Navy awards $25.6M contract for tugboat services in Hawaii, highlighting navigational support needs

Contract Overview

Contract Amount: $25,640,481 ($25.6M)

Contractor: P & R Water Taxi LLC

Awarding Agency: Department of Defense

Start Date: 2022-03-23

End Date: 2026-10-30

Contract Duration: 1,682 days

Daily Burn Rate: $15.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: N103B-G. BAKER-PM4-AWARD CONTRACT N32205-22-C-4038 PEARL HARBOR TUGS TO P&R WATER TAXI, LLC

Place of Performance

Location: JBPHH, HONOLULU County, HAWAII, 96853

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $25.6 million to P & R WATER TAXI LLC for work described as: N103B-G. BAKER-PM4-AWARD CONTRACT N32205-22-C-4038 PEARL HARBOR TUGS TO P&R WATER TAXI, LLC Key points: 1. The contract value of $25.6 million over approximately 4 years suggests a significant investment in essential maritime operations. 2. Full and open competition was utilized, indicating a potentially robust bidding process and competitive pricing. 3. The firm-fixed-price contract type aims to provide cost certainty for the government. 4. This award addresses the critical need for navigational services to shipping in the Hawaii region. 5. The contractor, P&R Water Taxi LLC, is a new awardee for this specific service, warranting performance monitoring. 6. The duration of the contract (1682 days) allows for sustained operational support.

Value Assessment

Rating: good

The contract value of $25.6 million for navigational tugboat services over roughly four years appears reasonable given the critical nature of maritime support in a key strategic location like Hawaii. Benchmarking against similar contracts for tugboat services in other naval ports would provide a more precise value-for-money assessment. However, the firm-fixed-price structure suggests an effort to control costs. The absence of specific performance metrics in the provided data makes a detailed value assessment challenging, but the award itself indicates a recognized need and a budgeted allocation for these essential services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified vendors were likely solicited and had the opportunity to bid. This approach typically fosters a competitive environment, which can lead to more favorable pricing and better service offerings for the government. The fact that it was competed openly implies that the Navy sought the best value through a transparent process, rather than being limited to a pre-selected group of contractors.

Taxpayer Impact: Taxpayers benefit from full and open competition through the potential for lower prices and higher quality services due to market forces driving efficiency and innovation among bidders.

Public Impact

Naval operations in Hawaii will benefit from reliable tugboat services, ensuring the safe and efficient movement of vessels. Shipping and maritime traffic in and around Pearl Harbor will receive essential navigational support. The contract supports the Department of the Navy's strategic presence and operational readiness in the Pacific. Local jobs may be supported through the contractor's operations and potential subcontracting in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Performance of a new awardee for this specific service requires close monitoring to ensure reliability and adherence to contract terms.
The firm-fixed-price contract, while offering cost certainty, places the risk of cost overruns on the contractor, which could potentially impact service quality if not managed effectively.

Positive Signals

The use of full and open competition suggests a robust procurement process that likely yielded competitive pricing.
The contract's duration indicates a stable, long-term need for these services, providing predictability for both the Navy and the contractor.
The firm-fixed-price contract type is generally favorable for the government in managing budget predictability.

Sector Analysis

The maritime services sector, particularly tugboat operations, is critical for naval bases and commercial shipping ports. This contract falls within the broader category of logistical and support services essential for maintaining operational readiness and facilitating trade. The market for such services is often characterized by specialized equipment and experienced personnel. Comparable spending benchmarks would typically be assessed based on the number of tugs, operational hours, and the complexity of the port environment, with major naval installations often representing significant contract values.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or set-aside benefits for small businesses stemming from this specific award. The primary contractor, P&R Water Taxi LLC, is likely a larger entity or has secured the prime contract through open competition. Analysis of potential subcontracting opportunities for small businesses would require further investigation into the contractor's specific utilization plans.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards, delivery schedules, and payment clauses. Transparency is facilitated through the Federal Procurement Data System (FPDS) where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Vessel Towing Services
Port Operations Support
Maritime Logistics
Shipping Navigation Aids

Risk Flags

New Contractor Performance Risk
Potential for Service Disruption
Cost Overrun Risk (Contractor Side)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.6 million to P & R WATER TAXI LLC. N103B-G. BAKER-PM4-AWARD CONTRACT N32205-22-C-4038 PEARL HARBOR TUGS TO P&R WATER TAXI, LLC

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 $25.6 million.

What is the period of performance?

Start: 2022-03-23. End: 2026-10-30.

What is the track record of P&R Water Taxi LLC in performing similar government contracts?

The provided data indicates that P&R Water Taxi LLC is the awardee for contract N32205-22-C-4038. However, it does not offer specific details regarding their past performance on similar government contracts. To assess their track record, a review of their contract history within the Federal Procurement Data System (FPDS) or other government databases would be necessary. This would involve looking for previous awards for tugboat services, navigational support, or other maritime operations, and examining performance evaluations associated with those contracts. A lack of extensive prior government contract experience could represent a potential risk factor that warrants closer monitoring of their performance on this new award.

How does the awarded price compare to market rates for similar tugboat services in Hawaii?

The awarded price of $25.6 million over approximately 1682 days (roughly 4.6 years) equates to an average annual cost of approximately $5.57 million. To benchmark this against market rates, one would need to compare it with pricing structures of other commercial tugboat operators in the Hawaii region, considering factors such as vessel size, crew, operational hours, and specific services provided (e.g., docking, undocking, towing). Information on commercial rates is not directly available in the provided data. However, the use of 'full and open competition' suggests that the Navy aimed to secure competitive pricing, implying that the awarded price is likely aligned with or favorable compared to prevailing market conditions, assuming a robust bidding process.

What are the primary risks associated with this contract award?

The primary risks associated with this contract include potential performance issues from P&R Water Taxi LLC, especially if they have limited prior experience with large-scale government contracts of this nature. Another risk is related to the firm-fixed-price (FFP) contract type; while beneficial for budget certainty, it places the financial risk of cost overruns on the contractor. If the contractor mismanages costs, it could potentially lead to compromises in service quality or operational disruptions. Furthermore, unforeseen operational challenges in the dynamic maritime environment of Hawaii could impact service delivery. The geographic location also presents logistical considerations.

How effective is the firm-fixed-price contract type in ensuring value for money for this navigational service?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and risks are understood. For navigational tugboat services, where the requirements are relatively predictable (e.g., assisting ship movements, harbor operations), an FFP contract provides cost certainty for the government. This means the total price is fixed, regardless of the contractor's actual costs. This structure incentivizes the contractor to manage their expenses efficiently to maximize profit. The effectiveness hinges on the accuracy of the initial cost estimates and the clarity of the contract's performance standards. If the scope is well-defined, FFP can lead to significant savings compared to cost-reimbursement contracts.

What is the historical spending pattern for navigational services to shipping in the Hawaii region by the Department of the Navy?

The provided data focuses on a single award (N32205-22-C-4038) and does not offer historical spending patterns for navigational services to shipping in Hawaii. To determine historical spending, one would need to query the Federal Procurement Data System (FPDS) for all contracts awarded by the Department of the Navy (or specifically the Navy Region Hawaii) for 'Navigational Services to Shipping' (NAICS code 488330) or similar service categories over several fiscal years. This analysis would reveal the total expenditure, the number of contracts awarded, the primary contractors, and the average contract values, providing context for the current $25.6 million award.

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: N3220522R2053

Offers Received: 1

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: $27,941,521

Exercised Options: $25,640,481

Current Obligation: $25,640,481

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline