Department of the Navy awards $146.6M contract for deep sea passenger transportation services

Contract Overview

Contract Amount: $146,643,523 ($146.6M)

Contractor: Hornbeck Offshore Services LLC

Awarding Agency: Department of Defense

Start Date: 2006-02-24

End Date: 2008-09-30

Contract Duration: 949 days

Daily Burn Rate: $154.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: COVINGTON, ST. TAMMANY County, LOUISIANA, 70433

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $146.6 million to HORNBECK OFFSHORE SERVICES LLC for work described as: Key points: 1. Contract value represents significant investment in specialized maritime logistics. 2. Competition dynamics suggest a potentially efficient market for these niche services. 3. Contract duration indicates a need for sustained, long-term operational support. 4. Fixed-price structure aims to control costs and provide budget certainty. 5. Geographic focus on Louisiana highlights regional importance for naval operations. 6. The award to a single contractor warrants scrutiny of market concentration.

Value Assessment

Rating: fair

The contract value of $146.6 million for deep sea passenger transportation over approximately two years is substantial. Benchmarking this against similar specialized maritime contracts is challenging due to the niche nature of 'deep sea passenger transportation.' However, the fixed-price contract type suggests an attempt to manage costs. Without more granular data on the scope of services (e.g., number of passengers, routes, vessel specifications), a precise value-for-money assessment is difficult. The awarded amount appears to be within a reasonable range for large-scale, specialized transportation, but further analysis of the contractor's bid relative to estimated costs would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. This suggests a limited competitive landscape, potentially due to specific technical requirements, security clearances, or existing relationships that narrowed the pool of eligible bidders. The number of bidders is not specified, but the limited nature of the competition could impact price discovery and potentially lead to higher costs than a truly open competition.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price achievable in a broader market. This structure necessitates careful oversight to ensure fair pricing.

Public Impact

Naval personnel and potentially civilian passengers requiring transport to deep sea locations benefit from this service. Essential logistical support for naval operations, potentially including troop movement or specialized mission deployment. The contract has a geographic impact primarily centered around Louisiana, suggesting a strategic operational hub. Workforce implications include employment for vessel crews, support staff, and related maritime industries in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential price inflation and lack of market pressure.
Exclusion of sources, even if justified, reduces the opportunity for innovative solutions from a wider range of providers.
The specific nature of 'deep sea passenger transportation' might create barriers to entry for new competitors.

Positive Signals

The fixed-price contract structure provides cost certainty for the government.
Awarding to a single contractor may indicate specialized capabilities required for the mission.
The contract duration suggests a stable, predictable need for these services.

Sector Analysis

The maritime transportation sector is critical for global logistics and defense. Within this sector, specialized services like deep sea passenger transport are niche but vital for specific government operations. The market size for such highly specialized services is difficult to quantify but is likely dominated by a few key players with the necessary certifications, equipment, and experience. This contract fits within the broader defense logistics and transportation category, supporting naval readiness and operational reach.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Given the specialized nature and likely high value of deep sea transportation, it is probable that larger, established maritime companies are the primary participants. There is no explicit information on subcontracting plans, but large prime contractors often engage small businesses for support services, though this is not guaranteed.

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 structure, which shifts performance risk to the contractor. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Transportation Services
Maritime Logistics Support
Deep Sea Operations Support
Defense Passenger Movement

Risk Flags

Limited competition may lead to higher costs.
Exclusion of sources requires strong justification.
Potential for operational risks inherent in deep sea travel.
Need for robust performance monitoring due to specialized service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $146.6 million to HORNBECK OFFSHORE SERVICES LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HORNBECK OFFSHORE SERVICES 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 $146.6 million.

What is the period of performance?

Start: 2006-02-24. End: 2008-09-30.

What is the track record of HORNBECK OFFSHORE SERVICES LLC in providing deep sea passenger transportation services to the government?

HORNBECK OFFSHORE SERVICES LLC has a history of providing maritime services, including vessel charter and transportation. While the provided data specifies this particular contract for deep sea passenger transportation, their broader portfolio likely includes similar or related services. To fully assess their track record for this specific service, a deeper dive into past performance reviews, any documented issues on previous government contracts, and their experience with the specific operational requirements (e.g., vessel types, safety protocols, route complexities) would be necessary. Their status as a recipient of this significant contract suggests they possess the necessary qualifications and capacity, but a comprehensive review would involve examining contract close-out reports and any performance metrics from prior engagements.

How does the awarded amount of $146.6 million compare to similar deep sea passenger transportation contracts?

Directly comparing the $146.6 million award for 'Deep Sea Passenger Transportation' is challenging due to the highly specialized and potentially unique nature of this service. Standard maritime contract databases may not isolate this specific category. However, large-scale vessel charters and specialized maritime support contracts for defense purposes can range from tens to hundreds of millions of dollars, depending on duration, vessel size, operational complexity, and geographic scope. The fixed-price nature of this contract suggests a defined scope, which aids in cost control. Without knowing the exact number of passengers, routes, vessel specifications, and duration beyond the end date, a precise benchmark is difficult. It appears to be a substantial investment, reflecting the specialized requirements of the service.

What are the primary risks associated with this deep sea passenger transportation contract?

Key risks include operational risks such as vessel mechanical failures, weather-related delays impacting mission timelines, and potential safety incidents at sea, which are inherent in deep sea operations. There are also performance risks if the contractor fails to meet service level agreements, impacting naval readiness. Given the limited competition, there's a risk of price escalation over time if follow-on contracts are needed or if market conditions change unfavorably. Security risks, particularly if sensitive personnel or information are involved, are also a consideration. Finally, regulatory compliance risks related to maritime safety and environmental standards must be managed throughout the contract's life.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' approach for this type of specialized service?

This procurement approach aims to balance the need for competition with the reality of specialized requirements. It allows the government to solicit bids from all responsible sources but provides a mechanism to exclude those who cannot meet stringent technical, security, or capability criteria. For niche services like deep sea passenger transport, where only a few companies may possess the necessary assets and expertise, this approach can be effective in ensuring qualified providers participate. However, it inherently limits the breadth of competition compared to truly open bidding. Its effectiveness hinges on the justification for excluding sources; if exclusions are overly broad or arbitrary, it can stifle competition and lead to suboptimal pricing for taxpayers.

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

Historical spending data specifically for 'Deep Sea Passenger Transportation' is not readily available in aggregated public databases. This suggests it may be a less frequent or highly specialized requirement, possibly bundled within broader maritime support contracts. The Department of the Navy, however, consistently spends billions annually on a wide array of maritime services, including vessel operations, logistics, maintenance, and transportation. Analyzing broader categories like 'Oceanographic Research Vessels,' 'Passenger Ships,' or 'Towing and Tug Services' might offer indirect insights into related spending. The $146.6 million awarded here represents a significant single investment for this specific service, indicating a substantial need at the time of award.

What are the implications of the contract being awarded in 2006 for services ending in 2008?

This contract was awarded in 2006 for services to be performed through September 2008, indicating a performance period of approximately two years and five months. This duration suggests a planned, medium-term requirement for the deep sea passenger transportation services. Such a timeframe allows for operational stability and predictability for the Navy's needs. From a cost perspective, a fixed-price contract over this period provides budget certainty. The relatively short duration, compared to some major defense contracts, might also reflect evolving operational requirements or the possibility of re-competition or contract modification based on performance and changing needs.

Industry Classification

NAICS: Transportation and Warehousing › Deep Sea, Coastal, and Great Lakes Water Transportation › Deep Sea Passenger Transportation

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hornbeck Offshore Services, Inc. (UEI: 947299590)

Address: 103 NORTH PARK BLVD #300, COVINGTON, LA, 01

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline