Tote Services awarded $21.1M contract for deep sea freight, raising questions about competition and value

Contract Overview

Contract Amount: $21,092,531 ($21.1M)

Contractor: Tote Services, LLC

Awarding Agency: Department of Transportation

Start Date: 2022-09-21

End Date: 2025-10-26

Contract Duration: 1,131 days

Daily Burn Rate: $18.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Transportation

Official Description: FISHER GAA COST REIMBURSABLE ITEMS TSI-FSH22-GAC A

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97203

State: Oregon Government Spending

Plain-Language Summary

Department of Transportation obligated $21.1 million to TOTE SERVICES, LLC for work described as: FISHER GAA COST REIMBURSABLE ITEMS TSI-FSH22-GAC A Key points: 1. Contract awarded via "not available for competition" justification, limiting price discovery. 2. Duration of over 3 years suggests a significant, ongoing need for services. 3. Cost-reimbursable contract type can introduce risk if not closely managed. 4. The specific service (deep sea freight) is critical for supply chain operations. 5. Geographic scope includes Oregon, indicating a regional focus for this delivery order.

Value Assessment

Rating: questionable

The contract's value of $21.1 million over approximately three years for deep sea freight transportation requires careful scrutiny. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The cost-reimbursable nature of the award necessitates robust oversight to ensure costs remain reasonable and aligned with the services provided. Further analysis of the specific services rendered and their necessity would be required to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' justification, indicating that a full and open competition was not conducted. This typically means only one source was identified or available to fulfill the requirement. The lack of multiple bidders limits the government's ability to solicit competitive pricing and potentially achieve better value.

Taxpayer Impact: Taxpayers may not be receiving the most cost-effective solution due to the absence of competitive pressure to drive down prices.

Public Impact

The primary beneficiaries are likely entities requiring deep sea freight transportation services, potentially including government agencies or their partners involved in logistics and supply chain management. The services delivered involve the transportation of goods via deep sea freight, crucial for moving large volumes of cargo over long distances. The geographic impact is specified as Oregon, suggesting the operations or origin/destination points for this contract are centered in that state. Workforce implications are not explicitly detailed but would involve personnel for vessel operations, logistics coordination, and potentially shore-based support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-reimbursable contract type requires diligent oversight to prevent cost overruns.
The 'not available for competition' justification needs thorough review to ensure it was appropriate.

Positive Signals

The contract addresses a critical need for deep sea freight transportation.
The duration suggests a stable, long-term requirement being met.
Awarding to a single provider might indicate specialized capabilities or unique market conditions.

Sector Analysis

The deep sea freight transportation sector is a vital component of global commerce and national logistics. This contract falls within the broader transportation and logistics industry, which is characterized by significant capital investment, complex regulatory environments, and global reach. Benchmarking this contract's value would ideally involve comparing it to other government or commercial contracts for similar services, considering factors like vessel size, route, cargo type, and duration. The Maritime Administration's role often involves ensuring the availability of shipping capacity for national security and economic purposes.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of deep sea freight transportation, which often involves large vessels and significant operational scale, it is plausible that the primary contractors are larger entities. Subcontracting opportunities for small businesses might exist in ancillary services, such as port operations, maintenance, or specialized logistics support, but these are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation's Maritime Administration. As a cost-reimbursable contract, rigorous financial oversight and auditing are crucial to ensure that all costs incurred by the contractor are reasonable, allocable, and allowable. Transparency would be enhanced by public reporting of expenditures and performance metrics. The Inspector General for the Department of Transportation would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award.

Related Government Programs

Maritime Shipping Contracts
Department of Transportation Logistics
Deep Sea Freight Services
Cost-Reimbursable Service Contracts

Risk Flags

Sole-source award justification requires scrutiny.
Cost-reimbursable contract type necessitates strong oversight.
Long contract duration may expose government to market risks.
Lack of competition limits potential for cost savings.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $21.1 million to TOTE SERVICES, LLC. FISHER GAA COST REIMBURSABLE ITEMS TSI-FSH22-GAC A

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 $21.1 million.

What is the period of performance?

Start: 2022-09-21. End: 2025-10-26.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION'. This classification typically implies that only one responsible source exists to meet the government's needs, or that a compelling urgency, national security requirement, or other specific exception to full and open competition applies. Without further details from the contracting agency (Maritime Administration), the precise reason remains unspecified. Common justifications include unique capabilities, proprietary technology, or a critical, time-sensitive need where soliciting bids would be impractical or detrimental. A thorough review of the agency's justification documentation would be necessary to understand the rationale and assess its validity.

How does the cost-reimbursable nature of this contract impact potential cost savings for the government?

Cost-reimbursable contracts, while offering flexibility for services with uncertain costs, inherently carry a higher risk of cost overruns compared to fixed-price contracts. The government agrees to pay the contractor's actual costs incurred, plus a fee. This structure necessitates robust government oversight, including detailed auditing of expenses, to ensure costs are reasonable, allocable, and allowable. Without stringent controls and clear performance metrics, contractors may have less incentive to control costs, potentially leading to higher overall spending than anticipated. For this $21.1 million contract, effective management of the cost-reimbursement elements is critical to achieving value for taxpayer money.

What are the potential risks associated with a contract duration of over three years for deep sea freight?

A contract duration of over three years (1131 days) for deep sea freight transportation suggests a long-term commitment. Potential risks include market volatility in fuel prices, shipping rates, and demand, which could make the agreed-upon terms less favorable over time. There's also the risk of technological obsolescence in vessel or operational technology. Furthermore, a long duration can reduce the government's flexibility to adapt to changing needs or to take advantage of more competitive market conditions that may arise. Ensuring the contract includes mechanisms for price adjustments or performance reviews can mitigate some of these risks.

Can the 'Deep Sea Freight Transportation' service be benchmarked against other federal spending in similar categories?

Benchmarking this specific 'Deep Sea Freight Transportation' contract requires access to comparable federal spending data. While the NAICS code '483111' identifies the industry, the exact nature of the service (e.g., type of cargo, specific routes, vessel class, contract terms) is crucial for a meaningful comparison. Federal agencies procure various transportation and logistics services, but direct comparisons for deep sea freight are less common than for domestic trucking or air cargo. Analyzing historical spending by the Maritime Administration or other agencies for similar maritime transport needs, considering factors like cost per ton-mile or per-day vessel charter rates, would be necessary. Without such granular data, a precise benchmark is challenging.

What is the historical spending pattern for deep sea freight transportation by the Maritime Administration?

Historical spending data for deep sea freight transportation by the Maritime Administration (MARAD) is essential for context. Analyzing past contracts, including their values, durations, competition levels, and performance outcomes, would reveal trends and patterns. For instance, has MARAD historically relied on sole-source awards for these services, or has competition been the norm? Understanding the typical scale and frequency of such contracts can help assess whether the current $21.1 million award is an outlier or part of a consistent spending strategy. This historical perspective is vital for evaluating the current contract's financial and operational implications.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 10401 DEERWOOD PARK BLVD STE 1300, 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: $20,971,117

Exercised Options: $20,971,117

Current Obligation: $21,092,531

Actual Outlays: $20,950,556

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 693JF721G000001

IDV Type: BOA

Timeline