Navy awards $43.5M contract for acoustic array towing services to Hornbeck Offshore Operators LLC

Contract Overview

Contract Amount: $43,475,042 ($43.5M)

Contractor: Hornbeck Offshore Operators LLC

Awarding Agency: Department of Defense

Start Date: 2023-02-23

End Date: 2026-05-21

Contract Duration: 1,183 days

Daily Burn Rate: $36.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: N103B / PM2 / J. DASSOW / TIME CHARTER TO TOW AN ACOUSTIC ARRAY FOR SURVEILLANCE TOWED ARRAY SENSOR SYSTEM (SURTASS)-E VESSEL

Place of Performance

Location: COVINGTON, SAINT TAMMANY County, LOUISIANA, 70433

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $43.5 million to HORNBECK OFFSHORE OPERATORS LLC for work described as: N103B / PM2 / J. DASSOW / TIME CHARTER TO TOW AN ACOUSTIC ARRAY FOR SURVEILLANCE TOWED ARRAY SENSOR SYSTEM (SURTASS)-E VESSEL Key points: 1. Contract provides essential support for the Surveillance Towed Array Sensor System (SURTASS-E) program. 2. The firm-fixed-price structure aims to control costs for towing services. 3. Competition was full and open, suggesting a potentially competitive pricing environment. 4. The contract duration extends over three years, indicating a long-term need. 5. The award value is significant within the specialized maritime support sector. 6. The contractor has experience in offshore operations, relevant to the service required.

Value Assessment

Rating: good

The contract's firm-fixed-price nature provides cost certainty for the Navy. Benchmarking against similar specialized maritime support contracts is challenging due to the niche nature of towing acoustic arrays for surveillance systems. However, the contractor's experience and the competitive award process suggest a reasonable value for the services rendered. The total value of $43.5 million over approximately three years indicates a substantial investment in maintaining critical surveillance capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster price discovery and ensure the government receives competitive pricing. The specific number of bidders is not provided, but the 'full and open' designation implies a robust competitive environment was sought.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down prices through market forces, ensuring that the government is not overpaying for essential services.

Public Impact

The primary beneficiary is the U.S. Navy, which receives critical support for its underwater surveillance capabilities. The service delivered is the towing of an acoustic array for the SURTASS-E system, essential for intelligence gathering and maritime domain awareness. The geographic impact is primarily focused on operational areas where the SURTASS-E vessel conducts its missions, likely global maritime environments. Workforce implications include employment for the vessel crew and support personnel managed by Hornbeck Offshore Operators LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen operational challenges arise, despite the fixed-price structure.
Dependence on a single contractor for a critical, long-duration service could pose supply chain risks.
The specialized nature of the equipment and service may limit readily available alternative providers in emergencies.

Positive Signals

The firm-fixed-price contract type helps mitigate cost uncertainty for the government.
The contractor's established experience in offshore operations suggests a lower risk of performance issues.
Full and open competition indicates a potentially efficient use of taxpayer funds through market competition.

Sector Analysis

This contract falls within the specialized maritime services sector, specifically focusing on support for advanced naval surveillance systems. The market for such niche services is limited, often involving a few key players with the necessary technical expertise and specialized assets. Comparable spending benchmarks are difficult to establish due to the unique requirements of towing sensitive acoustic arrays for military purposes, which differ significantly from general cargo or commercial towing operations.

Small Business Impact

The contract was not set aside for small businesses, and the prime contractor, Hornbeck Offshore Operators LLC, is a large business. There is no explicit information provided regarding subcontracting plans or requirements for small business participation. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award announcements and public databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Surveillance Towed Array Sensor System (SURTASS-E)
Naval Intelligence Programs
Maritime Domain Awareness Initiatives
Deep Sea Operations Support
Fleet Support Services

Risk Flags

Long-term contract duration may increase exposure to changing operational needs or technological obsolescence.
Specialized nature of service could limit contractor pool and potentially impact future competition.
Dependence on a single vessel/crew for critical surveillance support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.5 million to HORNBECK OFFSHORE OPERATORS LLC. N103B / PM2 / J. DASSOW / TIME CHARTER TO TOW AN ACOUSTIC ARRAY FOR SURVEILLANCE TOWED ARRAY SENSOR SYSTEM (SURTASS)-E 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 $43.5 million.

What is the period of performance?

Start: 2023-02-23. End: 2026-05-21.

What is the track record of Hornbeck Offshore Operators LLC in performing similar maritime support contracts for the Department of Defense?

Hornbeck Offshore Operators LLC has a significant track record in providing offshore marine services, including vessel charter and support for various industries, including oil and gas and government contracts. While specific details on towing acoustic arrays for surveillance systems are not publicly detailed, their experience with deep-sea operations, vessel management, and operating in challenging maritime environments suggests a capability to perform this contract. The company operates a fleet of offshore support vessels, indicating capacity and operational expertise. Past performance reviews and contract histories with the DoD would provide a more granular assessment of their suitability for this specific, specialized task.

How does the awarded value of $43.5 million compare to similar contracts for specialized maritime towing services?

Direct comparisons for towing acoustic arrays for military surveillance systems are difficult due to the highly specialized nature of the service and the limited number of potential providers. General maritime towing contracts, such as those for harbor tugs or commercial cargo towing, are not directly comparable in terms of complexity, equipment, and operational requirements. The value of $43.5 million over approximately three years reflects the unique capabilities, specialized vessels, and operational demands associated with supporting a sensitive intelligence-gathering system like SURTASS-E. Without access to proprietary data on similar niche military contracts, a precise benchmark is elusive, but the value appears commensurate with specialized, long-term government support services.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include operational challenges in diverse maritime environments, potential equipment malfunctions, and the long duration of the contract which could lead to unforeseen issues. Mitigation strategies are embedded within the contract structure. The firm-fixed-price (FFP) nature of the contract shifts some financial risk to the contractor, incentivizing efficient operations. The requirement for full and open competition suggests the selection of a capable and experienced provider, reducing performance risk. Furthermore, the Navy likely has contingency plans and oversight mechanisms in place to address potential disruptions and ensure mission continuity. The contractor's experience in offshore operations also serves as a risk mitigation factor.

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

The firm-fixed-price (FFP) contract type is generally considered effective for services where the scope of work is well-defined and risks can be reasonably anticipated, such as towing operations. For this contract, FFP provides cost certainty to the government, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage costs efficiently and perform the service within the agreed-upon price. While it may lead to a higher initial price compared to cost-reimbursement contracts, it minimizes the risk of unexpected cost increases for the government, thereby enhancing value for money by providing predictability and accountability.

What are the historical spending patterns for SURTASS-E vessel support or similar acoustic array towing services?

Historical spending data for specific components like the SURTASS-E vessel support or acoustic array towing services is often classified or not readily available in public databases due to the sensitive nature of intelligence-gathering assets. However, general trends in naval support services indicate consistent investment in maintaining and operating surveillance platforms. Spending in this area is driven by national security requirements and the need for continuous intelligence collection. The recurring nature of such contracts suggests a stable, long-term requirement for these services, with spending levels influenced by operational tempo, technological upgrades, and geopolitical factors.

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: N3220522R4069

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 103 NORTHPARK BLVD, 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: $72,095,365

Exercised Options: $43,475,042

Current Obligation: $43,475,042

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline