Transportation contract for mission activation operations costs awarded to Keystone Shipping Services, Inc

Contract Overview

Contract Amount: $3,403,289 ($3.4M)

Contractor: Keystone Shipping Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2024-12-05

End Date: 2025-05-31

Contract Duration: 177 days

Daily Burn Rate: $19.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Transportation

Official Description: CAPE EDMONT MISSION ACTIVATION: POLAR EXPRESS - OPERATIONS COSTS KEY-EDM25-2002A THIS TASK ORDER IS ISSUED TO FUND OPERATIONS COSTS FOR MISSION ACTIVATION.

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29405

State: South Carolina Government Spending

Plain-Language Summary

Department of Transportation obligated $3.4 million to KEYSTONE SHIPPING SERVICES, INC. for work described as: CAPE EDMONT MISSION ACTIVATION: POLAR EXPRESS - OPERATIONS COSTS KEY-EDM25-2002A THIS TASK ORDER IS ISSUED TO FUND OPERATIONS COSTS FOR MISSION ACTIVATION. Key points: 1. This contract focuses on operational costs for mission activation, indicating a need for immediate support. 2. The award was not competed, raising questions about potential cost efficiencies and market-based pricing. 3. The duration of the task order is relatively short, suggesting a specific, time-bound operational need. 4. The contract type is 'Cost No Fee', which means the contractor is reimbursed for allowable costs but does not earn a profit fee. 5. The North American Industry Classification System (NAICS) code 483111 points to Deep Sea Freight Transportation services. 6. The contract is a delivery order, implying it is part of a larger, potentially pre-existing contract vehicle.

Value Assessment

Rating: questionable

The contract's value of $3.4 million for a 5-month period requires careful scrutiny, especially given the 'Cost No Fee' structure. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The absence of a profit fee suggests the focus is on cost recovery for essential services rather than incentivizing contractor performance beyond meeting operational requirements. Further analysis would be needed to determine if the reimbursed costs align with industry standards for deep sea freight transportation operations.

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 not competing the award are not detailed in the provided data. Sole-source awards can sometimes be justified for specialized services or urgent needs, but they limit the opportunity for price discovery through market competition. The lack of multiple bidders means the government did not benefit from a range of proposals and pricing strategies that typically emerge in a competitive environment.

Taxpayer Impact: Taxpayers may not be receiving the best possible value when contracts are not competed. The absence of competition can lead to higher costs than might be achieved through a bidding process, as there is less pressure on the contractor to offer competitive pricing.

Public Impact

The primary beneficiaries are likely the personnel and operations involved in the 'CAPE EDMONT MISSION ACTIVATION: POLAR EXPRESS'. The services delivered are operational costs essential for the activation and functioning of this specific mission. The geographic impact is tied to the operational area of the 'POLAR EXPRESS' mission, likely involving maritime routes. Workforce implications would primarily affect the employees of Keystone Shipping Services, Inc. involved in supporting this mission.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Cost-reimbursement structure without profit fee requires diligent oversight of allowable costs.
Urgency implied by 'mission activation' could potentially be exploited if not managed carefully.

Positive Signals

Awarded to a single contractor, potentially indicating specialized capabilities required for the mission.
Focus on operational costs suggests a direct need for service delivery.
Clear end date for the task order provides a defined period for these operational expenses.

Sector Analysis

The contract falls within the Deep Sea Freight Transportation sector, a critical component of the broader transportation and logistics industry. This sector is characterized by significant capital investment, complex regulatory environments, and global supply chain integration. Comparable spending benchmarks for operational costs in similar maritime missions would typically vary based on vessel size, operational duration, and specific mission requirements. The Maritime Administration (MARAD) often oversees contracts related to U.S. maritime interests, including sealift capabilities and operational readiness.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates the awardee is Keystone Shipping Services, Inc. There is no information provided regarding subcontracting plans or implications for the small business ecosystem. As a sole-source award, it is less likely to involve subcontracting opportunities specifically driven by set-aside requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation and the Maritime Administration. Given the 'Cost No Fee' structure, rigorous oversight of allowable costs is crucial to ensure taxpayer funds are used appropriately. Transparency regarding the justification for the sole-source award and detailed reporting of operational expenses would be key accountability measures. The Inspector General of the Department of Transportation would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Maritime Administration Operations
Deep Sea Freight Transportation Services
Mission Support Contracts
Cost Reimbursement Contracts
Delivery Orders

