DoD's $241M contract for vessel operations shows strong competition but raises questions on value for money

Contract Overview

Contract Amount: $240,929,887 ($240.9M)

Contractor: Crowley Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-09-15

End Date: 2022-09-30

Contract Duration: 2,572 days

Daily Burn Rate: $93.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: IGF::CT::IGF OPERATION AND MAINTENANCE OF FIVE GOVERNMENT-OWNED ROLL-ON/ROLL-OFF AND CONTAINER VESSELS (ROCONS)

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32226

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $240.9 million to CROWLEY GOVERNMENT SERVICES, INC. for work described as: IGF::CT::IGF OPERATION AND MAINTENANCE OF FIVE GOVERNMENT-OWNED ROLL-ON/ROLL-OFF AND CONTAINER VESSELS (ROCONS) Key points: 1. The contract utilized full and open competition, indicating a healthy market for these specialized services. 2. A high number of bids suggests robust interest and potentially competitive pricing, though final value needs scrutiny. 3. The duration of the contract (over 7 years) implies a long-term need for these critical maritime assets. 4. Fixed-price contract type generally shifts risk to the contractor, but performance monitoring is key. 5. The specific nature of the vessels (ROCONs) points to a niche requirement within the defense logistics sector. 6. Geographic location in Florida suggests a strategic operational base for these assets.

Value Assessment

Rating: fair

Benchmarking the value for money on this contract is challenging without specific performance metrics and detailed cost breakdowns. While the fixed-price nature is positive, the total award amount over its extended period warrants closer examination. Comparing this to similar long-term vessel operation contracts within the DoD or other agencies would be necessary to determine if the pricing is competitive. The absence of readily available performance data makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with five bidders submitting proposals. This level of competition is generally positive, suggesting that the government sought the widest possible pool of qualified contractors. A higher number of bidders typically leads to better price discovery and can result in more favorable terms for the government. The fact that five entities vied for this contract indicates a competitive market for operating and maintaining these specialized vessels.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive offers for essential maritime services.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, ensuring the availability of critical sealift and logistics capabilities. The services delivered include the operation and maintenance of five government-owned Roll-on/Roll-off and Container vessels (ROCONs). The contract has a geographic impact centered in Florida, likely serving as a key operational or homeporting location. Workforce implications include employment opportunities for maritime professionals, engineers, and support staff in the Florida region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if maintenance needs are underestimated or unforeseen issues arise with aging vessels.
Dependence on a single contractor for over seven years could reduce future competitive pressure if market dynamics shift.
Ensuring consistent operational readiness and performance across all five vessels throughout the contract term requires diligent oversight.

Positive Signals

Full and open competition suggests a healthy market and potential for competitive pricing.
Fixed-price contract type shifts performance risk to the contractor.
Long-term contract provides stability and predictability for critical logistics capabilities.
Award to a single, established contractor (Crowley Government Services) may indicate proven capability and reliability.

Sector Analysis

This contract falls within the Deep Sea Freight Transportation sector, a critical component of the broader logistics and defense industrial base. The market for operating specialized government-owned vessels is relatively niche, often dominated by a few key players with the necessary expertise and certifications. Comparable spending benchmarks would involve looking at other long-term vessel charter, operation, and maintenance contracts awarded by military branches or government agencies requiring similar maritime assets. The size of this contract, over $240 million, places it as a significant award within this specialized sub-sector.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'small business set-aside' flag is false. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary contractor, Crowley Government Services, likely possesses the scale and resources to manage these operations directly or through larger partners. The impact on the small business ecosystem is likely minimal unless specific subcontracting opportunities are pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Military Sealift Command Contracts
Maritime Transportation Services
Logistics and Supply Chain Management
Government Vessel Operations
Defense Transportation Contracts

Risk Flags

Potential for increased maintenance costs due to vessel age.
Risk of performance degradation if oversight is insufficient.
Dependence on specialized contractor capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $240.9 million to CROWLEY GOVERNMENT SERVICES, INC.. IGF::CT::IGF OPERATION AND MAINTENANCE OF FIVE GOVERNMENT-OWNED ROLL-ON/ROLL-OFF AND CONTAINER VESSELS (ROCONS)

Who is the contractor on this award?

The obligated recipient is CROWLEY GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $240.9 million.

What is the period of performance?

Start: 2015-09-15. End: 2022-09-30.

What is the track record of Crowley Government Services in managing similar large-scale maritime contracts for the DoD?

Crowley Government Services, Inc. has a significant history of providing maritime services to the U.S. government, including extensive experience with the Military Sealift Command (MSC). They have operated various types of vessels, including container ships and specialized carriers, often under long-term contracts. Their experience typically encompasses vessel operations, maintenance, crewing, and logistics support. While specific performance details for this particular ROCON contract are not publicly detailed, Crowley's established presence in the government contracting space suggests a baseline level of capability and familiarity with military requirements. However, a deeper dive into past performance reviews, any contract disputes, or awards/penalties associated with their government contracts would provide a more comprehensive assessment of their track record.

How does the per-vessel operational cost compare to industry benchmarks for similar ROCON vessels?

Determining a precise per-vessel operational cost benchmark is complex without detailed cost breakdowns from the contract and specific market data for ROCONs. The total award of approximately $241 million over roughly 7 years (2572 days) averages to about $93,674 per day across all five vessels. This daily rate encompasses crewing, maintenance, fuel (if included), insurance, and overhead. Industry benchmarks for similar commercial vessel operations vary widely based on vessel size, age, operational tempo, and specific services included. For large container or Ro-Ro vessels, daily operating expenses can range from tens of thousands to over a hundred thousand dollars. Without knowing the exact specifications of these government-owned ROCONs and the precise inclusions in the service contract, a direct comparison is difficult. However, the calculated average daily rate falls within a plausible range for specialized government maritime support.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data. However, typical KPIs for vessel operation and maintenance contracts include vessel availability (uptime percentage), operational readiness, response times for maintenance and repairs, fuel efficiency, crew performance and safety records, and adherence to schedules and mission requirements. For ROCONs, KPIs would likely focus on their ability to be rapidly deployed and loaded/unloaded, ensuring they are mission-capable when needed by the Department of the Navy. Effective oversight would involve regular reporting by the contractor against these KPIs and government verification of performance.

What is the historical spending trend for ROCON operations and maintenance by the Department of the Navy?

Analyzing the historical spending trend specifically for ROCON operations and maintenance by the Department of the Navy requires access to historical contract databases and budget information. This single contract award of $241 million over approximately seven years represents a significant, but potentially episodic, investment. Without data on previous contracts for similar vessels or alternative solutions, it's hard to establish a trend. It's possible that the Navy utilizes a mix of government-owned and chartered vessels, and spending may fluctuate based on strategic needs, fleet readiness, and budget allocations. Understanding the historical context would involve examining prior awards for ROCONs, similar roll-on/roll-off or container vessels, and the overall budget allocated to maritime prepositioning and sealift capabilities over time.

Are there any identified risks associated with the age or condition of the government-owned ROCON vessels?

The provided data does not specify the age or current condition of the five government-owned ROCON vessels. However, any contract spanning over seven years for vessel operations inherently carries risks related to the vessels' physical state. Older vessels may require more extensive and costly maintenance, face increased breakdowns, and potentially struggle to meet modern operational or environmental standards. The contract's fixed-price nature shifts the direct cost risk of maintenance to the contractor, but significant unforeseen repair needs could still impact overall value or lead to contract modifications. A thorough assessment of the vessels' age and condition prior to and during the contract term is crucial for effective risk management.

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: N6238715R5301

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Crowley Holdings, Inc.

Address: 9487 REGENCY SQUARE BLVD, JACKSONVILLE, FL, 32225

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

Financial Breakdown

Contract Ceiling: $240,929,887

Exercised Options: $240,929,887

Current Obligation: $240,929,887

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline