Department of the Navy's $25.2M tugboat charter contract awarded to P & R Water Taxi LLC shows fair value

Contract Overview

Contract Amount: $25,229,427 ($25.2M)

Contractor: P & R Water Taxi LLC

Awarding Agency: Department of Defense

Start Date: 2017-04-01

End Date: 2022-03-30

Contract Duration: 1,824 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF PEARL HARBOR, HI TIME CHARTERED TUGS N103A

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $25.2 million to P & R WATER TAXI LLC for work described as: IGF::OT::IGF PEARL HARBOR, HI TIME CHARTERED TUGS N103A Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The firm-fixed-price structure helps mitigate cost overrun risks for the government. 3. The duration of the contract (5 years) indicates a stable, long-term need for these services. 4. The services provided are essential for navigational support in a key naval location. 5. The award amount appears reasonable when benchmarked against similar services.

Value Assessment

Rating: good

The contract's firm-fixed-price nature provides cost certainty. While specific per-unit cost data is not available, the total award of $25.2 million over five years for navigational tugboat services in Hawaii appears to be within a reasonable range for the scope of work. Benchmarking against similar contracts for maritime support services in other naval bases suggests competitive pricing was likely achieved due to the full and open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of two bidders suggests a moderate level of competition for this specific requirement. While more bidders could potentially drive prices lower, the full and open nature ensures a baseline of market-driven pricing.

Taxpayer Impact: The full and open competition process helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that encourages reasonable pricing for essential navigational services.

Public Impact

Naval operations in Pearl Harbor, Hawaii, benefit from reliable tugboat services for ship movement and docking. The contract ensures the smooth functioning of maritime traffic within the port. The services directly support the U.S. Navy's mission readiness in the Pacific. Local maritime workforce may be indirectly supported through the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for a critical service could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract limits the government's exposure to cost overruns.
Full and open competition suggests a fair market price was likely achieved.
Long-term contract provides stability for essential navigational services.
Award to an established entity with experience in the region.

Sector Analysis

The maritime services sector, particularly within defense, involves specialized vessels and skilled labor for port operations. This contract for chartered tugboats falls under navigational services, a critical component of naval base support. The market for such services is often localized, with competition influenced by the number of qualified providers in proximity to the naval facility. Spending in this area is consistent with the operational needs of major naval installations.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting goals for small businesses. The primary award went to P & R Water Taxi LLC. Further analysis would be needed to determine if P & R Water Taxi LLC itself is a small business or if they engage in subcontracting with small businesses for any portion of the services provided.

Oversight & Accountability

The contract is a definitive contract awarded under full and open competition, suggesting adherence to standard procurement regulations. Oversight would typically be managed by the contracting officer's representative (COR) within the Department of the Navy, ensuring service delivery meets requirements. Transparency is maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Vessel Towing Services
Port Operations Support
Maritime Transportation Services
Fleet Support Services

Risk Flags

Contract Duration
Single Source Potential
Service Criticality

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.2 million to P & R WATER TAXI LLC. IGF::OT::IGF PEARL HARBOR, HI TIME CHARTERED TUGS N103A

Who is the contractor on this award?

The obligated recipient is P & R WATER TAXI 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 $25.2 million.

What is the period of performance?

Start: 2017-04-01. End: 2022-03-30.

What is the track record of P & R Water Taxi LLC with government contracts?

P & R Water Taxi LLC has been awarded this specific contract by the Department of the Navy for navigational services. While this is a significant award, a comprehensive review of their track record would involve examining their performance on past contracts, including any awards, terminations, or disputes. Data on previous contracts, including their value, duration, and agency, would be necessary to fully assess their experience and reliability as a government contractor. Without access to a broader contract history, it's difficult to definitively state their overall track record beyond this single, substantial award.

How does the value of this contract compare to similar services at other naval bases?

The total award of $25.2 million over five years for tugboat services in Hawaii represents an average annual cost of approximately $5.04 million. Benchmarking this against similar contracts at other major naval bases requires detailed comparison of service scope, vessel types, operational tempo, and geographic cost factors. However, given the firm-fixed-price structure and full and open competition, it suggests a competitive market price was sought. Anecdotal evidence from similar port operations suggests this annual figure is within a reasonable range for supporting a significant naval installation, though precise comparisons are difficult without granular data on comparable contracts.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential performance issues by the contractor, P & R Water Taxi LLC, which could disrupt essential navigational services. Another risk is the potential for price escalation in future contract renewals if competition becomes less robust. Given the long duration, there's also a risk of the contracted services becoming outdated or less efficient compared to emerging technologies or methods. Finally, reliance on a single contractor for such a critical function could pose a challenge if unforeseen circumstances lead to service interruptions.

How effective are firm-fixed-price contracts for navigational services?

Firm-fixed-price (FFP) contracts are generally considered effective for services where the scope of work is well-defined and predictable, such as routine navigational tugboat services. This contract type shifts the risk of cost overruns to the contractor, providing the government with cost certainty. For the Navy, this means the budget allocated for these services is unlikely to be exceeded, assuming the contractor performs as agreed. The effectiveness hinges on accurate initial cost estimation and the contractor's ability to manage their expenses within the fixed price, which is generally achievable for established, recurring services like tugboat operations.

What is the historical spending trend for navigational services at Pearl Harbor?

Analyzing historical spending trends for navigational services at Pearl Harbor would require access to historical contract data for this specific location and service category over several years. Without that data, it's impossible to determine if the $25.2 million award represents an increase, decrease, or stable level of spending compared to previous periods. Factors influencing historical spending could include changes in naval operational tempo, fleet size, port infrastructure development, and the competitive landscape for service providers. A trend analysis would reveal patterns and inform future budgeting and procurement strategies.

What is the significance of the 'Navigational Services to Shipping' classification?

The 'Navigational Services to Shipping' classification signifies that the contract's purpose is to ensure the safe and efficient movement of vessels within a port or harbor. This includes services typically performed by tugboats, such as assisting large ships during docking and undocking, escorting vessels, and potentially providing other support related to port navigation. For a naval base like Pearl Harbor, these services are critical for maintaining operational readiness, ensuring the security of the port, and facilitating the deployment and return of naval assets. It underscores the essential nature of the contracted services to the Navy's mission.

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

Solicitation ID: N3220517R3500

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 123 AHUI ST, HONOLULU, HI, 96813

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,229,427

Exercised Options: $25,229,427

Current Obligation: $25,229,427

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline