract.
Oversight & Accountability
The contract was awarded by the Department of the Navy, a component of the Department of Defense. Oversight would typically involve contract management offices within the Navy to ensure performance and adherence to terms, but specific oversight mechanisms are not detailed here.
Related Government Programs
- Deep Sea Freight Transportation
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Long contract duration (2794 days).
- Firm Fixed Price contract type.
- No specific small business set-aside.
- Lack of detailed performance metrics in provided data.
- Potential for price volatility in the transportation sector.
Tags
deep-sea-freight-transportation, department-of-defense, va, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $179.8 million to OFFSHORE SERVICE VESSELS, L.L.C.. PRIMARY SYSTEM (FIRM PERIOD)
Who is the contractor on this award?
The obligated recipient is OFFSHORE SERVICE VESSELS, L.L.C..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $179.8 million.
What is the period of performance?
Start: 2005-01-24. End: 2012-09-18.
What was the average daily cost of the service, and how does it compare to industry benchmarks for similar deep-sea freight operations?
The total contract value was $179,841,967.51 over 2794 days, resulting in an average daily cost of approximately $64,367. Benchmarking this figure against industry standards for deep-sea freight transportation is challenging without detailed specifications of the services rendered, such as vessel type, capacity, routes, and frequency. However, this daily rate represents a substantial operational expense.
What are the primary risks associated with a long-term (nearly 8-year) firm-fixed-price contract for deep-sea freight transportation?
A primary risk is price escalation due to unforeseen market changes (e.g., fuel costs, labor rates) that are not adequately captured in the fixed price, potentially leading to reduced profit margins for the contractor or disputes. Another risk is vendor lock-in, where the government may be less agile in adopting new technologies or switching providers if better options emerge. Performance degradation over time is also a concern.
How effectively did the 'full and open competition' process ensure value for taxpayer money over the contract's lifespan?
Full and open competition theoretically maximizes value by allowing numerous bidders to compete, driving down prices. However, the effectiveness over a long duration depends on the initial bid quality, the stability of the market, and the government's contract management. Without performance data or post-award reviews, it's difficult to definitively assess the long-term value realization beyond the initial competitive award.
Industry Classification
NAICS: Transportation and Warehousing › Deep Sea, Coastal, and Great Lakes Water Transportation › Deep Sea Freight Transportation
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 16201 E MAIN ST, GALLIANO, LA, 01
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $295,666,758
Exercised Options: $179,841,968
Current Obligation: $179,841,968
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2005-01-24
Current End Date: 2012-09-18
Potential End Date: 2012-09-18 00:00:00
Last Modified: 2014-11-26
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