DOT awards $2.4M fixed-fee contract for deep sea freight, highlighting potential value in specialized transport

Contract Overview

Contract Amount: $2,418,190 ($2.4M)

Contractor: Keystone Shipping Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2025-08-18

End Date: 2026-07-26

Contract Duration: 342 days

Daily Burn Rate: $7.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: (KEY-DMG25-1002A) CAPE DOMINGO FY25 FIXED FEES

Place of Performance

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

State: South Carolina Government Spending

Plain-Language Summary

Department of Transportation obligated $2.4 million to KEYSTONE SHIPPING SERVICES, INC. for work described as: (KEY-DMG25-1002A) CAPE DOMINGO FY25 FIXED FEES Key points: 1. Contract value appears reasonable for specialized deep sea freight services. 2. Full and open competition suggests a healthy market for these services. 3. Fixed-fee structure provides cost certainty but may limit contractor incentive for efficiency. 4. Contract duration of 342 days is standard for this type of service. 5. Geographic focus on South Carolina indicates regional operational needs. 6. The contract falls within the scope of deep sea freight transportation.

Value Assessment

Rating: good

The fixed fee of approximately $2.4 million for a 342-day contract for deep sea freight transportation is within a reasonable range for specialized services. Benchmarking against similar contracts is challenging without more specific details on the cargo, routes, and service level agreements. However, the fixed-fee nature, while providing cost certainty, might not incentivize the contractor to find the most cost-effective solutions compared to performance-based contracts. The award amount appears to be a fair reflection of the expected service delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely participated. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing. The specific number of bidders is not provided, but the method of award suggests a robust bidding process was available.

Taxpayer Impact: Full and open competition typically leads to better value for taxpayers by driving down prices through market forces and encouraging a wider pool of qualified contractors.

Public Impact

The primary beneficiaries are likely entities requiring specialized deep sea freight transportation, potentially for government-related cargo or logistical support. Services delivered include the operation and management of deep sea freight transport. The geographic impact is centered around South Carolina, suggesting port operations or regional logistics. Workforce implications may include employment for maritime professionals, logistics personnel, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Fixed-fee structure may reduce incentive for cost savings.
Lack of specific performance metrics makes it difficult to assess efficiency gains.
Limited detail on cargo type and route complexity hinders deeper value analysis.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Fixed fee provides budget certainty for the agency.
Contract duration aligns with typical service delivery timelines.
Clear identification of service type (Deep Sea Freight Transportation).

Sector Analysis

The deep sea freight transportation sector is a critical component of global commerce and national logistics. This contract fits within the broader transportation and logistics industry, which is characterized by significant capital investment, complex regulatory environments, and global reach. Comparable spending benchmarks are difficult to establish without more specific details on the nature of the freight and routes, but the overall market for maritime shipping services is substantial.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, Keystone Shipping Services, Inc., is likely a larger entity capable of fulfilling the contract requirements independently. The impact on the small business ecosystem is minimal for this specific award, as it does not appear to include provisions for small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Maritime Administration (MARAD) within the Department of Transportation. Accountability measures are inherent in the fixed-fee contract structure, requiring the contractor to deliver the specified services. Transparency is generally maintained through contract award databases, though specific performance monitoring details are not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Maritime Shipping Services
Department of Transportation Contracts
Deep Sea Freight Operations
Federal Logistics Support

Risk Flags

Fixed-fee contract may limit cost-saving incentives.
Lack of detailed performance metrics in award notice.
Contractor's specific federal performance history not provided.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $2.4 million to KEYSTONE SHIPPING SERVICES, INC.. (KEY-DMG25-1002A) CAPE DOMINGO FY25 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 $2.4 million.

What is the period of performance?

Start: 2025-08-18. End: 2026-07-26.

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

Information regarding Keystone Shipping Services, Inc.'s specific track record with federal contracts, especially within 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 disputes or contract modifications. Understanding their past performance, particularly in similar deep sea freight operations, is crucial for assessing the reliability and potential risks associated with this current award. Without this historical context, it's difficult to definitively gauge their experience and capability beyond the information presented for this single contract.

How does the awarded amount of $2.4 million compare to similar deep sea freight transportation contracts awarded by the government?

Benchmarking the $2.4 million award against similar deep sea freight contracts requires access to a broader dataset of government procurements. Factors such as cargo type, volume, route complexity, duration, and specific service requirements (e.g., specialized handling, security) significantly influence contract value. Given this is a fixed-fee contract for a 342-day period, it represents a daily rate of approximately $7,018. This figure needs to be compared with other contracts for comparable services. Without more granular data on the scope of work, it's challenging to definitively state if this represents a premium or a discount. However, the full and open competition suggests the price was vetted against market offerings.

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

The primary risk associated with a fixed-fee contract for deep sea freight transportation is the potential for reduced contractor incentive to optimize costs and improve efficiency. Since the contractor is guaranteed a set fee regardless of their actual expenses, they may have less motivation to seek out the most economical routes, fuel-efficient practices, or streamlined operations. This can lead to the government potentially overpaying if the contractor's actual costs are significantly lower than anticipated. Conversely, if unforeseen operational challenges arise that increase costs beyond the fixed fee, the contractor might seek change orders or face financial strain, potentially impacting service delivery. Risk mitigation often involves robust performance monitoring and clear contract terms.

What is the expected effectiveness of this contract in ensuring reliable deep sea freight delivery for the Maritime Administration?

The effectiveness of this contract in ensuring reliable deep sea freight delivery hinges on several factors not fully detailed in the award notice. The Maritime Administration (MARAD) likely has specific operational needs that this contract is intended to fulfill. The fixed-fee structure provides budget certainty, but its effectiveness in driving performance depends heavily on the clarity of the Statement of Work and the rigor of MARAD's oversight. If the contract clearly defines performance standards and delivery schedules, and if MARAD actively monitors compliance, the service should be effective. The contractor's experience and the competitive nature of the award also contribute positively to expected effectiveness.

How has federal spending in deep sea freight transportation evolved, and where does this $2.4 million award fit in?

Federal spending in deep sea freight transportation can fluctuate based on national security needs, economic conditions, and specific agency requirements, such as those of the Maritime Administration. Historically, such spending supports the movement of strategic materials, military equipment, or essential goods during emergencies. A $2.4 million award for a single contract, while significant, represents a specific operational requirement rather than a broad trend. To understand its place, one would need to analyze historical spending patterns for MARAD and similar agencies, looking at the volume and value of contracts awarded over time. This particular award appears to address a defined, medium-term need for specialized transport services.

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: $2,418,190

Exercised Options: $2,418,190

Current Obligation: $2,418,190

Actual Outlays: $1,200,034

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