Transportation contract for $2.25M awarded to Keystone Shipping Services for operating costs

Contract Overview

Contract Amount: $3,124,936 ($3.1M)

Contractor: Keystone Shipping Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2025-08-28

End Date: 2026-01-31

Contract Duration: 156 days

Daily Burn Rate: $20.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Transportation

Official Description: CAPE KENNEDY-KEYSTONE SHIPPING SERVICES-KENNEDY25-2002C-FY25 OPERATING COSTS (MISSION) C-$2,249,060.62

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70146

State: Louisiana Government Spending

Plain-Language Summary

Department of Transportation obligated $3.1 million to KEYSTONE SHIPPING SERVICES, INC. for work described as: CAPE KENNEDY-KEYSTONE SHIPPING SERVICES-KENNEDY25-2002C-FY25 OPERATING COSTS (MISSION) C-$2,249,060.62 Key points: 1. Contract awarded for mission-related operating costs, indicating essential service provision. 2. Sole-source award raises questions about potential cost efficiencies and market alternatives. 3. Contract duration of 156 days suggests a short-term operational need. 4. The award is a delivery order, implying it's part of a larger contract vehicle. 5. Focus on operating costs highlights the day-to-day expenses of service delivery.

Value Assessment

Rating: questionable

The contract's value of $2,249,060.62 for operating costs is difficult to benchmark without more detail on the specific services rendered. As a sole-source award, there is no direct comparison to assess pricing competitiveness. The 'COST NO FEE' contract type suggests that the government reimburses the contractor for allowable costs, which can sometimes lead to less incentive for cost control compared to fixed-price contracts. Further analysis of the cost components would be needed to determine true value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Keystone Shipping Services, Inc., was solicited. This limits the opportunity for competitive bidding and price discovery. The rationale for a sole-source award is not provided, but it typically implies unique capabilities, urgent needs, or a lack of viable alternatives. The absence of competition means the government did not benefit from potentially lower prices or innovative solutions that multiple bidders might have offered.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiaries are Keystone Shipping Services, Inc., through the award of this contract. The services delivered are related to operating costs for mission-related activities within the Department of Transportation. The geographic impact is likely focused on areas where the transportation mission operates, with a specific mention of Louisiana (ST: LA, SN: LOUISIANA). Workforce implications would primarily affect the employees of Keystone Shipping Services, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of detailed service description makes it difficult to assess the necessity and efficiency of the operating costs.
The 'COST NO FEE' contract type may reduce contractor incentive for cost control.

Positive Signals

Award to Keystone Shipping Services, Inc. indicates a trusted partner for specific operational needs.
Contract supports essential operating costs for a Department of Transportation mission.
Delivery order structure suggests integration into a broader, potentially established, contracting framework.

Sector Analysis

The contract falls within the Transportation sector, specifically related to deep-sea freight transportation (NA: 483111). This industry involves the movement of goods via large vessels across oceans. The market size for such services can be substantial, driven by global trade volumes. This specific contract, focusing on operating costs, likely supports the day-to-day functioning of a maritime operation, potentially related to government logistics or strategic shipping capabilities. Benchmarking is difficult without knowing the specific operational scope.

Small Business Impact

This contract was not set aside for small businesses (SS: false, SB: false). Therefore, there are no direct subcontracting implications or specific benefits to the small business ecosystem stemming from this particular award. The focus is on a large business, Keystone Shipping Services, Inc.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation and its respective contracting officers. The Maritime Administration (SA) would likely be involved in monitoring performance and costs. As a sole-source award, transparency might be limited compared to competed contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Transportation Operating Support Contracts
Maritime Operations Funding
Deep Sea Freight Services
Government Logistics Contracts

Risk Flags

Sole-source award lacks competitive justification.
Contract type ('COST NO FEE') may reduce cost control incentives.
Limited transparency on specific operating costs and service details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $3.1 million to KEYSTONE SHIPPING SERVICES, INC.. CAPE KENNEDY-KEYSTONE SHIPPING SERVICES-KENNEDY25-2002C-FY25 OPERATING COSTS (MISSION) C-$2,249,060.62

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 $3.1 million.

What is the period of performance?

Start: 2025-08-28. End: 2026-01-31.

What specific operating costs are covered under this contract?

The provided data indicates the contract is for 'OPERATING COSTS (MISSION)' valued at $2,249,060.62. However, the specific breakdown of these costs is not detailed in the provided information. Typically, operating costs in such contracts could include fuel, crew wages, maintenance, port fees, insurance, and administrative overhead necessary to keep the transportation assets operational and fulfill the mission requirements. Without a detailed cost breakdown or statement of work, it is impossible to ascertain the precise nature of the expenses being reimbursed.

Why was this contract awarded on a sole-source basis?

The contract was awarded as 'NOT COMPETED' (CT: NOT COMPETED), indicating a sole-source procurement. The specific justification for this sole-source award is not provided in the data. Common reasons for sole-source awards include the unique capability of a single contractor, urgent and compelling needs where competition is not feasible, or when the contract is a follow-on to a previous sole-source award where only one contractor can provide the required services. Further investigation into the Federal Procurement Data System (FPDS) or agency justifications would be needed to understand the precise rationale.

How does the 'COST NO FEE' contract type affect contractor incentives?

A 'COST NO FEE' (PT: COST NO FEE) contract type means the contractor is reimbursed for all allowable costs incurred in performing the contract, but receives no additional profit or fee. This structure is typically used when the scope of work is uncertain or when the government needs to ensure a service is performed regardless of profit potential, often in urgent situations or for essential but low-margin services. While it ensures the service is performed, it can reduce the contractor's incentive to control costs rigorously, as they are guaranteed to be reimbursed for incurred expenses. Oversight and detailed cost auditing become critical to manage expenditures effectively.

What is the significance of the 'Deep Sea Freight Transportation' NAICS code?

The North American Industry Classification System (NAICS) code 483111, 'Deep Sea Freight Transportation,' signifies that the primary business activity related to this contract involves the transportation of freight by vessel on deep seas or oceans. This indicates the contract supports operations that are part of the global shipping and logistics network, likely involving large cargo vessels. This classification helps in understanding the industry context and comparing this contract to others within the same sector.

What is the historical spending pattern for Keystone Shipping Services, Inc. with the Department of Transportation?

The provided data includes a 'BR' (Base Year or Base Period) value of 20032, which might indicate a prior contract or a baseline value from 2003. However, without more context or access to historical procurement data, it's impossible to establish a comprehensive spending pattern for Keystone Shipping Services, Inc. with the Department of Transportation. To assess historical spending, one would need to query databases like FPDS for all contracts awarded to this vendor by this agency over several fiscal years, analyzing the volume, types, and values of awards.

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: $3,124,936

Exercised Options: $3,124,936

Current Obligation: $3,124,936

Actual Outlays: $2,118,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF724D000012

IDV Type: IDC

Timeline