Navy awards $44.6M long-term charter for landing vessel to Hornbeck Offshore Operators, LLC

Contract Overview

Contract Amount: $44,602,305 ($44.6M)

Contractor: Hornbeck Offshore Operators LLC

Awarding Agency: Department of Defense

Start Date: 2023-08-31

End Date: 2025-08-30

Contract Duration: 730 days

Daily Burn Rate: $61.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: EO14042. PM4/N103B R. NORRIS AWARD CONTRACT N32205-22-C-4177 (LONG-TERM CHARTER USMC STERN LANDING VESSEL) TO HORNBECK OFFSHORE OPERATORS, LLC.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92136

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $44.6 million to HORNBECK OFFSHORE OPERATORS LLC for work described as: EO14042. PM4/N103B R. NORRIS AWARD CONTRACT N32205-22-C-4177 (LONG-TERM CHARTER USMC STERN LANDING VESSEL) TO HORNBECK OFFSHORE OPERATORS, LLC. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type aims to control costs for the government. 3. The duration of 730 days indicates a significant, long-term operational need. 4. The service falls under Deep Sea Freight Transportation, a critical logistics function. 5. The awardee, Hornbeck Offshore Operators, LLC, is a specialized maritime services provider.

Value Assessment

Rating: good

The contract value of $44.6 million over two years for a long-term charter of a landing vessel appears reasonable given the specialized nature of the service. Benchmarking against similar long-term vessel charters for military use would provide a more precise value assessment. The firm-fixed-price structure helps mitigate cost overruns for the government, contributing to good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple bidders were likely solicited and considered. The specific number of bidders is not provided, but this method generally fosters price discovery and allows the government to select the most advantageous offer. The open competition suggests a healthy market for these specialized maritime services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government receives competitive rates for its needs.

Public Impact

The U.S. Marine Corps benefits from the reliable charter of a stern landing vessel for operational readiness. Services delivered include the transportation and support of military assets and personnel via sea. The geographic impact is likely focused on areas requiring amphibious or coastal operations, potentially global. Workforce implications include employment for maritime professionals, engineers, and support staff for the vessel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased operational costs if market rates for vessel charters rise significantly during the contract term.
Dependence on a single contractor for a critical asset could pose risks if performance issues arise.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Long-term charter ensures consistent availability of a specialized asset.
Award through full and open competition suggests a competitive market and potentially favorable pricing.

Sector Analysis

The maritime transportation sector is vital for global logistics and defense operations. This contract falls within the specialized niche of deep-sea freight and vessel chartering, particularly for military applications. The market for such services is characterized by high capital investment, stringent regulatory requirements, and a limited number of qualified operators. Comparable spending benchmarks would involve analyzing other long-term vessel charters awarded by defense agencies for similar operational needs.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and the prime contractor, Hornbeck Offshore Operators, LLC, is a significant entity in the maritime sector. There is no explicit information on subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether Hornbeck engages small businesses for support services, maintenance, or supplies, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of services as specified. Transparency is facilitated by the public nature of contract awards, though specific performance metrics and detailed oversight reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Sealift Command Contracts
Naval Vessel Charters
Amphibious Assault Vehicle Support
Marine Corps Logistics Support
Deep Sea Freight Services

Risk Flags

Contract Duration
Contract Type
Sole Source Potential
Small Business Impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.6 million to HORNBECK OFFSHORE OPERATORS LLC. EO14042. PM4/N103B R. NORRIS AWARD CONTRACT N32205-22-C-4177 (LONG-TERM CHARTER USMC STERN LANDING VESSEL) TO HORNBECK OFFSHORE OPERATORS, LLC.

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 $44.6 million.

What is the period of performance?

Start: 2023-08-31. End: 2025-08-30.

What is Hornbeck Offshore Operators, LLC's track record with the Department of Defense and other federal agencies?

Hornbeck Offshore Operators, LLC has a history of contracting with the U.S. government, particularly for maritime services. While specific details of past performance on similar long-term vessel charters are not provided in this data snippet, their involvement in this significant award suggests they meet the qualifications and performance standards required by the Department of Defense. A deeper dive into their contract history, including past performance reviews and any disputes or terminations, would offer a more comprehensive understanding of their reliability and suitability for this long-term commitment. Their experience in operating specialized vessels is a key indicator of their capability.

How does the $44.6 million contract value compare to similar long-term vessel charters for military use?

The $44.6 million value for a two-year charter of a stern landing vessel is a substantial figure, reflecting the specialized nature and operational demands of military maritime assets. Without specific details on the vessel's capabilities, capacity, and the exact scope of services included (e.g., crewing, maintenance, fuel), a direct comparison is challenging. However, long-term charters for military-grade vessels typically command higher prices due to stringent operational requirements, security protocols, and the need for specialized equipment and trained personnel. Benchmarking against other contracts for similar landing craft or support vessels awarded by the Navy or other branches over comparable durations would be necessary for a precise value assessment.

What are the primary risks associated with this long-term vessel charter contract?

The primary risks associated with this contract include potential cost increases if market rates for fuel or crewing escalate beyond projections, despite the firm-fixed-price structure. Operational risks involve the possibility of vessel downtime due to maintenance or unforeseen mechanical issues, which could impact the U.S. Marine Corps' operational readiness. There's also a dependency risk, as the government relies on Hornbeck Offshore Operators, LLC for a critical asset; any performance failures or financial instability of the contractor could disrupt essential services. Furthermore, geopolitical events or changes in operational requirements could necessitate modifications or early termination, leading to potential complexities.

How effective is the firm-fixed-price contract type in managing costs for this specific service?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and risks are understood, as is often the case with long-term vessel charters. For this contract, the FFP structure shifts the risk of cost overruns to the contractor, Hornbeck Offshore Operators, LLC. This incentivizes the contractor to manage their expenses efficiently to maintain profitability. While it provides significant cost certainty for the Department of the Navy, it also means the government may not benefit from potential cost savings if the contractor's actual expenses are lower than anticipated. The success of FFP hinges on accurate initial cost estimation and a stable operational environment.

What is the historical spending pattern for deep-sea freight transportation services by the Department of the Navy?

Historical spending patterns for deep-sea freight transportation by the Department of the Navy are substantial, reflecting its global operational reach and logistical requirements. The Navy frequently utilizes charter services for various vessel types, including cargo ships, tankers, and specialized craft like landing vessels, to support deployments, exercises, and sustainment operations. Spending in this category can fluctuate based on geopolitical conditions, the tempo of operations, and specific platform needs. Analyzing historical data would reveal trends in contract types (e.g., FFP vs. cost-plus), average contract durations, and the prevalence of full and open competition versus other methods, providing context for the current $44.6 million award.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3220521R4114

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $64,702,898

Exercised Options: $44,602,305

Current Obligation: $44,602,305

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline