HOS sells four OSVs to MSC

FEBRUARY 25, 2015 — In its fourth quarter report released earlier this month, Hornbeck Offshore Services, Inc. (NYSE:HOS) reported that it had recently agreed to sell four of its 250EDF class OSVs currently chartered to the U.S. Navy and to subsequently operate them for the Navy under an operations and maintenance ("O&M") contract for up to 10-years operating period.  

Since their construction in 2008 and 2009, these vessels have supported the U.S. Navy's submarine fleet on the east and west coast of the U.S.  In order for the Navy to continue receiving the unique capabilities of these vessels, Congress has required their purchase from the company, provided an agreement could be reached.  Today, the Department of Defense announced the award of the relevant contracts, which potentially extend the deal to cover a fifth HOS vessel.

Following are the details:

Hornbeck Offshore Services LLC, Covington, LA, is being awarded an $114,000,000 firm-fixed-price contract for the purchase of three blocking vessels.  This contract includes an option for the purchase of a fourth blocking vessel, which, if exercised, would bring the cumulative value of this contract to $152,000,000.  Work will be performed primarily into and out of the ports of Kings Bay, Georgia and Bangor, Washington, and the work is expected to be completed Sept. 30, 2015.  If all options are exercised, work will continue through Feb. 27, 2025.  Fiscal 2015 other procurement (Navy) funds in the amount of $114,000,000 are being obligated at the time of award, and will expire at the end of the current fiscal year.  This contract was awarded under other than full and open basis in accordance with 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 - only one responsible source and no other supplies or services will satisfy agency requirements.   The Navy’s Military Sealift Command, Washington, District of Columbia, is the contracting activity (N62387-15-C-2502).

Hornbeck Offshore Operators LLC, Covington, LA, is being awarded an $18,106,860 firm-fixed-price contract for the operation and maintenance of three blocking vessels and the charter of a fourth blocking vessel.  This contract includes nine 12-month option periods and one 150-day option period, which, if exercised, would bring the cumulative value of this contract to $346,795,380.  Work will be performed at sea worldwide and is expected to be completed September 2015.  If all options are exercised, work will continue through Feb. 27, 2025.  Fiscal 2015 working capital funds in the amount of $18,106,860 are obligated for fiscal 2015, and will not expire at the end of the fiscal year.  This contract was awarded under other than full and open basis in accordance with 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 - only one responsible source and no other supplies or services will satisfy agency requirements.  The Navy’s Military Sealift Command, Washington, District of Columbia, is the contracting activity (N62387-15-C-2507).

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