Standardizing Port Visit Requirements in the Pacific

“In order to make assured conquests it is necessary always to proceed within the rules: to advance, to establish yourself solidly, to advance and establish yourself again, and always prepare to have within reach of your army your resources and your requirements.”

— Frederick the Great: Instructions for His Generals, ii, (1747)

 

Although Frederick the Great stated this in a different era, the points still ring true, especially in the era of sequestration, budget reductions and dwindling resources. 

 A structured approach of preparation and validating requirements perseveres to reach the goal.  Comparatively, the $180 million we spend annually to procure Husbanding support for our fleet units to non-Navy ports is small in light of other operational or new construction budget lines, but this expenditure represents a significant amount of Type Command (TYCOM) budgets, and must be spent wisely to ensure we maintain our resources and meet our requirements.  

The Husbanding Contract process.

The Husbanding Contract process.

 Government contracts require us to proceed within a defined set of rules, and changing requirements of our ships while in foreign locations affect the resources available to support the fleet.

 In today’s financial environment, we need to find new ways to reduce costs and further standardize our rule sets.  Every Fleet has unique challenges for port visits.  2nd and 3rd Fleets use different contracting rules than other fleets due to covering the United States.  4th Fleet and Navy Africa have remote locations with a growing number of visits generally supporting smaller ships.  5th Fleet has the highest number of visits, but to a relatively small number of ports.  6th Fleet competes with a busy and highly competitive market with many different ports.  The 7th Fleet Area of Responsibility (AOR) covers nearly a third of the earth’s ocean surface area, and has long been a challenging location for port visits for several reasons.

 In fiscal year 2012, the U.S. Navy spent nearly $60 million supporting 368 port visits to non-Navy ports in 64 different locations throughout 7th Fleet.  These included 22 large deck visits and exercise support including Pacific Partnership, Cooperation Afloat Readiness and Training (CARAT), Cobra Gold and Balikatan.  Many of these Theater Security Cooperation (TSC) engagements require visits to remote locations with limited infrastructure.  Many of the ports require anchorage for most ships due to draft restrictions.  This increases support challenges for potable water barges; collection, holding and transfer (CHT) /sewage removal barges; tugs with sufficient horsepower to move a large ship; and other support equipment items we require for security of Navy ships while in port or at anchorage.

 Given the tyranny of distance in 7th Fleet, extreme variance of classes of ships operating in the area, infrequency of visits to many remote locations, limited availability of support assets and the long distance to mobilize services, ensuring the contract has the right items captured in the requirements is critical.  For example, if we want to have a CHT barge available for port visits in the Solomon Islands, having the requirement identified and competed in the solicitation ensures we receive pricing at a fixed price awarded to the overall best value contractor.  However, under a firm fixed priced (FFP) contract, we can’t reasonably expect contractors to fix price everything we might want in every location throughout the Pacific and Indian Oceans. 

 This leads to standardizing the requirements.  We want to have competitively awarded prices for the services needed in the majority of places we expect to send ships.  However, the challenge to obtain competitively awarded prices is that we must first know what we want to obtain the competition and priced items.  We must understand our requirements and be consistent. 

 Very recently, the Navy’s husbanding contracts differed greatly depending where the contract was solicited and awarded.  We had various types of contracts to include requirements contracts, indefinite delivery/indefinite quantity contracts, single port contracts, large regions, differing procurement processes, different evaluation criteria, very different individual line items, and on and on.  Also, we had very limited data of what ships ordered in some fleets, and the data throughout was not readily comparable to other fleets.  Only two of five contracting offices had detailed historical data of actual services ordered and received, but the two databases were differently formatted and held conflicting data.  All Navy contracting offices had significant problems awarding and executing new husbanding contracts due to protests by vendors.

.  LogSSR screen shots include personal key infrastructure (PKI) access for government employees, ability to view actual contract documents (pricing, performance work statements) and fleet summaries of port visit information.

. LogSSR screen shots include personal key infrastructure (PKI) access for government employees, ability to view actual contract documents (pricing, performance work statements) and fleet summaries of port visit information.

 In 2009, Naval Supply Systems Command (NAVSUP) Headquarters began a worldwide effort to standardize husbanding contracts and achieve execution on new contracts by applying lessons learned from past protests.  NAVSUP began with standardizing the Contract Structure Process, the Source Selection Process, the Contract Management Process and the Reporting Process.  NAVSUP developed Logistics Support Services Repository (LogSSR), a new database to capture standard data globally under all husbanding contracts and in 2010 released the new website capturing data from all husbanding contracts.  You can register and find all current husbanding contracts, training information and historical port visit data at www.navsup.navy.mil/logssr.

 At about this same time, Fleet & Industrial Supply Center (FISC) Yokosuka, now named NAVSUP Fleet Logistics Center (FLC) Yokosuka, began the solicitation process for regional contracts covering 7th Fleet.  With the solicitation for four regions in the Pacific and Indian Ocean, all the FISC (now named FLC) husbanding contracting offices, COMFISCS (currently named NAVSUP Global Logistics Support) and NAVSUP Headquarters mitigated changes and standards in the Contract Structure Process, the Source Selection Process and the Contract Management Process.  The standards helped award and achieve execution in four contracts under NAVSUP FLC Yokosuka and eight contracts under NAVSUP FLC Norfolk by successfully defending against vendor protests.

 With successes in the contracting process, Commander, Pacific Fleet (CPF); Commander, 7th Fleet (C7F); Commander, Naval Surface Force Pacific (CNSP); Commander, Submarine Group Seven (CSG7); NAVSUP FLC Yokosuka and its site NAVSUP FLC Singapore have engaged in the effort to standardize the last two elements of the contracting process – Requirements Determination, and Ordering. 

 CPF stood up a weekly meeting with all stakeholders to reign in the most expensive region for port visit costs – the Pacific.  During the past year, coordination from each of the commands addresses individual ship visits of interest every week.  One major weakness highlighted has been the inconsistent ordering of line items by ship Logistics Requirement (LOGREQ) messages, which constitute the ordering mechanism to the husbanding contract for port visits.  LOGREQ language from ships of the same class, even the same ship for different port visits, varies significantly from one port visit to the next – one ship to the next.  Without standard ordering, there are no standard requirements and items competed on the husbanding contract do not capture the needs of the fleet.  Without standard requirements, any Husbanding contract awarded and executed does not obtain the most competitive pricing available to support the ships.

 Some examples of differing LOGREQs include an aircraft carrier requesting differently sized breasting or landing barges.  If the requirements are not captured in the performance work statement of the contract, these no longer adhere to the competed pricing of the contract. 

 In one port, the number of cell phones ordered from one Destroyer may be five, while the next similar ship could be 20.  In one port, a ship makes potable water while at anchorage while another ship orders a water barge that (unknowingly) must be mobilized from another country at a high cost.  Some ships order small water taxis for maneuverability and ease of bringing alongside, while others order large vessels to carry many Sailors at once.  Without defining standards for LOGREQs, and ultimately the contract, we do not obtain the right mix of services at a competitive price to support the ships at nearly 70 differing ports each year throughout the Pacific and Indian Oceans.

 NAVSUP FLC Singapore developed the first set of standardized LOGREQ messages based on historical information and dozens of ship visits at challenging locations.  The TYCOMs and fleets are reviewing these standardized LOGREQ’s to set a baseline expectation for what support services ships are expected to order, whether pierside or at anchorage.  These standards will be used to develop a better performance work statement for the next round of solicitations, and provide recommended changes to the NAVSUP standard husbanding contract.

Worldwide regional husbanding contracts began standardization in 2010 and most Fleets have awarded standardized support.

Worldwide regional husbanding contracts began standardization in 2010 and most Fleets have awarded standardized support.

 Husbanding is a peculiar type of contract.  In the commercial industry, companies utilize husbanding “agents” that have the authority to commit and expend funds for the entity.  The U.S. Navy cannot have a non-government employee with no contracting authority “commit” the government, thus Husbanding Contractors for the U.S. Navy are termed “Husbanding Services Contractors” (HSC) vice Husbanding Agents (HA).  Commercial ships tend to go to the same locations and set up long-term agreements to achieve savings – the U.S. Navy is mission driven on where we go.  Commercial ship agents work to set up services required as a precursor to the location to visit (e.g., water taxis, water, power, etc), where the Navy designs and operates ships as the most effective and capable platform making deployed logistics support secondary as one would expect. 

 We ask the contractors to bear the burden of risk to firm fix price services through scores of locations, many very remote without assets to support Navy ships.  We must have standards to provide better ship support for a more cost effective approach. 

 As Frederick the Great instructed centuries ago, we must proceed within the rules and prepare to have within reach our resources and requirements.  If we achieve better standards for our visits in non-Navy ports, we can better meet the operational needs of the Fleet even during our government’s challenging times.