Navy awards $58M charter hire contract for offshore service vessels, highlighting deep sea freight needs

Contract Overview

Contract Amount: $58,145,760 ($58.1M)

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

Awarding Agency: Department of Defense

Start Date: 2018-11-21

End Date: 2024-09-30

Contract Duration: 2,140 days

Daily Burn Rate: $27.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: N103B - C. MECONNAHEY - SSVWC CHARTER HIRE BASE PERIOD

Place of Performance

Location: JBPHH, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $58.1 million to OFFSHORE SERVICE VESSELS, L.L.C. for work described as: N103B - C. MECONNAHEY - SSVWC CHARTER HIRE BASE PERIOD Key points: 1. Contract awarded through full and open competition, suggesting a robust bidding process. 2. The firm fixed-price structure aims to control costs and provide predictability. 3. Duration of over 2100 days indicates a long-term operational requirement. 4. The contract supports deep sea freight transportation, a critical logistical function. 5. Awarded by the Department of the Navy, indicating a significant defense-related need. 6. The contractor, Offshore Service Vessels, L.L.C., will provide specialized vessel services.

Value Assessment

Rating: good

The contract value of $58.15 million over approximately 5.9 years suggests a substantial investment in offshore service vessels. Benchmarking this against similar long-term charter agreements for specialized maritime assets is crucial. The firm fixed-price nature of the contract implies that the government has negotiated a set price, which can be advantageous if costs are well-understood. However, without specific details on the vessel capabilities and service levels, a precise value-for-money assessment is challenging. The number of bids received (6) provides some indication of market interest and potential for competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Six bids were received, suggesting a healthy level of competition for this requirement. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie to win the award. The presence of multiple bidders implies that the market has sufficient capacity and interest to support the Navy's needs.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies competed to offer the best value. This process helps prevent inflated pricing that might occur in less competitive scenarios.

Public Impact

The primary beneficiaries are the Department of the Navy, ensuring operational readiness and logistical support for its missions. Services delivered include the charter hire of offshore service vessels, essential for deep sea operations. The geographic impact is likely focused on areas where the Navy operates its deep sea assets, potentially global. Workforce implications include employment for vessel crews, maritime support staff, and related industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if operational demands exceed initial projections under a fixed-price contract.
Dependence on a single contractor for a critical long-term service could pose supply chain risks.
Geopolitical factors or environmental conditions could impact vessel availability and operational costs.
Ensuring consistent maintenance and operational standards across the contracted vessels is key.

Positive Signals

Firm fixed-price contract provides cost certainty for the duration of the award.
Full and open competition suggests a competitive market and potentially good value.
Long contract duration allows for stable planning and operational integration.
The contractor has secured a significant award, indicating a level of established capability.

Sector Analysis

The contract falls within the maritime transportation and logistics sector, specifically supporting deep sea freight. This sector is vital for global trade and military logistics. The market for specialized offshore service vessels is often characterized by high capital costs, specialized expertise, and significant regulatory oversight. Comparable spending benchmarks would involve analyzing other long-term charter agreements for similar vessels by government agencies or large commercial entities, considering vessel size, capacity, and operational scope.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The primary contractor, Offshore Service Vessels, L.L.C., is likely a larger entity. There is no explicit information regarding subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for support services, maintenance, or supplies, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Navy, ensuring compliance with contract terms and performance standards. Accountability measures are embedded in the firm fixed-price structure, requiring the contractor to deliver services as specified. Transparency is facilitated through contract award databases, though detailed operational performance data may be less public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Sealift Command Chartering
Naval Fleet Support Services
Deep Sea Transportation Contracts
Offshore Support Vessel Charters
Maritime Logistics and Freight

Risk Flags

Long-term contract duration may expose government to unfavorable market shifts.
Lack of specific vessel details limits detailed value assessment.
Potential for contractor performance issues over extended period.
Dependence on specialized maritime services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.1 million to OFFSHORE SERVICE VESSELS, L.L.C.. N103B - C. MECONNAHEY - SSVWC CHARTER HIRE BASE 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 $58.1 million.

What is the period of performance?

Start: 2018-11-21. End: 2024-09-30.

What is the specific type and capability of the 'SSVWC CHARTER HIRE' vessels being contracted?

The data provided does not specify the exact type or capabilities of the 'SSVWC CHARTER HIRE' vessels. 'SSVWC' likely refers to a specific class or designation within the Navy's fleet or operational requirements. These vessels are generally used for supporting offshore operations, which could include personnel transport, equipment transfer, or specialized mission support in deep sea environments. Understanding their specific tonnage, propulsion, endurance, and specialized equipment (e.g., cranes, dynamic positioning systems) is crucial for a complete assessment of their role and value. Without this detail, comparisons to other contracts are limited to general maritime support.

How does the $58.15 million contract value compare to historical spending on similar offshore service vessel charters by the Navy?

To compare the $58.15 million contract value, one would need to analyze historical data for similar long-term charter agreements for offshore service vessels by the Department of the Navy. This would involve identifying contracts with comparable durations (over 2100 days), vessel types, and service scopes. For instance, if the Navy has previously awarded contracts for similar vessels at rates significantly lower or higher than implied by this award, it would provide context. The firm fixed-price nature also needs consideration; if past contracts were cost-plus, direct value comparison is less meaningful. A preliminary assessment suggests this is a substantial, long-term commitment, typical for strategic operational support.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a firm fixed-price charter hire of offshore service vessels, typical KPIs would likely include vessel availability (uptime percentage), on-time performance for scheduled operations, adherence to safety and environmental regulations, and potentially response times for deployment or specific mission tasks. SLAs would define the expected standards for these metrics, and failure to meet them could result in penalties or contract remedies, depending on the contract's specific clauses. The Navy would monitor these to ensure operational readiness and mission success.

What is the track record of Offshore Service Vessels, L.L.C. in fulfilling similar government contracts?

Assessing the track record of Offshore Service Vessels, L.L.C. requires examining their past performance on government contracts, particularly those involving vessel chartering and maritime support. Information on contract history, including awards, performance evaluations (e.g., CPARS - Contractor Performance Assessment Reporting System), and any past disputes or terminations, would be necessary. A positive performance history with the Department of Defense or other federal agencies would indicate reliability and capability. Conversely, a history of performance issues could raise concerns about the successful execution of this current $58.15 million award.

What is the potential risk associated with the long duration (over 2100 days) of this contract?

The long duration of over 2100 days (approximately 5.9 years) for this contract presents several potential risks. Firstly, market conditions for vessel charter rates and operational costs can fluctuate significantly over such a period, potentially making the fixed price less advantageous for the contractor if costs rise unexpectedly, or less optimal for the government if market rates fall. Secondly, technological advancements in vessel design or operational capabilities could emerge, rendering the contracted vessels less efficient or suitable over time. Thirdly, long-term reliance on a single contractor can reduce flexibility and increase the impact of any performance failures or financial instability on the part of the contractor. Finally, geopolitical events or changes in operational requirements could necessitate modifications or early termination, leading to complex negotiations.

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: N3220517R3514

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 16201 E MAIN ST, CUT OFF, LA, 70345

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

Financial Breakdown

Contract Ceiling: $58,145,760

Exercised Options: $58,145,760

Current Obligation: $58,145,760

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline