DOT awards $1.4M for ship management, with fixed fees indicating predictable costs for a 135-day period

Contract Overview

Contract Amount: $2,676,250 ($2.7M)

Contractor: Pacific-Gulf Marine, Inc.

Awarding Agency: Department of Transportation

Start Date: 2025-08-18

End Date: 2026-07-26

Contract Duration: 342 days

Daily Burn Rate: $7.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST NO FEE

Sector: Transportation

Official Description: CAPE KENNEDY-PACIFIC GULF MARINE-KENNEDY25-1002A-FY25 SHIP MANAGER FIXED FEES A-10/12/25-02/26/26(135 DAYS @$10,620.04=$1,433,705.40)

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70146

State: Louisiana Government Spending

Plain-Language Summary

Department of Transportation obligated $2.7 million to PACIFIC-GULF MARINE, INC. for work described as: CAPE KENNEDY-PACIFIC GULF MARINE-KENNEDY25-1002A-FY25 SHIP MANAGER FIXED FEES A-10/12/25-02/26/26(135 DAYS @$10,620.04=$1,433,705.40) Key points: 1. Fixed fee structure provides cost certainty for the specified service period. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Contract duration is relatively short, focusing on immediate operational needs. 4. Service aligns with core maritime transportation functions, indicating strategic alignment. 5. Geographic focus on Louisiana suggests regional operational importance.

Value Assessment

Rating: good

The fixed fee of $10,620.04 per day for ship management appears reasonable when considering the specialized nature of maritime operations and the inclusion of all associated costs within the fee. Benchmarking against similar contracts for vessel management services, especially those involving fixed-fee structures, would provide a more precise valuation. However, the absence of performance-based incentives or variable costs suggests a focus on predictable expenditure for this specific operational phase.

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 had the opportunity to submit proposals. This competitive environment is generally favorable for price discovery and ensuring that the government receives competitive pricing. The specific number of bidders is not provided, but the designation suggests a robust process was followed.

Taxpayer Impact: Taxpayers benefit from the assurance that the contract was awarded through a process designed to solicit the best value from a wide range of potential providers.

Public Impact

The Department of Transportation, specifically the Maritime Administration, benefits from efficient ship management services. Services delivered include the operational oversight and management of a vessel for a defined period. The geographic impact is centered around Louisiana, indicating a focus on regional maritime activities. Workforce implications may involve the utilization of skilled maritime professionals for vessel operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics in the provided data could limit assessment of contractor efficiency beyond the fixed fee.
The fixed fee structure, while predictable, might not incentivize cost-saving innovations by the contractor.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Fixed fee structure provides clear cost expectations for the contract duration.
Contract aligns with the core mission of the Maritime Administration.

Sector Analysis

The maritime transportation sector is critical for global trade and national security, involving complex logistics and specialized vessel operations. This contract for ship management falls within the broader category of logistics and support services for the maritime industry. Spending in this area is often driven by operational requirements, fleet maintenance, and strategic deployment of assets. Comparable spending benchmarks would typically involve daily or monthly rates for vessel operation and management, factoring in vessel size, type, and operational complexity.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, Pacific-Gulf Marine, Inc., is likely a larger entity capable of managing such operations independently or through its own established supply chains.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the Department of Transportation's Maritime Administration. Accountability measures are inherent in the fixed-fee structure, requiring the contractor to deliver the specified services within the agreed-upon cost. Transparency is facilitated by the public nature of federal contract awards, though detailed operational performance data may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Maritime Security Operations
Fleet Operations Support
Vessel Charter Services
Port Operations Management

Risk Flags

Potential for cost overruns if contractor's fixed fee is underestimated.
Risk of contractor cutting corners to maximize profit under fixed fee.
Dependence on contractor's operational expertise for service delivery.
Limited flexibility to adjust scope or services without contract modification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $2.7 million to PACIFIC-GULF MARINE, INC.. CAPE KENNEDY-PACIFIC GULF MARINE-KENNEDY25-1002A-FY25 SHIP MANAGER FIXED FEES A-10/12/25-02/26/26(135 DAYS @$10,620.04=$1,433,705.40)

Who is the contractor on this award?

The obligated recipient is PACIFIC-GULF MARINE, 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: 2026-07-26.

What is the track record of Pacific-Gulf Marine, Inc. in managing similar federal contracts?

Pacific-Gulf Marine, Inc. has a history of performing maritime services for the U.S. government. While specific details on past performance for contracts of this exact scope and value are not provided in this data snippet, their involvement in federal contracts suggests experience in navigating government procurement processes and operational requirements. A deeper dive into their contract history, including past performance evaluations and any reported issues on previous awards, would be necessary for a comprehensive assessment of their track record. This would involve reviewing contract databases for awards related to vessel operation, management, and potentially logistics support across various federal agencies.

How does the daily fixed fee compare to industry benchmarks for similar ship management services?

The fixed fee of approximately $10,620.04 per day for ship management is a key metric for value assessment. To benchmark this effectively, it needs to be compared against similar contracts awarded by the government or within the commercial maritime sector for vessels of comparable size, type, and operational complexity. Factors such as the vessel's age, its specific mission (e.g., cargo, research, support), the level of crewing required, and the geographic area of operation all influence daily rates. Without these comparative data points, it is challenging to definitively state whether this fee represents excellent, fair, or questionable value. However, fixed fees generally aim to cover all direct and indirect costs plus a reasonable profit margin.

What are the primary risks associated with this fixed-fee ship management contract?

The primary risks associated with this fixed-fee ship management contract revolve around potential cost overruns for the contractor and the possibility of the government not receiving optimal value if the fee is set too high or if performance is merely adequate. For the contractor, unforeseen operational issues, increased fuel costs (if not explicitly excluded), or regulatory changes could erode profit margins. For the government, the risk lies in the contractor potentially cutting corners on maintenance or crew welfare to maximize profit under the fixed fee, or conversely, the fee being inflated due to a lack of robust competition or accurate cost estimation. The short duration (135 days) mitigates some long-term risks but emphasizes the need for efficient execution during the contract period.

How effective is the 'full and open competition' approach in ensuring cost-effectiveness for this type of service?

The 'full and open competition' approach is generally considered the most effective method for ensuring cost-effectiveness in federal contracting, as it allows the widest possible pool of vendors to bid. This increases the likelihood of receiving competitive pricing and innovative solutions. For ship management services, this means that various companies with the necessary expertise and resources can present their proposals, driving down costs through market forces. The effectiveness is maximized when the solicitation clearly defines the requirements and evaluation criteria, allowing the government to select the best value offer, not just the lowest price. The success of this approach hinges on the quality of the competition and the government's ability to accurately assess the proposals.

What is the historical spending pattern for ship management services by the Maritime Administration?

Analyzing historical spending patterns for ship management services by the Maritime Administration (MARAD) is crucial for context. This involves examining previous contract awards for similar services over several fiscal years. Key metrics to track would include the total amount spent annually on ship management, the average value of individual contracts, the number of contracts awarded, and the primary contractors receiving these awards. Understanding these trends can reveal whether spending is increasing, decreasing, or remaining stable, and whether MARAD relies on a few key providers or distributes work more broadly. This historical data also helps in benchmarking current contract values and identifying potential anomalies or significant shifts in procurement strategy.

Are there any performance incentives or penalties built into this fixed-fee contract?

The provided data indicates a 'COST NO FEE' (pt: COST NO FEE) contract type, which is unusual for a fixed fee structure. Typically, a fixed-fee contract (FF) has a ceiling price and a negotiated fixed fee. 'Cost No Fee' usually applies to cost-reimbursement contracts where the contractor is reimbursed for allowable costs but receives no fee. However, the data also specifies 'FIXED FEES' in the description and provides a daily rate that implies a fixed amount. Assuming the 'FIXED FEES' description is accurate and the 'COST NO FEE' designation is either a misinterpretation or applies to a specific cost component not detailed, then the primary mechanism for ensuring performance is the contractor's obligation to deliver the services as specified. Without explicit mention of performance incentives or penalties in the provided snippet, it's assumed that adherence to the contract terms and successful completion of the service period are the primary drivers. Further review of the full contract document would be needed to confirm the exact structure and any associated performance clauses.

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: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 111 VETERANS MEMORIAL BLVD STE 740, METAIRIE, LA, 70005

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

Financial Breakdown

Contract Ceiling: $2,676,250

Exercised Options: $2,676,250

Current Obligation: $2,676,250

Actual Outlays: $745,693

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF725D000036

IDV Type: IDC

Timeline