DOT Awards $2.7M Fixed Fee Contract for Deep Sea Freight Transportation to Keystone Shipping Services

Contract Overview

Contract Amount: $2,737,168 ($2.7M)

Contractor: Keystone Shipping Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2025-08-18

End Date: 2035-07-26

Contract Duration: 3,629 days

Daily Burn Rate: $754/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: (KEY-DCS25-1002A) CAPE DECISION FY25 FIXED FEES PER DIEM

Place of Performance

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

State: South Carolina Government Spending

Plain-Language Summary

Department of Transportation obligated $2.7 million to KEYSTONE SHIPPING SERVICES, INC. for work described as: (KEY-DCS25-1002A) CAPE DECISION FY25 FIXED FEES PER DIEM Key points: 1. Contract awarded to Keystone Shipping Services, Inc. for deep sea freight transportation. 2. The contract has a fixed fee structure, indicating a defined scope of work. 3. Full and open competition was utilized, suggesting a competitive bidding process. 4. The contract duration is substantial, spanning over 10 years.

Value Assessment

Rating: fair

The contract is a fixed fee delivery order. Without specific performance metrics or comparison data for similar services, assessing the value is challenging. The fixed fee suggests cost certainty for the government, but the long duration could introduce risks if market conditions change.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically leads to better price discovery and potentially lower costs for the government. The use of a delivery order under a larger contract framework implies a competitive process for this specific award.

Taxpayer Impact: The use of full and open competition is generally positive for taxpayers, as it aims to secure the best value. However, the long-term nature of the contract warrants ongoing monitoring to ensure continued cost-effectiveness.

Public Impact

Ensures continued operation of vital deep sea freight transportation services for the Maritime Administration. Supports the movement of goods and potentially strategic resources via maritime routes. The long contract duration may impact flexibility in adapting to future transportation needs or technological advancements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) may not be optimal for a dynamic service like freight transportation.
Lack of specific performance metrics makes value assessment difficult.
Fixed fee structure could lead to contractor over-earning if costs are lower than anticipated.

Positive Signals

Awarded through full and open competition, promoting fairness and potential cost savings.
Fixed fee provides cost certainty for the government.
Contract supports essential government functions within the Department of Transportation.

Sector Analysis

This contract falls under the Deep Sea Freight Transportation sector, a critical component of national logistics and supply chains. Spending benchmarks for such long-term, fixed-fee transportation contracts can vary widely based on cargo type, routes, and service level agreements.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis would be needed to determine the extent of small business participation in this contract.

Oversight & Accountability

The long duration of the contract necessitates robust oversight from the Maritime Administration to ensure performance standards are met and that the fixed fee remains equitable throughout the contract term. Regular reviews are crucial for accountability.

Related Government Programs

Deep Sea Freight Transportation
Department of Transportation Contracting
Maritime Administration Programs

Risk Flags

Long contract duration
Fixed fee structure
Lack of detailed performance metrics
Potential for market volatility impacting cost-effectiveness over time

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $2.7 million to KEYSTONE SHIPPING SERVICES, INC.. (KEY-DCS25-1002A) CAPE DECISION FY25 FIXED FEES PER DIEM

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 $2.7 million.

What is the period of performance?

Start: 2025-08-18. End: 2035-07-26.

What is the benchmark cost for similar deep sea freight transportation services over a 10-year period?

Benchmarking deep sea freight transportation costs over a decade is complex due to fluctuating fuel prices, geopolitical factors, and varying cargo volumes. However, typical contracts might range from hundreds of thousands to millions annually, depending on the scale and nature of services. A fixed fee over such a long term requires careful initial assessment of market rates and risk factors to ensure it represents fair value.

What are the primary risks associated with a 10-year fixed-fee contract for freight transportation?

The primary risks include market volatility (fuel costs, demand fluctuations), technological obsolescence in shipping, and potential for contractor inefficiency or over-profitability if initial cost estimates were too high. The government also risks being locked into a potentially suboptimal arrangement if needs or market conditions change significantly over the decade.

How effectively does a fixed fee structure ensure value for money in long-term transportation contracts?

A fixed fee provides cost certainty but may not always ensure the best value for money over a long term. If the contractor's actual costs are significantly lower than anticipated, they may achieve excessive profits. Conversely, unforeseen cost increases could strain the contractor, potentially impacting service quality. Regular performance reviews and market checks are essential to mitigate these risks.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 BELMONT AVE STE 910, BALA CYNWYD, PA, 19004

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

Financial Breakdown

Contract Ceiling: $2,737,168

Exercised Options: $2,737,168

Current Obligation: $2,737,168

Actual Outlays: $1,645,429

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF725D000031

IDV Type: IDC

Timeline