Transportation awards $5.4M for deep sea freight, a sole-source contract with TOTE Services, LLC

Contract Overview

Contract Amount: $5,447,319 ($5.4M)

Contractor: Tote Services, LLC

Awarding Agency: Department of Transportation

Start Date: 2024-10-04

End Date: 2025-10-26

Contract Duration: 387 days

Daily Burn Rate: $14.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Transportation

Official Description: PACIFIC TRACKER FY24 OPER MDA MISSION TSI-PTK24-2002 C

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97217

State: Oregon Government Spending

Plain-Language Summary

Department of Transportation obligated $5.4 million to TOTE SERVICES, LLC for work described as: PACIFIC TRACKER FY24 OPER MDA MISSION TSI-PTK24-2002 C Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 387 days suggests a focused, short-term operational need. 3. No small business set-aside was applied, indicating potential missed opportunities for smaller firms. 4. The contract type 'COST NO FEE' requires careful monitoring of incurred costs to ensure value. 5. The Maritime Administration is the awarding agency, suggesting a focus on strategic shipping capabilities.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the 'COST NO FEE' structure, which prioritizes service delivery over fixed pricing. Without competitive bids or a clear per-unit cost, it's difficult to definitively assess if the $5.4 million represents optimal value for money. The lack of competition suggests that the government may not have secured the most economical option available in the market. Further analysis would require understanding the specific operational requirements and comparing them to industry standards for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required service or under specific emergency conditions. The lack of competition means there were no multiple bids to compare, which can limit the government's ability to negotiate the best possible price and may lead to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding processes. This can result in a less efficient use of public funds.

Public Impact

The primary beneficiary is the Department of Transportation, specifically the Maritime Administration, which receives essential deep sea freight transportation services. The services delivered are critical for maintaining strategic sealift capabilities and ensuring the movement of goods or assets as needed. The geographic impact is likely focused on operational routes determined by the Maritime Administration, potentially involving domestic or international waters. Workforce implications may include the utilization of specialized maritime personnel and support staff managed by TOTE Services, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus contract type requires rigorous oversight to control expenses.
Lack of small business participation may exclude specialized smaller providers.

Positive Signals

Award to an established provider (TOTE Services, LLC) suggests reliability for critical operations.
Contract duration provides a defined period for service delivery.
Focus on deep sea freight transportation addresses a specific governmental need.

Sector Analysis

The deep sea freight transportation sector is vital for national security and economic stability, involving specialized vessels and logistics. This contract fits within the broader defense and transportation sectors, where government agencies procure specialized shipping services for strategic purposes. Comparable spending benchmarks are difficult to establish without more detail on the specific cargo and routes, but the Maritime Administration frequently engages in contracts for sealift and specialized freight.

Small Business Impact

This contract was not competed with a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract are limited. The Maritime Administration's procurement strategy in this instance did not prioritize engaging the small business ecosystem, potentially missing out on specialized services or innovative solutions that smaller firms might offer.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation's Office of Inspector General, with internal oversight from the Maritime Administration's contracting officers. Accountability measures are tied to the 'COST NO FEE' structure, requiring detailed reporting and justification of all incurred expenses. Transparency is moderate, as the award details are public, but the lack of competitive bidding limits the public's ability to scrutinize price reasonableness.

Related Government Programs

Maritime Sealift Command Contracts
Strategic Sealift Capability Programs
Department of Transportation Freight Logistics
National Defense Transportation Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $5.4 million to TOTE SERVICES, LLC. PACIFIC TRACKER FY24 OPER MDA MISSION TSI-PTK24-2002 C

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 $5.4 million.

What is the period of performance?

Start: 2024-10-04. End: 2025-10-26.

What is the specific operational need driving this sole-source award for deep sea freight transportation?

The specific operational need for this sole-source award is not detailed in the provided data. However, sole-source awards by the Maritime Administration often relate to maintaining strategic sealift capabilities, supporting national defense readiness, or fulfilling unique transportation requirements that cannot be met through competitive means. These could include transporting specific military assets, responding to national emergencies, or ensuring the availability of specialized vessels for national security purposes. The 'PACIFIC TRACKER FY24 OPER MDA MISSION TSI-PTK24-2002 C' designation suggests an operational mission within Fiscal Year 2024, likely tied to a specific deployment or requirement.

How does the 'COST NO FEE' contract type compare to other pricing structures for similar services?

The 'COST NO FEE' (CNF) contract type is a variation of cost-reimbursement contracts where the contractor is reimbursed for allowable costs but receives no fee or profit. This structure is typically used when the contractor has little or no incentive to control costs, as their profit is not tied to efficiency. It differs significantly from fixed-price contracts, where the contractor bears the risk of cost overruns, or other cost-reimbursement types (like Cost Plus Incentive Fee or Cost Plus Award Fee) that offer incentives for cost control or performance. For deep sea freight, fixed-price contracts are more common for routine routes, while CNF might be used for highly specialized, unpredictable, or urgent missions where defining scope and cost upfront is impractical.

What are the potential risks associated with a sole-source award in the transportation sector?

The primary risk associated with a sole-source award in the transportation sector is the lack of competitive pressure, which can lead to inflated prices and reduced value for the government. Without competing bids, the government may overpay for services compared to what could be obtained in a competitive market. Additionally, sole-source awards can stifle innovation by limiting opportunities for new or smaller companies to enter the market and offer alternative solutions. There's also a risk that the chosen contractor may not be the most efficient or capable provider if alternatives were not thoroughly explored. This can impact operational effectiveness and budget adherence.

What is TOTE Services, LLC's track record with the Maritime Administration or similar agencies?

TOTE Services, LLC has a significant track record in providing maritime services, including vessel operations and management, often supporting government contracts. They are known for operating Jones Act-qualified vessels and have been involved in various government logistics and transportation initiatives. Their experience likely includes managing complex shipping operations, ensuring regulatory compliance, and maintaining vessel readiness. While specific details of their past performance with the Maritime Administration on contracts of this exact nature require deeper database searches, their established presence suggests a capacity to fulfill the requirements of this deep sea freight transportation award.

How does this $5.4 million award compare to historical spending on similar deep sea freight services by the government?

Comparing this $5.4 million award to historical spending requires access to comprehensive historical contract data for similar deep sea freight services. However, the Maritime Administration and Department of Defense frequently award contracts for specialized shipping and sealift capabilities, with costs varying widely based on vessel type, duration, route, and specific mission requirements. A $5.4 million award for a 387-day contract (approximately $13,953 per day) for deep sea freight transportation appears to be within a plausible range for specialized maritime operations, especially if it involves unique vessel capabilities or strategic support. Without specific comparable contracts, a precise benchmark is difficult, but it suggests a significant, albeit not exceptionally large, operational commitment.

What are the implications of the contract ending in October 2025 for future transportation needs?

The contract's expiration in October 2025 implies that the specific deep sea freight transportation service provided by TOTE Services, LLC will conclude on that date unless extended or renewed. This necessitates forward planning by the Maritime Administration to ensure continuity of service. They will need to assess whether the need persists, if the contract should be re-competed, extended, or if alternative solutions are available. The timing allows for market research and the initiation of a new procurement process well in advance of the expiration date, potentially leading to a new competitive award or a different contracting approach.

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: 10401 DEERWOOD PARK BLVD, JACKSONVILLE, FL, 32256

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,447,319

Exercised Options: $5,447,319

Current Obligation: $5,447,319

Actual Outlays: $5,447,319

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF724D000020

IDV Type: IDC

Timeline