Navy awards $70.7M contract for offshore petroleum discharge system maintenance over 5 years

Contract Overview

Contract Amount: $70,697,986 ($70.7M)

Contractor: Tote Services, LLC

Awarding Agency: Department of Defense

Start Date: 2012-07-18

End Date: 2018-05-15

Contract Duration: 2,127 days

Daily Burn Rate: $33.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE AWARD FEE

Sector: Defense

Official Description: OPERATION AND MAINTENANCE OF THE OFFSHORE PETROLEUM DISCHARGE SYSTEM (OPDS)

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32256

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $70.7 million to TOTE SERVICES, LLC for work described as: OPERATION AND MAINTENANCE OF THE OFFSHORE PETROLEUM DISCHARGE SYSTEM (OPDS) Key points: 1. Contract value represents significant investment in critical maritime logistics infrastructure. 2. Fixed Price Award Fee structure incentivizes performance while managing cost. 3. Competition level suggests a healthy market for specialized maritime services. 4. Contract duration indicates a long-term need for system reliability. 5. Geographic focus on Florida highlights regional operational importance. 6. Awarded to a single contractor, TOTE SERVICES, LLC, suggesting specialized capabilities.

Value Assessment

Rating: good

The contract value of approximately $70.7 million over five years for the operation and maintenance of the Offshore Petroleum Discharge System (OPDS) appears reasonable given the specialized nature of the service. Benchmarking against similar complex maritime logistics contracts is challenging due to the unique requirements of OPDS. However, the fixed-price award fee structure suggests an effort to control costs while ensuring performance standards are met. The total value, averaging around $14 million annually, reflects the significant operational and maintenance demands of such a critical system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bids suggests a competitive environment for this specialized service. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. However, the specialized nature of OPDS maintenance may limit the pool of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages competitive pricing and ensures the government receives the best value through a wider selection of qualified providers.

Public Impact

Ensures the continuous operation and readiness of the Offshore Petroleum Discharge System, a critical component for fuel logistics. Supports U.S. Navy's operational capabilities by guaranteeing reliable fuel supply chains. Benefits the defense sector by maintaining essential infrastructure for military operations. Impacts the maritime services industry by providing significant contract opportunities. Geographically focused on Florida, supporting regional defense infrastructure and potentially local economies through associated services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if award fee criteria are not strictly managed.
Dependence on a single contractor for a critical system could pose a risk if performance degrades.
Limited competition, despite being full and open, might indicate a niche market with fewer viable alternatives.

Positive Signals

Fixed Price Award Fee structure incentivizes contractor performance and cost control.
Awarded under full and open competition, suggesting a fair market process.
Long contract duration implies a stable and reliable service provider is expected.
Contractor has a track record of performing similar services, indicated by the award.

Sector Analysis

The contract falls within the Defense sector, specifically related to maritime logistics and transportation. The market for specialized offshore petroleum discharge system operation and maintenance is niche, likely dominated by a few experienced maritime service providers. The total federal spending on similar deep-sea freight transportation services (NAICS 483111) can be substantial, but contracts for unique systems like OPDS are less common and highly specialized. This contract represents a significant portion of spending for this specific capability.

Small Business Impact

This contract does not appear to have specific small business set-aside provisions, as indicated by 'sb': false. The prime contractor, TOTE SERVICES, LLC, is likely a large business. There is no explicit information on subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem would depend on whether TOTE SERVICES, LLC engages small businesses for support services, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Performance monitoring would be tied to the award fee criteria outlined in the contract. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, ensuring accountability.

Related Government Programs

Navy Fleet Logistics Support
Maritime Fuel Transportation Services
Offshore Infrastructure Maintenance
Defense Logistics Agency Contracts
Deep Sea Freight Transportation Services

Risk Flags

Contract Duration
Specialized System Maintenance
Single Contractor Award
Performance-Based Incentives

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.7 million to TOTE SERVICES, LLC. OPERATION AND MAINTENANCE OF THE OFFSHORE PETROLEUM DISCHARGE SYSTEM (OPDS)

Who is the contractor on this award?

