DoD's $35.4M contract for offshore vessels awarded to Offshore Service Vessels, L.L.C. with 4 bids

Contract Overview

Contract Amount: $35,428,065 ($35.4M)

Contractor: Offshore Service Vessels, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2014-12-01

End Date: 2019-02-06

Contract Duration: 1,528 days

Daily Burn Rate: $23.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AWARD AND FUNDING FOR FIRM PERIOD

Place of Performance

Location: GALLIANO, LAFOURCHE County, LOUISIANA, 70354

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $35.4 million to OFFSHORE SERVICE VESSELS, L.L.C. for work described as: AWARD AND FUNDING FOR FIRM PERIOD Key points: 1. The contract value of $35.4 million over approximately 5 years represents a significant investment in specialized maritime logistics. 2. Competition was robust with 4 bids received, suggesting a healthy market for these services. 3. The firm-fixed-price structure aims to control costs and provide predictability for the Department of Defense. 4. The contract duration of 1528 days indicates a long-term need for these services. 5. The award to Offshore Service Vessels, L.L.C. highlights a key player in the deep-sea freight transportation sector for defense needs. 6. The absence of small business set-aside suggests the primary contractors are likely larger entities.

Value Assessment

Rating: good

The total award amount of $35.4 million for approximately 5 years of service appears reasonable given the specialized nature of deep-sea freight transportation for defense purposes. Benchmarking against similar contracts for offshore service vessels is challenging without more specific service details, but the firm-fixed-price contract type suggests an effort to manage costs effectively. The number of bids received (4) indicates a competitive environment that likely contributed to a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four bids received. This level of competition is generally positive, as it allows multiple qualified vendors to propose solutions and encourages competitive pricing. The presence of four bidders suggests that the market for deep-sea freight transportation services is sufficiently robust to support multiple providers, which can lead to better value for the government.

Taxpayer Impact: A competitive bidding process for this contract helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The Department of the Navy benefits from reliable and specialized transportation services for its operational needs. This contract supports the delivery of critical goods and equipment via deep-sea freight, enabling military readiness. The services are likely utilized across various naval operations, potentially impacting global deployment capabilities. The contract supports jobs within the maritime transportation industry, particularly in Louisiana where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen operational challenges arise, despite the firm-fixed-price structure.
Dependence on a single contractor for a critical service could pose a risk if performance issues emerge.
Geopolitical factors or changes in international maritime regulations could impact service delivery and costs.

Positive Signals

The firm-fixed-price contract provides cost certainty for the duration of the award.
Full and open competition suggests a healthy market and potential for competitive pricing.
The contractor's base in Louisiana may indicate a focus on domestic maritime support capabilities.

Sector Analysis

The maritime transportation sector is crucial for global commerce and national defense. This contract falls within the deep-sea freight transportation sub-sector, which involves specialized vessels and logistics for moving goods across oceans. The Department of Defense is a significant consumer of such services, relying on them for supply chain resilience and operational support. Comparable spending in this area can vary widely based on the specific needs, vessel types, and operational theaters, but contracts of this magnitude are typical for sustained, specialized maritime support.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false, indicating that the primary award was not specifically targeted towards small business participation. This suggests that the nature of the services required, or the scale of the contract, may have favored larger, established maritime service providers. Subcontracting opportunities for small businesses may exist but are not explicitly mandated by the contract's set-aside status.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract, which penalizes deviations from agreed-upon terms and pricing. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Sealift Command Contracts
Defense Logistics Agency Transportation Services
Maritime Administration (MARAD) Support Contracts
US Navy Vessel Charter Agreements

Risk Flags

Contract Duration
Contract Value
Competition Level
Contract Type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.4 million to OFFSHORE SERVICE VESSELS, L.L.C.. AWARD AND FUNDING FOR 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 $35.4 million.

What is the period of performance?

Start: 2014-12-01. End: 2019-02-06.

What is the track record of Offshore Service Vessels, L.L.C. with the Department of Defense?

Information on Offshore Service Vessels, L.L.C.'s specific track record with the Department of Defense prior to this award is not detailed in the provided data. However, the award of a definitive contract valued at over $35 million suggests a level of capability and reliability deemed sufficient by the Navy. Further investigation into past performance reviews, other awarded contracts, and any reported issues would be necessary for a comprehensive assessment of their track record. The duration and value of this contract imply a significant engagement, indicating the Navy had confidence in the contractor's ability to meet its requirements over an extended period.

How does the value of this contract compare to similar deep-sea freight transportation contracts for the Navy?

Direct comparison of this $35.4 million contract to similar deep-sea freight transportation contracts for the Navy is difficult without more granular data on the specific services rendered, vessel types, operational areas, and contract durations. However, for specialized maritime logistics supporting defense operations, contracts in the tens of millions of dollars over several years are not uncommon. The firm-fixed-price nature and the competitive bidding process (4 bidders) suggest that the Navy sought to achieve value for money. Without access to a broader database of comparable contracts, it's challenging to definitively state if this represents a high, low, or average value.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks associated with this contract include potential performance failures by the contractor, such as vessel downtime, inability to meet delivery schedules, or inadequate maintenance, which could disrupt naval operations. Given the firm-fixed-price structure, cost overruns are less likely for the government unless significant scope changes occur, but the contractor might face financial strain if operational costs exceed projections. Geopolitical instability, changes in international maritime law, or fuel price volatility could also impact the contractor's ability to perform and potentially lead to claims or contract disputes. Furthermore, reliance on a single entity for critical transportation services poses a risk if the contractor experiences financial difficulties or ceases operations.

How effective is the firm-fixed-price contract type in ensuring program effectiveness for deep-sea freight?

The firm-fixed-price (FFP) contract type is generally effective in ensuring program effectiveness for services with well-defined requirements, such as deep-sea freight transportation, by providing cost certainty to the government. It incentivizes the contractor to manage costs efficiently and deliver services within the agreed-upon price, thereby promoting predictable outcomes. For the Navy, this means a clearer budget and reduced risk of unexpected cost increases. However, the effectiveness of FFP can be diminished if the scope of work is not precisely defined, potentially leading to disputes or change orders. In this case, the long duration suggests that the Navy had a clear understanding of its needs, making FFP a suitable choice for controlling expenditures and ensuring the delivery of essential transportation services.

What are the historical spending patterns for deep-sea freight transportation by the Department of the Navy?

Historical spending patterns for deep-sea freight transportation by the Department of the Navy are extensive, reflecting its global operational footprint and logistical requirements. The Navy, primarily through entities like the Military Sealift Command (MSC), regularly procures a wide range of maritime services, including vessel charters, cargo transport, and specialized offshore support. Spending in this category can fluctuate significantly year-to-year based on geopolitical events, deployment tempos, and specific operational needs. While this $35.4 million contract represents a substantial single award, the Navy's overall annual expenditure on maritime transportation services likely runs into the hundreds of millions or even billions of dollars, encompassing various contract types and durations.

What is the significance of the North American Industry Classification System (NAICS) code 483111 for this contract?

The North American Industry Classification System (NAICS) code 483111, 'Deep Sea Freight Transportation,' is highly significant as it precisely categorizes the core service being procured under this contract. This code indicates that the contract is for the operation of vessels for the transportation of freight on the deep seas. This specificity allows for accurate tracking of government spending within this particular industry segment, facilitates benchmarking against similar contracts, and helps in understanding the market dynamics and contractor landscape relevant to this specialized service. For the Department of the Navy, it ensures that procurement efforts are aligned with the specific capabilities required for long-haul maritime freight.

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: N0003314R2003

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 16201 E MAIN ST, GALLIANO, LA, 70354

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,428,065

Exercised Options: $35,428,065

Current Obligation: $35,428,065

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline