DoD's $27.6M SURTASS-E Time Charter Vessel Contract Awarded to Hornbeck Offshore Operators LLC

Contract Overview

Contract Amount: $27,563,372 ($27.6M)

Contractor: Hornbeck Offshore Operators LLC

Awarding Agency: Department of Defense

Start Date: 2019-01-11

End Date: 2021-02-27

Contract Duration: 778 days

Daily Burn Rate: $35.4K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: N103B - C. MECONNAHEY - SURTASS-E TIME CHARTER VESSEL

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $27.6 million to HORNBECK OFFSHORE OPERATORS LLC for work described as: N103B - C. MECONNAHEY - SURTASS-E TIME CHARTER VESSEL Key points: 1. The contract for deep sea freight transportation was awarded to Hornbeck Offshore Operators LLC. 2. The contract value is $27,563,371.64, with a duration of 778 days. 3. Competition was conducted under Simplified Acquisition Procedures (SAP). 4. The contract type is Firm Fixed Price. 5. The award was made by the Department of the Navy.

Value Assessment

Rating: good

The contract value of $27.6M for a 778-day charter appears reasonable given the specialized nature of SURTASS-E operations and the limited market for such vessels. Benchmarking against similar long-term vessel charters for defense purposes would provide further context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), suggesting a limited competition approach. While SAP aims for efficiency, it may not always yield the lowest possible price compared to full and open competition for larger procurements.

Taxpayer Impact: The $27.6M expenditure represents taxpayer funds allocated for critical naval surveillance capabilities. The efficiency of the SAP competition method impacts the overall value for money achieved.

Public Impact

Ensures continued operational capability for the Navy's Surveillance Towed Array Sensor System (SURTASS-E). Supports critical intelligence gathering and anti-submarine warfare efforts. Provides essential logistical support for naval operations. The contract duration of over two years ensures stable platform availability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for higher costs due to limited competition under SAP.
Dependence on a single contractor for a critical operational asset.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Long contract duration ensures sustained operational support.
Awarded to an established operator in the offshore industry.

Sector Analysis

The Department of Defense frequently procures specialized maritime services, including vessel charters for surveillance and transportation. Spending in this sector is driven by national security requirements and the need for advanced technological capabilities.

Small Business Impact

The data indicates the award went to Hornbeck Offshore Operators LLC, a large business. There is no specific indication of small business participation in this particular contract award.

Oversight & Accountability

The contract was awarded by the Department of the Navy, a component of the Department of Defense, which has established oversight mechanisms for contract execution and financial management. Further review of specific oversight activities would be needed.

Related Government Programs

Deep Sea Freight Transportation
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential lack of robust competition due to SAP.
Contract duration may exceed actual operational needs.
Limited visibility into specific performance metrics and oversight.
Dependence on a single contractor for a critical asset.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.6 million to HORNBECK OFFSHORE OPERATORS LLC. N103B - C. MECONNAHEY - SURTASS-E TIME CHARTER VESSEL

Who is the contractor on this award?

The obligated recipient is HORNBECK OFFSHORE OPERATORS 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 $27.6 million.

What is the period of performance?

Start: 2019-01-11. End: 2021-02-27.

What was the specific rationale for using Simplified Acquisition Procedures (SAP) for a contract of this value and duration, and how did it impact price discovery?

The rationale for using SAP, typically for procurements under the SAT (currently $250,000, but historically higher), for a $27.6M contract is unusual and warrants further investigation. It might suggest a specific urgency, a unique market situation, or a potential misapplication of procurement procedures. This limited competition approach likely reduced the number of potential bidders, potentially impacting the government's ability to secure the most competitive pricing available in the broader market.

What are the key performance indicators (KPIs) for this SURTASS-E time charter, and how is performance being monitored to ensure mission effectiveness?

Key performance indicators for a SURTASS-E time charter would likely include vessel availability, operational readiness, adherence to mission schedules, crew performance, and maintenance compliance. The Department of the Navy would typically have a contracting officer's representative (COR) responsible for monitoring these KPIs, conducting regular performance reviews, and ensuring the vessel and its crew meet all contractual and operational requirements for effective surveillance missions.

Are there any contingency plans or alternative vessel providers identified in case of performance issues or unforeseen disruptions with Hornbeck Offshore Operators LLC?

Given the specialized nature of SURTASS-E operations and the limited pool of suitable vessels, contingency planning is crucial. While the contract is with Hornbeck Offshore Operators LLC, the Navy likely maintains awareness of other potential providers or assets that could be activated in emergencies. However, the transition to an alternative provider could be complex and time-consuming, potentially impacting mission continuity.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: N3220518R3516

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 103 NORTHPARK BLVD STE 300, COVINGTON, LA, 70433

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

Financial Breakdown

Contract Ceiling: $27,563,372

Exercised Options: $27,563,372

Current Obligation: $27,563,372

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline