Transportation contract for freight services awarded to Keystone Shipping Services, Inc. for over $3.49M

Contract Overview

Contract Amount: $3,490,647 ($3.5M)

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: $9.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: CAPE RACE FY 24 FIXED FEES KEY-RAC24-1002 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 $3.5 million to KEYSTONE SHIPPING SERVICES, INC. for work described as: CAPE RACE FY 24 FIXED FEES KEY-RAC24-1002 B BRIDGE FIXED FEES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Fixed-fee pricing structure provides cost certainty but may not incentivize efficiency. 3. Duration of 386 days suggests a medium-term operational need. 4. No small business set-aside indicates potential for large prime contractor benefits. 5. Contract falls under the Deep Sea Freight Transportation NAICS code. 6. Virginia is the state associated with this contract.

Value Assessment

Rating: fair

The contract's fixed fee structure provides a clear cost to the government, but without competitive bidding, it's difficult to benchmark the value for money. The total award amount of $3.49 million for a 386-day period suggests a significant operational cost. Without comparable sole-source contracts or market data for similar deep-sea freight services, a precise value assessment is challenging. The absence of competition raises concerns about whether the government secured the most cost-effective solution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The specific reasons for the sole-source designation are not provided in the data. A lack of competition means that potential alternative providers were not considered, which can lead to higher prices and reduced innovation. The government did not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government's ability to negotiate favorable terms is diminished in sole-source situations.

Public Impact

Benefits the Department of Transportation by ensuring critical deep-sea freight transportation services. Supports the movement of goods essential for national logistics and supply chains. Geographic impact is primarily related to maritime routes and potentially port operations in Virginia. Workforce implications may include employment for maritime crews and shore-based logistics personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits opportunities for other qualified vendors.
Lack of competition may result in suboptimal pricing for taxpayers.
Fixed-fee structure might not incentivize cost-saving efficiencies by the contractor.

Positive Signals

Ensures continuity of essential deep-sea freight transportation services.
Fixed fee provides budget certainty for the contracting agency.
Contract duration aligns with a defined operational period.

Sector Analysis

The Deep Sea Freight Transportation sector involves the movement of goods via large vessels across oceans. This contract, under NAICS code 483111, fits within this critical infrastructure segment. The global shipping market is characterized by significant capital investment, complex logistics, and fluctuating demand. Comparable spending benchmarks are difficult to establish without more specific service details, but large-scale freight contracts can run into millions of dollars annually.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor does it appear to involve significant subcontracting opportunities for small businesses based on the available information. The prime contractor, Keystone Shipping Services, Inc., is likely a large entity. This means the direct economic benefits to the small business ecosystem from this specific award are likely minimal, though the services provided may indirectly support other businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Transportation's internal review processes and the Maritime Administration's program management. Accountability measures are usually tied to the performance standards outlined in the contract's statement of work and the fixed-fee payment structure. Transparency is limited due to the sole-source nature of the award; however, contract award data is publicly available through federal procurement databases.

Related Government Programs

Department of Transportation - General Operations
Maritime Administration - Vessel Operations
Deep Sea Freight Services
Federal Freight and Shipping Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for above-market pricing
Limited transparency on selection criteria

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $3.5 million to KEYSTONE SHIPPING SERVICES, INC.. CAPE RACE FY 24 FIXED FEES KEY-RAC24-1002 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 $3.5 million.

What is the period of performance?

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

What is the track record of Keystone Shipping Services, Inc. with federal contracts, particularly with the Department of Transportation?

Information regarding Keystone Shipping Services, Inc.'s specific track record with federal contracts, especially with the Department of Transportation, is not detailed in the provided data snippet. A comprehensive analysis would require querying federal procurement databases (like SAM.gov or FPDS) for their contract history, including past performance ratings, any disputes or terminations, and the types and values of previous awards. Understanding their experience with similar deep-sea freight operations and their performance on fixed-price contracts would be crucial for assessing their reliability and capability for this specific award.

How does the $3.49 million fixed fee for 386 days compare to market rates for similar deep-sea freight transportation services?

Benchmarking the $3.49 million fixed fee against market rates for similar deep-sea freight transportation services is challenging without more specific details about the scope of work, vessel types, routes, and cargo handled. The data indicates a sole-source award, which inherently limits direct price comparisons. To perform a robust comparison, one would need to analyze recent contracts awarded through full and open competition for comparable services, or consult industry reports and freight rate indices. The absence of competition suggests the government may not have achieved the most favorable pricing available in the market.

What are the specific risks associated with a sole-source award for critical transportation services?

Sole-source awards for critical transportation services carry several risks. Primarily, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most cost-effective solution. It also reduces the government's leverage in negotiations and limits the opportunity to explore innovative or more efficient service providers. Furthermore, reliance on a single contractor, especially for critical infrastructure, can create vulnerabilities if that contractor experiences performance issues, financial instability, or faces unforeseen operational disruptions. Ensuring robust oversight and clear performance metrics becomes even more vital in such scenarios.

What is the expected effectiveness of this contract in ensuring the continuity of deep-sea freight transportation?

The effectiveness of this contract in ensuring the continuity of deep-sea freight transportation hinges on the contractor's performance and the clarity of the contract's requirements. As a fixed-fee contract, it provides budget certainty for the Maritime Administration. The 386-day duration suggests a defined operational period, aiming to meet specific logistical needs. However, effectiveness is ultimately measured by the reliable and timely delivery of freight services as per the contract's statement of work. Without details on performance metrics and historical performance, a definitive assessment of effectiveness is premature, but the award aims to secure necessary services.

How does historical spending on deep-sea freight transportation by the Maritime Administration compare to this award?

Analyzing historical spending patterns for deep-sea freight transportation by the Maritime Administration would provide context for this $3.49 million award. This requires accessing historical procurement data to identify trends in contract values, types of services procured, and the number of competitive versus sole-source awards over previous fiscal years. Understanding whether this award represents an increase or decrease in spending, or a shift in procurement strategy (e.g., more sole-source awards), would offer insights into the agency's resource allocation and contracting practices within this sector.

What are the potential implications of the fixed-fee structure on contractor performance and cost control?

A fixed-fee contract structure, like the one used here, establishes a firm price for the work to be performed. This provides the government with cost certainty, meaning the total payment will not exceed the agreed-upon amount, barring any contract modifications. For the contractor, it offers the potential for higher profit margins if they can deliver the services efficiently and below the estimated costs. However, it may also reduce the incentive for the contractor to seek out cost-saving measures beyond what is necessary to meet the contract's minimum requirements, as they bear the risk of cost overruns. Effective oversight is crucial to ensure quality and performance are not compromised.

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: $3,490,647

Exercised Options: $3,490,647

Current Obligation: $3,490,647

Actual Outlays: $3,490,647

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