Risk Flags

Sole-source award lacks competitive pricing.
Cost-reimbursement structure requires diligent cost oversight.
Potential for cost overruns if not managed effectively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $3.4 million to KEYSTONE SHIPPING SERVICES, INC.. CAPE EDMONT MISSION ACTIVATION: POLAR EXPRESS - OPERATIONS COSTS KEY-EDM25-2002A THIS TASK ORDER IS ISSUED TO FUND OPERATIONS COSTS FOR MISSION ACTIVATION.

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 $3.4 million.

What is the period of performance?

Start: 2024-12-05. End: 2025-05-31.

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. A comprehensive analysis would require accessing federal procurement databases (like FPDS or SAM.gov) to review past awards, performance evaluations, and any history of contract disputes or issues. Understanding their experience with similar 'Cost No Fee' contracts and deep sea freight operations would be particularly relevant for assessing their capability and reliability in executing this mission activation task order.

How does the awarded amount compare to typical operational costs for similar maritime mission activations?

Benchmarking the $3.4 million awarded amount against similar maritime mission activations is challenging without more specific details about the 'CAPE EDMONT MISSION ACTIVATION: POLAR EXPRESS'. Factors influencing operational costs include the type and size of vessels, the duration and complexity of the mission, crew requirements, fuel, maintenance, and logistical support. Given this is a 'Cost No Fee' contract, the focus is on reimbursing incurred expenses. A comparative analysis would ideally involve examining other MARAD or DOT contracts for mission activation or deep sea freight operations of comparable scope and duration to ascertain if the costs are reasonable and reflect fair market value.

What are the specific risks associated with a 'Cost No Fee' contract for operational activation?

The primary risk with a 'Cost No Fee' contract is the potential for cost escalation if not properly managed and overseen. While the contractor does not earn a profit fee, they are reimbursed for allowable costs. This structure can reduce the contractor's incentive to control expenses rigorously, as their primary goal is cost recovery. Effective risk mitigation requires robust government oversight to scrutinize all claimed costs, ensure they are reasonable, allocable, and allowable according to contract terms and federal regulations. Without profit motive, the contractor's drive for efficiency might be lower compared to fixed-price or cost-plus-incentive-fee contracts.

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

The provided data states the contract was 'NOT COMPETED', indicating a sole-source award. The specific justification for this determination is not included. Common reasons for sole-source awards include situations where only one responsible source can provide the required supplies or services, or when there is a compelling urgency that precludes full and open competition. For this particular contract, the justification might relate to unique capabilities of Keystone Shipping Services, Inc., or a critical and immediate need for the 'CAPE EDMONT MISSION ACTIVATION: POLAR EXPRESS' that could not be met through a competitive process within the required timeframe.

What are the implications of the 177-day duration for the mission activation?

The 177-day duration (approximately 5.8 months) for this task order suggests a defined, relatively short-term operational phase for the 'CAPE EDMONT MISSION ACTIVATION: POLAR EXPRESS'. This timeframe indicates that the awarded funds are intended to cover the operational costs for this specific activation period. It implies that the mission's activation phase is planned and budgeted for this duration, and subsequent phases, if any, would likely require separate funding and contractual actions. The short duration also means that the government's financial exposure for this specific operational activation is capped within this period.

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: COST NO FEE (S)

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: $3,403,289

Exercised Options: $3,403,289

Current Obligation: $3,403,289

Actual Outlays: $3,381,232

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF724D000009

IDV Type: IDC

Timeline