Navy awards $424M for towing, salvage, and rescue services, with a 98% prime contractor performance rating

Contract Overview

Contract Amount: $423,966,037 ($424.0M)

Contractor: Bollinger Shipyards Lockport, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2018-03-16

End Date: 2030-01-07

Contract Duration: 4,315 days

Daily Burn Rate: $98.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TOWING, SALVAGE AND RESCUE, SHIP 1

Place of Performance

Location: HOUMA, TERREBONNE County, LOUISIANA, 70363

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $424.0 million to BOLLINGER SHIPYARDS LOCKPORT, L.L.C. for work described as: TOWING, SALVAGE AND RESCUE, SHIP 1 Key points: 1. The contract's value of $424 million over its lifespan indicates a significant investment in essential maritime support services. 2. A high prime contractor performance rating of 98% suggests a reliable and effective service provider. 3. The contract's duration, spanning from 2018 to 2030, points to a long-term need for these specialized capabilities. 4. The firm-fixed-price contract type aims to provide cost certainty for the government. 5. The North American Industry Classification System (NAICS) code 336611 categorizes this as Ship Building and Repairing, highlighting the industrial sector involved. 6. The contract was awarded under full and open competition after exclusion of sources, suggesting a competitive process with specific justifications.

Value Assessment

Rating: good

The total contract value of $423,966,036.65 for towing, salvage, and rescue services appears substantial. Benchmarking against similar long-term, specialized maritime support contracts would be necessary for a precise value-for-money assessment. However, the high performance rating of 98% suggests that the services rendered have met or exceeded expectations, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be open, specific sources were excluded, likely due to specialized requirements or prior performance. The number of bids received (5) suggests a moderate level of competition, which, combined with the exclusion of sources, may have influenced price discovery.

Taxpayer Impact: The competitive process, even with exclusions, aims to secure the best possible pricing for taxpayers. The fact that multiple bidders participated suggests that the government received a range of offers, contributing to a more informed selection.

Public Impact

Naval operations worldwide benefit from the availability of towing, salvage, and rescue capabilities, ensuring mission readiness and safety. The services provided are critical for maintaining the operational status of naval vessels and responding to emergencies at sea. The contract supports specialized maritime labor and infrastructure, particularly in Louisiana where the contractor is located. This contract ensures the U.S. Navy can respond effectively to maritime incidents, protecting personnel and assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to specialized nature of services and exclusion of certain sources.
Long contract duration could lead to potential for cost increases if market conditions change significantly.

Positive Signals

High prime contractor performance rating (98%) indicates strong past performance and reliability.
Firm-fixed-price contract type provides cost predictability for the government.
Awarded under full and open competition, suggesting a structured procurement process.

Sector Analysis

This contract falls within the shipbuilding and repair sector, specifically supporting maritime logistics and emergency response for the Navy. The market for specialized towing, salvage, and rescue services is niche, often dominated by a few experienced contractors capable of meeting stringent military requirements. Comparable spending would likely be found within other defense contracts for fleet support and readiness.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this contract. Therefore, the direct impact on small businesses through set-asides is likely minimal. However, the prime contractor may engage small businesses for subcontracting opportunities, depending on the scope of services and their supply chain strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Vessel Towing Services
Maritime Salvage Operations
Search and Rescue at Sea
Fleet Support Services
Ship Repair and Maintenance

Risk Flags

Potential for limited competition due to specialized nature of services.
Long contract duration may introduce cost volatility risks.
Exclusion of sources requires careful justification and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $424.0 million to BOLLINGER SHIPYARDS LOCKPORT, L.L.C.. TOWING, SALVAGE AND RESCUE, SHIP 1

Who is the contractor on this award?

The obligated recipient is BOLLINGER SHIPYARDS LOCKPORT, 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 $424.0 million.

What is the period of performance?

Start: 2018-03-16. End: 2030-01-07.

What is the historical spending trend for towing, salvage, and rescue services by the Department of the Navy?

Historical spending on towing, salvage, and rescue services by the Department of the Navy has fluctuated based on operational tempo, fleet size, and specific acquisition programs. While this specific contract represents a significant single award of $424 million, the Navy's overall budget allocation for maritime support services is substantial. Analyzing trends requires examining annual appropriations for relevant categories, such as operational support, ship maintenance, and readiness. Factors like geopolitical events, the age of the fleet, and the increasing complexity of naval operations can influence the demand and associated spending for these critical services over time. Without access to detailed historical budget data broken down by specific service categories, a precise trend analysis is challenging, but it's clear these services are a consistent requirement for maintaining naval power projection and safety.

How does the performance rating of 98% compare to industry benchmarks for similar maritime support contracts?

A 98% performance rating is exceptionally high and generally considered excellent within the defense contracting landscape. For specialized services like towing, salvage, and rescue, where operational success is critical and failure can have severe consequences, such a high rating suggests the contractor, Bollinger Shipyards Lockport, L.L.C., has consistently met or exceeded contractual requirements. Industry benchmarks for performance ratings can vary, but consistently achieving scores above 90% typically places a contractor in the top tier. This high rating indicates a strong track record of reliability, responsiveness, and quality service delivery, which is crucial for maintaining naval readiness and safety at sea. It suggests effective management, skilled personnel, and robust operational capabilities.

What are the potential risks associated with a long-duration contract (2018-2030) for specialized maritime services?

Long-duration contracts, such as this one extending to 2030, carry several potential risks. Firstly, there's the risk of cost escalation; the firm-fixed-price nature helps mitigate this, but unforeseen market shifts in labor, fuel, or equipment costs over more than a decade could strain the contractor's margins or lead to requests for equitable adjustments. Secondly, technological advancements in towing, salvage, or rescue equipment could render current capabilities obsolete, requiring costly upgrades not fully anticipated at the contract's outset. Thirdly, changes in naval operational requirements or strategic priorities could alter the demand for these specific services. Finally, contractor performance could degrade over time due to management changes, workforce attrition, or complacency, although the high initial performance rating mitigates this concern for the early period. Robust oversight and clear contract modification clauses are essential to manage these risks.

What is the significance of the NAICS code 336611 (Ship Building and Repairing) for this contract?

The assignment of NAICS code 336611, 'Ship Building and Repairing,' to this contract for towing, salvage, and rescue services is significant as it places the procurement within a specific industrial and economic context. While towing and salvage are distinct operational services, they often require specialized vessels and equipment that are either built or heavily maintained within the shipbuilding and repair industry. This code suggests that the contractor likely possesses capabilities related to vessel construction, modification, or extensive repair, which are essential for maintaining the specialized fleet used for salvage and rescue operations. It also implies that the contract may involve aspects of vessel readiness and maintenance that fall under the purview of ship repair, ensuring the assets are in optimal condition for demanding maritime tasks.

How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method impact cost and availability of services?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method is a nuanced approach to procurement. It signifies that the initial intent was for broad competition, but specific sources were later excluded. This exclusion typically occurs when certain requirements (e.g., security, specialized technology, past performance) can only be met by a limited number of entities, or if there are specific justifications for excluding others. While it aims to ensure that the remaining pool of bidders can meet stringent requirements, it can potentially limit the number of offers received compared to unrestricted full and open competition. This reduced competition might, in some cases, lead to less aggressive pricing. However, if the excluded sources were not capable of meeting the critical needs, the remaining competition could still yield a fair and reasonable price while ensuring the government secures essential, high-quality services.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002417R2207

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8365 HIGHWAY 308, LOCKPORT, LA, 70374

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

Financial Breakdown

Contract Ceiling: $626,760,335

Exercised Options: $423,966,037

Current Obligation: $423,966,037

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline