Department of Transportation awards $337M firm-fixed-price contract for NSMV I delivery to TOTE Services, LLC

Contract Overview

Contract Amount: $340,096,385 ($340.1M)

Contractor: Tote Services, LLC

Awarding Agency: Department of Transportation

Start Date: 2020-04-06

End Date: 2023-04-07

Contract Duration: 1,096 days

Daily Burn Rate: $310.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE CONTRACTOR IS HEREBY TASKED TO DELIVER NSMV I TO THE GOVERNMENT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE CONTRACT AT A FIRM-FIXED PRICE OF $337,180,000.00. THIS DELIVERY ORDER ALSO PROVIDES AND OBLIGATES THE FUND ($337,180,000.00) FOR T

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32256

State: Florida Government Spending

Plain-Language Summary

Department of Transportation obligated $340.1 million to TOTE SERVICES, LLC for work described as: THE CONTRACTOR IS HEREBY TASKED TO DELIVER NSMV I TO THE GOVERNMENT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE CONTRACT AT A FIRM-FIXED PRICE OF $337,180,000.00. THIS DELIVERY ORDER ALSO PROVIDES AND OBLIGATES THE FUND ($337,180,000.00) FOR T Key points: 1. The contract's firm-fixed-price structure aims to control costs for the government. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The contract duration of 1096 days indicates a significant, multi-year undertaking. 4. The North American Industry Classification System (NAICS) code 336611 points to shipbuilding and repairing. 5. The award was made by the Maritime Administration, a key agency within the DOT. 6. The contract value of $337,180,000.00 represents a substantial investment in maritime assets.

Value Assessment

Rating: good

The firm-fixed-price contract type is generally favorable for the government as it shifts cost overrun risks to the contractor. Benchmarking this specific contract's value would require detailed analysis of comparable shipbuilding contracts for vessels of similar size and complexity, which are not readily available in this dataset. However, the fixed price suggests a negotiated value based on anticipated costs and profit margins.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This method is designed to foster a competitive environment, potentially leading to better pricing and terms for the government. The number of bidders is not specified, but the use of this procurement method suggests a deliberate effort to maximize competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a level playing field for contractors, which can drive down prices and encourage innovation, ultimately leading to better value for public funds.

Public Impact

The primary beneficiary is the U.S. government, specifically the Maritime Administration, which will receive the National Security Multi-Mission Vessel (NSMV) I. The service delivered is the construction and delivery of a new, advanced maritime vessel. The geographic impact is primarily in Florida, where the contract is being performed. The contract will likely have implications for the shipbuilding and repair workforce in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed price does not adequately account for unforeseen complexities in shipbuilding.
Dependence on a single contractor for a critical asset delivery.
Risk of schedule delays impacting the operational readiness of the NSMV I.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
The Maritime Administration's involvement indicates strategic national interest in the vessel.

Sector Analysis

The shipbuilding and repairing industry (NAICS 336611) is a capital-intensive sector characterized by large, complex projects. Contracts of this magnitude are typically awarded through competitive processes to established shipbuilders. The market size for naval and commercial shipbuilding is significant, driven by defense needs, commercial shipping demands, and government asset replacement programs. This contract fits within the broader context of U.S. maritime industrial base investment.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the scale and specialized nature of shipbuilding, it is common for prime contracts to be awarded to large, experienced firms. However, the prime contractor, TOTE Services, LLC, may engage small businesses as subcontractors for various components or services, contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation's Office of the Inspector General, which is responsible for auditing and investigating programs and operations within the department. The firm-fixed-price nature of the contract itself serves as a form of cost oversight by placing financial risk on the contractor. Transparency is facilitated through contract award databases and reporting requirements.

Related Government Programs

National Security Multi-Mission Vessels (NSMV) Program
U.S. Maritime Administration Contracts
Department of Transportation Shipbuilding Initiatives
Federal Shipbuilding and Repair Contracts

Risk Flags

Potential for cost escalation in shipbuilding.
Schedule adherence for critical asset delivery.
Ensuring vessel meets all technical specifications.
Long-term maintenance and operational costs post-delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $340.1 million to TOTE SERVICES, LLC. THE CONTRACTOR IS HEREBY TASKED TO DELIVER NSMV I TO THE GOVERNMENT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE CONTRACT AT A FIRM-FIXED PRICE OF $337,180,000.00. THIS DELIVERY ORDER ALSO PROVIDES AND OBLIGATES THE FUND ($337,180,000.00) FOR T

Who is the contractor on this award?

The obligated recipient is TOTE SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Maritime Administration).

What is the total obligated amount?

The obligated amount is $340.1 million.

What is the period of performance?

Start: 2020-04-06. End: 2023-04-07.

What is the track record of TOTE Services, LLC in delivering large-scale government shipbuilding contracts?

TOTE Services, LLC, part of the TOTE Group, has a significant history in maritime operations and logistics, including vessel management and operation. While specific details on their track record for delivering large-scale government shipbuilding contracts directly are not provided in this data snippet, their parent company's experience in managing complex maritime assets suggests a capability to oversee such projects. Further investigation into their past performance on similar government contracts, particularly those involving new vessel construction or major conversions, would be necessary for a comprehensive assessment. Their involvement in the NSMV program indicates they were deemed capable of undertaking this significant shipbuilding effort.

How does the $337 million cost compare to similar shipbuilding contracts for vessels of comparable size and capability?

Benchmarking the $337 million cost requires detailed comparison with other National Security Multi-Mission Vessels (NSMV) or similar government-funded training/research vessels. The NSMV program aims to build five state-of-the-art training vessels for U.S. maritime academies. The cost per vessel can vary significantly based on design complexity, equipment, shipyard labor rates, and market conditions at the time of contract award. Without specific details on the vessel's specifications and comparing it to other contracts within the NSMV program or similar international builds, a precise value-for-money assessment is challenging. However, the firm-fixed-price nature suggests a negotiated value intended to be competitive.

What are the primary risks associated with this shipbuilding contract, and how are they being mitigated?

Key risks in shipbuilding contracts include cost overruns due to material price fluctuations or design changes, schedule delays from labor issues or supply chain disruptions, and technical performance issues. For this contract, the firm-fixed-price structure mitigates cost overrun risk for the government by placing it on the contractor. Mitigation for schedule delays and technical performance would typically involve detailed contract clauses, performance milestones, liquidated damages for late delivery, and rigorous inspection and testing protocols throughout the construction process. The Maritime Administration's oversight is crucial for monitoring these risks.

What is the expected effectiveness of the NSMV I once delivered, and how does this contract contribute to that?

The National Security Multi-Mission Vessel (NSMV) I is designed to serve as a state-of-the-art training platform for cadets at U.S. maritime academies, equipping the future U.S. merchant marine and naval officers with modern skills. It will also possess capabilities for supporting humanitarian aid and disaster relief missions. This contract directly contributes to the effectiveness by ensuring the timely and cost-controlled delivery of the vessel according to specified requirements. The successful completion of this contract is foundational to the operationalization of the NSMV program's training and national defense support objectives.

What are the historical spending patterns for shipbuilding and repair contracts by the Maritime Administration?

Historical spending patterns for the Maritime Administration (MARAD) in shipbuilding and repair can fluctuate significantly based on national priorities, fleet modernization needs, and the availability of funding. MARAD's budget often supports programs like the Jones Act, Ready Reserve Force maintenance, and initiatives like the NSMV program. Major shipbuilding contracts, such as the NSMV, represent substantial investments that can dominate annual spending figures in this category. Analyzing MARAD's historical obligations for shipbuilding and repair over the past decade would reveal trends related to new construction versus maintenance, and the types of vessels prioritized.

What is the significance of the firm-fixed-price (FFP) contract type for this large shipbuilding project?

The selection of a Firm-Fixed-Price (FFP) contract type for a project valued at $337 million is significant because it places the primary responsibility for cost control on the contractor, TOTE Services, LLC. Under an FFP agreement, the contractor agrees to a set price for the work, and any cost overruns incurred beyond that price are absorbed by the contractor, not the government. This structure provides the government with maximum cost certainty and predictability, which is highly desirable for large, complex projects where unforeseen expenses can be substantial. It incentivizes the contractor to manage resources efficiently and minimize costs to maximize their profit margin.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Saltchuk Resources, Inc.

Address: 10550 DEERWOOD PARK BLVD STE 602, JACKSONVILLE, FL, 32256

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

Financial Breakdown

Contract Ceiling: $340,096,385

Exercised Options: $340,096,385

Current Obligation: $340,096,385

Actual Outlays: $338,605,997

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF719D000002

IDV Type: IDC

Timeline