Transportation contract for freight services awarded to Keystone Shipping Services, Inc. for over $3 million

Contract Overview

Contract Amount: $3,097,181 ($3.1M)

Contractor: Keystone Shipping Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2024-07-27

End Date: 2025-08-17

Contract Duration: 386 days

Daily Burn Rate: $8.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: CAPE RISE FY 24 FIXED FEES KEY-RIS24-1002 B BRIDGE FIXED FEES

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23707

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $3.1 million to KEYSTONE SHIPPING SERVICES, INC. for work described as: CAPE RISE FY 24 FIXED FEES KEY-RIS24-1002 B BRIDGE FIXED FEES Key points: 1. Contract awarded on a firm fixed-price basis, indicating clear cost expectations. 2. The contract duration is over a year, suggesting a need for sustained services. 3. Awarded as a delivery order under a larger contract, potentially indicating pre-negotiated terms. 4. The North American Industry Classification System (NAICS) code 483111 points to deep sea freight transportation. 5. The contract is not a small business set-aside, with no explicit subcontracting noted. 6. The contracting agency is the Maritime Administration within the Department of Transportation.

Value Assessment

Rating: fair

The total value of this delivery order is approximately $3.1 million. Without comparative data on similar deep sea freight transportation contracts or specific service details, a precise value-for-money assessment is challenging. The firm fixed-price structure provides cost certainty, but the absence of competition makes it difficult to benchmark pricing against market rates. Further analysis would require understanding the scope of services and comparing it to industry benchmarks for similar transportation needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source or limited competition procurement. This means that only one vendor, Keystone Shipping Services, Inc., was solicited or considered for this specific delivery order. The lack of competition limits the government's ability to explore alternative providers and potentially secure more favorable pricing or terms through a competitive bidding process.

Taxpayer Impact: The absence of competition means taxpayers may not be benefiting from the potentially lower prices that could arise from a competitive bidding environment. This could lead to higher overall costs for the government.

Public Impact

The primary beneficiaries are likely the entities requiring deep sea freight transportation services managed by the Maritime Administration. The contract facilitates the delivery of essential freight transportation services. The geographic impact is primarily related to the routes covered by deep sea freight transportation. Workforce implications may include employment opportunities within Keystone Shipping Services, Inc. and related logistics sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
Limited transparency into the justification for a sole-source award.
Absence of performance metrics or specific deliverables makes it difficult to assess service quality.
The contract's fixed-price nature, while providing cost certainty, might not incentivize efficiency if the price is not market-based.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The contract is a delivery order, suggesting it may be part of a larger, potentially established framework.
The duration of the contract (over a year) indicates a sustained need for the services provided.

Sector Analysis

The deep sea freight transportation sector is a critical component of global commerce, involving the movement of goods across oceans. This contract, under NAICS code 483111, falls within this vital industry. The Maritime Administration's role often involves ensuring the availability of shipping capacity for national security and economic purposes. Benchmarking this contract's value would require comparing its terms and pricing against other government or commercial contracts for similar long-haul freight services, considering factors like cargo type, volume, and route.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary contractor, Keystone Shipping Services, Inc., is likely a larger entity, and the contract does not appear to be structured to specifically benefit the small business ecosystem in this sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Maritime Administration's program management and the Department of Transportation's Inspector General. Accountability measures would be tied to the contract's terms and conditions, including delivery schedules and service requirements. Transparency is limited due to the sole-source nature of the award, with the justification for not competing the contract being a key area for scrutiny.

Related Government Programs

Department of Transportation - General Services
Maritime Administration - Operating Programs
Federal Supply Schedule - Transportation Services
Defense Logistics Agency - Transportation Services

Risk Flags

Sole-source award without clear justification
Potential for uncompetitive pricing
Lack of transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $3.1 million to KEYSTONE SHIPPING SERVICES, INC.. CAPE RISE FY 24 FIXED FEES KEY-RIS24-1002 B BRIDGE FIXED FEES

Who is the contractor on this award?

The obligated recipient is KEYSTONE SHIPPING SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Maritime Administration).

What is the total obligated amount?

The obligated amount is $3.1 million.

What is the period of performance?

Start: 2024-07-27. End: 2025-08-17.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED,' which signifies a sole-source or limited competition procurement. A detailed justification for this decision would typically be documented by the contracting agency, the Maritime Administration. Common reasons for sole-source awards include the existence of only one responsible source capable of providing the required services, urgent and compelling needs that preclude full and open competition, or specific national security requirements. Without access to the contract's justification documentation, the precise reason remains unknown. This lack of competition limits the government's ability to explore alternative vendors and potentially achieve better pricing or terms.

How does the firm fixed-price (FFP) structure impact risk allocation in this contract?

A Firm Fixed-Price (FFP) contract, like the one awarded to Keystone Shipping Services, Inc., places the majority of the cost risk on the contractor. This means that the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. If Keystone Shipping Services, Inc. incurs higher expenses than anticipated during the contract period, their profit margin will decrease. Conversely, if they manage their costs efficiently, their profit will increase. For the government, the primary benefit of an FFP contract is cost certainty; the total price is known upfront. However, this certainty comes at the potential cost of not benefiting from any cost savings the contractor might achieve, and if the initial price was not well-benchmarked due to lack of competition, the government might overpay.

What are the potential implications of this contract being a delivery order under a larger contract?

This contract is a delivery order, which implies it is a task or order issued under a previously awarded indefinite-delivery, indefinite-quantity (IDIQ) or other type of basic contract. This structure suggests that the foundational terms, conditions, and potentially pricing mechanisms were established during the initial award of the parent contract. The implications are that the competition, if any, for the parent contract may have occurred earlier. For this specific delivery order, the 'NOT COMPETED' status indicates that even within the framework of the parent contract, this particular order was not competed. This could be due to specific requirements of the order, urgency, or the nature of the services. It streamlines the process for issuing orders but can reduce price discovery for individual tasks if not managed carefully.

What is the typical market size and competitive landscape for deep sea freight transportation services?

The deep sea freight transportation market is a global, highly competitive industry dominated by large international shipping lines. Market size is substantial, measured in trillions of dollars annually for global trade. Competition is intense, driven by factors such as vessel capacity, route efficiency, service reliability, and pricing. However, for government contracts, especially those requiring specific capabilities or security clearances, the pool of eligible contractors can be smaller. The Maritime Administration often plays a role in ensuring the availability of U.S.-flagged vessels or specific types of shipping capacity, which can influence the competitive landscape for their procurements. The 'NOT COMPETED' status here suggests that for this particular requirement, Keystone Shipping Services, Inc. was deemed the sole or most appropriate provider.

Are there any historical spending patterns with Keystone Shipping Services, Inc. by the Maritime Administration or Department of Transportation?

To assess historical spending patterns with Keystone Shipping Services, Inc., a review of federal procurement databases (such as USASpending.gov or FPDS) would be necessary. This would involve searching for all contracts awarded to this specific entity by the Maritime Administration and the Department of Transportation. Analyzing past awards would reveal the frequency, value, and types of services previously procured from this contractor. Understanding their track record, including performance history and any issues encountered on prior contracts, is crucial for evaluating the current award's risk and value. Without this historical data, it's difficult to determine if this $3.1 million contract represents a significant increase or continuation of established business.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 BALA PLZ STE 600, BALA CYNWYD, PA, 19004

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,097,181

Exercised Options: $3,097,181

Current Obligation: $3,097,181

Actual Outlays: $3,097,181

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF724D000010

IDV Type: IDC

Timeline