The obligated recipient is TOTE SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $70.7 million.

What is the period of performance?

Start: 2012-07-18. End: 2018-05-15.

What is the historical spending pattern for the operation and maintenance of the Offshore Petroleum Discharge System (OPDS)?

The provided data indicates a single definitive contract awarded on July 18, 2012, and ending on May 15, 2018, with a total value of $70,697,986.29. This suggests that this contract represents the primary, if not sole, federal expenditure for the OPDS operation and maintenance during this period. The duration of over five years and the substantial value point to a consistent and significant requirement for these specialized services. Without prior contract data for OPDS, it's difficult to establish a long-term trend, but this award signifies a sustained investment in maintaining this critical asset.

How does the awarded price compare to similar maritime logistics contracts?

Direct comparison of the awarded price for OPDS maintenance to 'similar' contracts is challenging due to the highly specialized nature of the Offshore Petroleum Discharge System. OPDS is a unique capability, and contracts for its operation and maintenance are not commonplace. However, the average annual cost of approximately $14 million ($70.7M / 5 years) for maintaining such a critical and complex system can be considered within a reasonable range for specialized defense logistics. Broader maritime logistics contracts, such as those for general fleet support or bulk fuel transport, might have different cost structures and economies of scale, making direct price-per-unit comparisons difficult and potentially misleading.

What are the key performance indicators (KPIs) or award fee criteria for this contract?

The provided data specifies a 'Fixed Price Award Fee' (PT) contract type, indicating that performance-based incentives are a core component. While the specific KPIs or award fee criteria are not detailed in the summary data, they would typically revolve around operational readiness, system uptime, response times for maintenance and repairs, safety compliance, and adherence to environmental regulations. The 'Award Fee' portion allows the government to reward the contractor for performance exceeding baseline requirements, incentivizing high levels of service delivery and reliability for the critical OPDS.

What is TOTE SERVICES, LLC's track record with similar government contracts?

TOTE SERVICES, LLC has a significant track record in government contracting, particularly within the maritime sector. They are known for operating and maintaining various government vessels and performing complex logistical support services. While the specific details of their past performance on OPDS are not provided here, their selection for this definitive contract suggests they possess the requisite experience, technical capabilities, and past performance history deemed satisfactory by the Department of the Navy for operating and maintaining such a critical and specialized system.

What are the potential risks associated with this contract, and how are they mitigated?

Potential risks include contractor performance degradation over the contract's duration, unforeseen technical issues with the OPDS, or cost overruns if award fee criteria are not strictly managed. Mitigation strategies likely involve robust government oversight, regular performance reviews tied to the award fee structure, and clear contract clauses addressing maintenance standards and response times. The fixed-price nature of the base contract helps cap overall expenditure, while the award fee incentivizes the contractor to proactively manage risks and maintain high performance levels to maximize their earnings.

How does this contract contribute to the Navy's overall mission readiness?

This contract is crucial for the Navy's mission readiness by ensuring the operational availability of the Offshore Petroleum Discharge System (OPDS). The OPDS is a vital asset for projecting power and sustaining operations in areas where traditional port infrastructure may be limited or non-existent, enabling the transfer of fuel from tankers to shore or other vessels. Reliable maintenance and operation, as ensured by this contract, guarantee that this critical logistical capability is available when needed, directly supporting fleet deployment, operational endurance, and logistical flexibility in diverse operational environments.

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

Solicitation ID: N0003312R3131

Offers Received: 2

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Parent Company: Saltchuk Resources, Inc. (UEI: 075108902)

Address: 10550 DEERWOOD PARK BLVD STE 602, JACKSONVILLE, FL, 32256

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

Financial Breakdown

Contract Ceiling: $70,702,370

Exercised Options: $70,697,986

Current Obligation: $70,697,986

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline