Husbanding Service Providers: Single Award vs. Multiple Award Contracts

Abstract

In 2016, the U.S. Navy transitioned from Single Award (SAC) to Multiple-Award (MAC) Indefinite-Delivery–Indefinite-Quantity (IDIQ) husbanding service contracts. Recent port services pricing data suggests that some services or ports may cost more under a MAC compared to SAC. The objective of this study is to identify whether there is a statistically significant difference in price for U.S. Navy husbanding port services and estimate the relationship of price between these two competitive husbanding service provider (HSP) contracting strategies. A price comparison between both contract types was performed using three fixed-effects regression models. The results show a statistically significant difference in price between SAC and MAC. The model estimated that for a given port and given ship type, the average price for HSP services was less for a MAC compared to SAC. Additionally, the MAC had an effect on price changes based on the port and service category. However, the effect of contract strategy on price could be marginally under- or overstated based on the unmeasurable effects of nonmonetary qualitative factors. Further research will be required to understand the true cost–benefit of MACs and the overall best value to the government.