DoD's $446M contract for navigational services awarded to American Overseas Marine LLC shows fair value with 9 bidders

Contract Overview

Contract Amount: $446,327,907 ($446.3M)

Contractor: American Overseas Marine CO. LLC

Awarding Agency: Department of Defense

Start Date: 2004-08-31

End Date: 2009-10-16

Contract Duration: 1,872 days

Daily Burn Rate: $238.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: QUINCY, NORFOLK County, MASSACHUSETTS, 02169

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $446.3 million to AMERICAN OVERSEAS MARINE CO. LLC for work described as: Key points: 1. The contract's value appears reasonable given the scope of navigational services provided over its duration. 2. A competitive bidding process with 9 participants suggests a healthy market for these services. 3. The firm-fixed-price structure helps mitigate cost overrun risks for the government. 4. Performance was rated 'satisfactory' (st), indicating the contractor met contractual obligations. 5. This contract falls within the broader category of logistical and operational support for naval activities. 6. The duration of the contract (1872 days) allowed for sustained service delivery.

Value Assessment

Rating: good

The total award amount of $446.3 million for navigational services over approximately five years suggests a significant but potentially fair investment. Benchmarking against similar large-scale maritime support contracts is challenging without more specific service details. However, the presence of 9 bidders indicates that the pricing was likely competitive and acceptable to multiple market participants. The firm-fixed-price contract type further supports value by locking in costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 9 bids received. This level of competition is generally considered robust and suggests that the government had a wide range of potential contractors to choose from. A higher number of bidders typically leads to more competitive pricing and a greater likelihood of selecting the best value solution. The agency's ability to attract 9 bids indicates a well-defined requirement and a responsive market.

Taxpayer Impact: The strong competition in this procurement is beneficial for taxpayers, as it likely drove down prices and ensured the government received a fair market rate for essential navigational services.

Public Impact

Navigational services were delivered to support Department of the Navy operations, ensuring safe and efficient maritime movement. The primary beneficiaries are the U.S. Navy and its operational readiness, enabling critical missions. Geographic impact is likely global, supporting naval deployments and operations wherever required. The contract supported specialized maritime services, potentially involving skilled mariners and technical personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of nearly five years could lead to vendor lock-in if not managed carefully.
Reliance on a single awardee for such a critical service necessitates robust performance monitoring.

Positive Signals

Full and open competition suggests a healthy market and potential for future competitive awards.
Firm-fixed-price contract type minimizes the risk of cost overruns for the government.
Satisfactory performance rating indicates the contractor met expectations.

Sector Analysis

This contract falls within the broader defense logistics and maritime services sector. The market for navigational services is specialized, often involving companies with deep expertise in maritime operations, vessel management, and potentially specialized equipment. Spending in this area is crucial for maintaining naval operational capabilities and global reach. Comparable spending benchmarks would typically be found within the Department of Defense's overall budget for operational support and logistics.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large-value contract likely requiring significant resources and specialized capabilities, it may have been less accessible to small businesses. However, the prime contractor, AMERICAN OVERSEAS MARINE CO. LLC, may engage small businesses as subcontractors, contributing to the small business ecosystem indirectly. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Performance monitoring, quality assurance, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Vessel Operations
Maritime Logistics Support
Defense Transportation Services
Ship Husbandry Services
Fleet Support Services

Risk Flags

Long contract duration may require careful monitoring for evolving technology and market shifts.
Performance rating of 'satisfactory' indicates meeting requirements but may not reflect exceptional service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $446.3 million to AMERICAN OVERSEAS MARINE CO. LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is AMERICAN OVERSEAS MARINE CO. 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 $446.3 million.

What is the period of performance?

Start: 2004-08-31. End: 2009-10-16.

What is the historical spending trend for navigational services by the Department of the Navy?

Analyzing historical spending trends for navigational services by the Department of the Navy requires access to comprehensive budget data over multiple fiscal years. While this specific contract award of $446.3 million provides a data point for 2004-2009, it does not reveal broader trends. Generally, spending in this category can fluctuate based on geopolitical factors, fleet size and deployment tempo, and the availability of competing service providers. Periods of increased global maritime activity or heightened security concerns often correlate with higher demand and potentially increased spending on navigational and related support services. Without longitudinal data, it's difficult to ascertain if this award represents an increase, decrease, or stable level of investment compared to prior or subsequent periods.

How does the per-unit cost of these navigational services compare to industry benchmarks?

Determining a precise per-unit cost for these navigational services is challenging without a clear definition of the 'unit' (e.g., per vessel, per port call, per mile navigated, per hour of service). The contract's total value of $446.3 million covers a broad scope of 'Navigational Services to Shipping' over 1872 days. Industry benchmarks for such services are highly variable, depending on the complexity, geographic location, and specific technologies employed. Given the firm-fixed-price nature and the competitive award with 9 bidders, it suggests the price was deemed fair within the market context at the time of award. However, a direct per-unit comparison to external benchmarks would require a more granular breakdown of the services rendered and their associated costs, which is not available in the provided data.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

The provided data indicates the contract performance was rated 'satisfactory' (st). While this is a high-level assessment, typical Key Performance Indicators (KPIs) for navigational services contracts often include metrics related to timeliness of service provision, accuracy of navigational data or charting, vessel safety adherence, response times to requests, and overall operational efficiency. For a contract supporting shipping, KPIs might also involve minimizing delays, ensuring compliance with maritime regulations, and maintaining the operational readiness of supported vessels. The 'satisfactory' rating implies that AMERICAN OVERSEAS MARINE CO. LLC met the essential requirements outlined in the contract, though specific details of the KPIs and their measurement are not detailed in this summary.

What is the track record of AMERICAN OVERSEAS MARINE CO. LLC with similar government contracts?

AMERICAN OVERSEAS MARINE CO. LLC has a history of securing and performing on government contracts, particularly within the maritime sector. The data shows this specific contract (488330) was awarded in 2004 and completed in 2009. While the 'satisfactory' performance rating on this large contract is a positive indicator, a comprehensive assessment of their track record would involve reviewing numerous other contracts, including their value, duration, scope of services, and performance history (e.g., ratings, any disputes or terminations). Their continued presence in the federal contracting space suggests a generally reliable performance history, but specific details on past issues or exceptional successes would require deeper database analysis.

What are the potential risks associated with a long-duration contract for navigational services?

Long-duration contracts, like this 1872-day (approx. 5 years) award, carry several potential risks. Firstly, there's the risk of technological obsolescence; navigational technology can evolve rapidly, and a long-term contract might not fully leverage newer, more efficient systems unless contract modifications are implemented. Secondly, market conditions can change, potentially making the fixed price less favorable to the government over time if market rates decrease significantly. Thirdly, maintaining consistent oversight and performance management over an extended period can be challenging for the contracting agency. Finally, there's the risk of 'vendor lock-in,' where the incumbent contractor becomes deeply integrated, making it difficult to switch providers even if performance issues arise or better options become available later.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Water Transportation › Navigational Services to Shipping

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 116 E HOWARD ST, QUINCY, MA, 08

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline