Navy awards $39.5M for T-AGSE Vessel Operations & Maintenance, a sole-source contract

Contract Overview

Contract Amount: $39,480,930 ($39.5M)

Contractor: Hornbeck Offshore Operators LLC

Awarding Agency: Department of Defense

Start Date: 2025-03-01

End Date: 2025-09-30

Contract Duration: 213 days

Daily Burn Rate: $185.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OPERATION AND MAINTENANCE OF T-AGSE VESSELS.

Place of Performance

Location: COVINGTON, SAINT TAMMANY County, LOUISIANA, 70433

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $39.5 million to HORNBECK OFFSHORE OPERATORS LLC for work described as: OPERATION AND MAINTENANCE OF T-AGSE VESSELS. Key points: 1. Contract value of $39.5M for a 6-month period suggests a high operational cost per day. 2. Sole-source award indicates a lack of competitive bidding, potentially impacting price efficiency. 3. The contract duration of 213 days is relatively short for complex vessel operations and maintenance. 4. Fixed-price contract type aims to control costs, but the absence of competition limits price discovery. 5. The service is critical for maintaining naval readiness and logistical support capabilities. 6. Geographic focus on Louisiana (LA) aligns with potential homeporting or operational areas.

Value Assessment

Rating: fair

The contract value of $39.5 million for a 6-month period (213 days) translates to approximately $185,356 per day. Without comparable sole-source contracts for similar vessel operations and maintenance, it is difficult to definitively benchmark value. However, the daily rate appears substantial, and the lack of competition raises concerns about whether this represents the best possible price for taxpayers.

Cost Per Unit: Approximately $185,356 per day (based on total contract value and duration).

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple potential contractors. This approach is typically used when only one contractor possesses the necessary capabilities, unique qualifications, or when urgency dictates a rapid award. The absence of competition means that price discovery through market forces was not utilized, potentially leading to a higher cost than if multiple bids had been received.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without a competitive process, there is less assurance that the negotiated price reflects the lowest possible cost for these essential services.

Public Impact

The primary beneficiaries are the U.S. Navy, which receives essential operational and maintenance services for its T-AGSE vessels. These services ensure the readiness and availability of critical assets for national defense and logistical support. The contract's geographic impact is centered in Louisiana (LA), suggesting potential operational bases or maintenance facilities in the region. The contract supports specialized maritime labor, including engineers, technicians, and maritime crew, within the affected geographic area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
High daily operational cost warrants scrutiny to ensure efficiency and value.
Short contract duration may indicate a need for more stable, long-term planning or could be part of a larger strategy.

Positive Signals

Fixed-price contract type provides cost certainty for the government once awarded.
The contractor, Hornbeck Offshore Operators LLC, likely possesses specialized expertise required for T-AGSE vessel operations.
The contract directly supports critical naval operations and readiness.

Sector Analysis

The maritime services sector, particularly supporting defense logistics, is characterized by specialized assets and operational requirements. Contracts for vessel operation and maintenance are crucial for maintaining the readiness of naval fleets. While specific market size data for T-AGSE vessel operations is not readily available, the broader market for maritime support services to government entities is significant. This contract fits within the niche of specialized vessel support, often involving high barriers to entry due to regulatory, safety, and technical expertise requirements.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The nature of specialized vessel operations and maintenance often requires large, experienced contractors with significant capital and technical resources, which may limit the direct participation of small businesses in prime contract roles. However, opportunities may exist for small businesses to participate as subcontractors if the prime contractor opts to engage them for specific services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, requiring the contractor to deliver specified services. Transparency is limited by the sole-source nature of the award, as the justification for not competing is not publicly detailed. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Military Sealift Command Vessel Operations
Naval Fleet Support Services
Maritime Transportation Services
Defense Logistics Agency Contracts

Risk Flags

Sole-source award
High daily operational cost
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.5 million to HORNBECK OFFSHORE OPERATORS LLC. OPERATION AND MAINTENANCE OF T-AGSE VESSELS.

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 $39.5 million.

What is the period of performance?

Start: 2025-03-01. End: 2025-09-30.

What is the track record of Hornbeck Offshore Operators LLC in performing similar vessel operation and maintenance contracts for the U.S. Navy or other government agencies?

Hornbeck Offshore Operators LLC has a history of providing offshore support vessels and services, including to government entities. Their experience often involves complex offshore operations, supply chain management, and vessel maintenance. While specific details on past performance for T-AGSE vessels require deeper investigation into contract databases and performance reviews, the company's established presence in the offshore services industry suggests a baseline capability. A thorough review would examine past contract values, durations, any reported issues or successes, and client feedback to fully assess their track record for this specific type of service.

How does the daily operational cost of $185,356 compare to similar T-AGSE vessel operations or comparable government maritime contracts?

Benchmarking the daily operational cost of approximately $185,356 for T-AGSE vessel operations is challenging without access to specific, comparable contract data. Sole-source awards inherently lack direct competitive benchmarks. However, this daily rate is substantial and warrants scrutiny. For context, daily charter rates for various types of offshore support vessels can range significantly based on size, capability, and market conditions. Government contracts for similar services, especially those involving specialized military support vessels, often command premium pricing due to stringent requirements, readiness obligations, and security protocols. A detailed comparison would require analyzing contracts for similar vessel classes (e.g., other auxiliary general, special equipment vessels) awarded competitively or sole-source, considering factors like vessel age, maintenance schedules, crewing, and operational scope.

What is the justification for awarding this contract on a sole-source basis, and what are the potential risks associated with this procurement approach?

The justification for a sole-source award typically stems from situations where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, urgent and compelling needs, or the specialized nature of the T-AGSE vessels themselves, potentially requiring specific expertise or equipment only held by Hornbeck Offshore Operators LLC. The primary risk associated with sole-source procurement is the lack of price competition, which can lead to inflated costs for the government and taxpayers. Other risks include potential complacency from the contractor, reduced incentive for innovation, and a lack of market transparency. Without a competitive process, the government has less assurance that it is achieving the best possible value and may be exposed to higher prices than if multiple bids were solicited.

What are the specific services included under 'OPERATION AND MAINTENANCE OF T-AGSE VESSELS', and how is performance measured?

The term 'OPERATION AND MAINTENANCE OF T-AGSE VESSELS' broadly encompasses the day-to-day running of the vessels, including crewing, navigation, fuel management, and ensuring operational readiness. Maintenance includes routine servicing, repairs, inspections, and adherence to safety and regulatory standards. Performance measurement would likely be tied to specific deliverables outlined in the contract's Statement of Work (SOW). Key Performance Indicators (KPIs) could include vessel availability rates, response times for maintenance requests, adherence to safety protocols, successful completion of operational missions, and compliance with environmental regulations. The contract's fixed-price nature implies that the contractor is responsible for delivering these services within the agreed budget, with performance metrics serving as the basis for acceptance and payment.

What has been the historical spending pattern for T-AGSE vessel operations and maintenance, and how does this $39.5M award fit within that trend?

Analyzing historical spending for T-AGSE vessel operations and maintenance requires access to historical contract data. Without specific historical figures, it's difficult to place this $39.5 million award in context. However, if T-AGSE vessels are critical assets, spending on their operation and maintenance would likely be a recurring and significant budget item for the Department of the Navy. Trends could be influenced by the number of vessels in the fleet, their age and maintenance requirements, operational tempo, and the contracting strategy employed (competitive vs. sole-source). A significant increase or decrease compared to previous periods could indicate changes in fleet status, operational needs, or procurement approaches. Understanding past spending patterns is crucial for assessing the reasonableness of the current award and for future budget planning.

Industry Classification

NAICS: Transportation and Warehousing › Deep Sea, Coastal, and Great Lakes Water Transportation › Coastal and Great Lakes Freight Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $39,480,930

Exercised Options: $39,480,930

Current Obligation: $39,480,930

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline