MARAD Awards $2.8M Task Order to Keystone Shipping for Cape Diamond FY25 Operations

Contract Overview

Contract Amount: $2,811,094 ($2.8M)

Contractor: Keystone Shipping Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2024-12-23

End Date: 2025-06-30

Contract Duration: 189 days

Daily Burn Rate: $14.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: KEY-DIA25-2002A THE PURPOSE OF THIS TASK ORDER IS TO PROVIDE FOR THE ACTIVATION OF THE CAPE DIAMOND FY25 OPERATIONS IN ACCORDANCE WITH THE MARAD APPROVED SHIP MANAGERS ACTIVATION PLAN.

Place of Performance

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

State: South Carolina Government Spending

Plain-Language Summary

Department of Transportation obligated $2.8 million to KEYSTONE SHIPPING SERVICES, INC. for work described as: KEY-DIA25-2002A THE PURPOSE OF THIS TASK ORDER IS TO PROVIDE FOR THE ACTIVATION OF THE CAPE DIAMOND FY25 OPERATIONS IN ACCORDANCE WITH THE MARAD APPROVED SHIP MANAGERS ACTIVATION PLAN. Key points: 1. This task order focuses on activating Cape Diamond's FY25 operations, a specific but crucial aspect of maritime readiness. 2. Competition was not pursued, raising questions about potential cost savings and market-driven pricing. 3. The firm fixed-price contract type offers some cost certainty, but the lack of competition limits price discovery. 4. The Maritime Administration (MARAD) is the contracting agency, operating within the broader Department of Transportation.

Value Assessment

Rating: questionable

The contract is a firm fixed price, which is generally good for cost control. However, without competition, it's difficult to assess if the $2.81 million price is reasonable compared to market rates for similar activation services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach bypasses the competitive bidding process, potentially leading to higher costs and limiting opportunities for other qualified vendors.

Taxpayer Impact: Without competitive bidding, taxpayers may not be receiving the best possible value for this service, as the price is not validated against market alternatives.

Public Impact

Ensures the operational readiness of a specific maritime asset (Cape Diamond). Supports the Department of Transportation's mission in managing and activating vessels. Lack of transparency in the procurement process could erode public trust. Limited visibility into the specific services provided for the $2.81 million.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment due to sole-source award
Limited public information on service details

Positive Signals

Firm fixed-price contract provides cost certainty
Supports critical maritime operations

Sector Analysis

This award falls under the Deep Sea Freight Transportation sector, specifically related to vessel activation and operations. Benchmarks for such specialized activation services are not readily available, making direct comparison difficult.

Small Business Impact

The awardee, Keystone Shipping Services, Inc., is not identified as a small business. The contract does not appear to have specific set-asides for small business participation.

Oversight & Accountability

The lack of competition warrants closer oversight to ensure the necessity and reasonableness of the cost. Further details on the justification for a sole-source award would be beneficial for accountability.

Related Government Programs

Deep Sea Freight Transportation
Department of Transportation Contracting
Maritime Administration Programs

Risk Flags

Sole-source award
Lack of justification for sole-source
No small business participation noted
Limited transparency on service details
Potential for cost inefficiency

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $2.8 million to KEYSTONE SHIPPING SERVICES, INC.. KEY-DIA25-2002A THE PURPOSE OF THIS TASK ORDER IS TO PROVIDE FOR THE ACTIVATION OF THE CAPE DIAMOND FY25 OPERATIONS IN ACCORDANCE WITH THE MARAD APPROVED SHIP MANAGERS ACTIVATION PLAN.

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 $2.8 million.

What is the period of performance?

Start: 2024-12-23. End: 2025-06-30.

What specific services are included in the 'activation' of Cape Diamond FY25 operations, and how was the $2.81 million cost determined without competitive bidding?

The provided data does not detail the specific services encompassed by the 'activation' of Cape Diamond FY25 operations. The cost of $2.81 million was determined without competitive bidding, suggesting a sole-source justification was applied. Further documentation from MARAD would be required to understand the cost breakdown and the rationale behind bypassing the competitive process.

What are the risks associated with awarding a nearly $3 million contract on a sole-source basis for maritime operations activation?

The primary risk is the potential for inflated costs due to the absence of competitive pressure, meaning taxpayers may overpay. There's also a risk of reduced innovation and service quality as the contractor faces no market-based incentive to improve. Furthermore, it limits opportunities for other capable companies and can raise concerns about fairness and transparency in government contracting.

How does this sole-source award contribute to the overall effectiveness of the Maritime Administration's mission in ensuring fleet readiness?

While this award aims to ensure the operational readiness of a specific asset, its effectiveness is hampered by the lack of competition. The absence of a competitive process makes it difficult to ascertain if this is the most cost-effective or efficient method to achieve MARAD's broader mission goals. True effectiveness would be better demonstrated through competitive awards that validate value and performance.

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: $2,811,094

Exercised Options: $2,811,094

Current Obligation: $2,811,094

Actual Outlays: $2,802,547

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