DOT awards $1.13M for vessel repairs, highlighting a sole-source contract for critical maritime services

Contract Overview

Contract Amount: $1,127,000 ($1.1M)

Contractor: Pacific-Gulf Marine, Inc.

Awarding Agency: Department of Transportation

Start Date: 2024-12-06

End Date: 2026-04-30

Contract Duration: 510 days

Daily Burn Rate: $2.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Transportation

Official Description: GEM STATE FY25 REPAIRS A PGM-GEM25-1005 A

Place of Performance

Location: ALAMEDA, ALAMEDA County, CALIFORNIA, 94501

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $1.1 million to PACIFIC-GULF MARINE, INC. for work described as: GEM STATE FY25 REPAIRS A PGM-GEM25-1005 A Key points: 1. The contract's sole-source nature warrants scrutiny regarding potential cost efficiencies and market alternatives. 2. Performance duration of 510 days suggests a significant undertaking, requiring robust project management. 3. The absence of competition may limit opportunities for innovative solutions or cost-saving proposals. 4. Focus on deep-sea freight transportation indicates a specialized service area within the maritime sector. 5. The contract's value, while substantial, needs benchmarking against similar repair services for a true value assessment.

Value Assessment

Rating: fair

The contract value of $1.13 million for vessel repairs over approximately 17 months appears within a reasonable range for specialized maritime services. However, without a competitive bidding process, it is difficult to definitively benchmark the pricing against market rates or assess if it represents the best value for the government. The 'Cost No Fee' contract type suggests that the government will reimburse the contractor for allowable costs plus a negotiated fee, which can sometimes lead to higher overall costs if not closely monitored.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, PACIFIC-GULF MARINE, INC., was solicited. The justification for this approach is not provided in the data, but sole-source awards typically occur when only one responsible source is available or when urgent and compelling circumstances exist. The lack of competition means that the government did not benefit from a range of proposals or price points, potentially leading to a higher cost than if it had been competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, there is less certainty that the negotiated price reflects the lowest possible cost for the required services.

Public Impact

The primary beneficiaries are likely the U.S. maritime industry and potentially the Department of Transportation's operational capabilities. The services delivered involve the repair and maintenance of vessels crucial for deep-sea freight transportation. The geographic impact is centered in California, where the contractor is located and likely where the work will be performed. Workforce implications include employment for skilled maritime repair technicians and support staff at PACIFIC-GULF MARINE, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Lack of competition may reduce incentives for contractor efficiency.
Cost-plus contract type requires diligent oversight to control expenses.
Limited data on contractor's past performance in similar sole-source scenarios.

Positive Signals

Contract awarded to a specific entity suggests specialized capabilities required for the repairs.
The duration indicates a commitment to ensuring vessel readiness for a significant period.
The Maritime Administration's award implies alignment with strategic maritime transportation goals.

Sector Analysis

The maritime transportation sector is a critical component of global and domestic commerce, involving shipbuilding, repair, and operation of vessels. The North American Industry Classification System (NAICS) code 483111, Deep Sea Freight Transportation, falls within this broad sector. Spending in maritime repair can fluctuate based on vessel age, regulatory requirements, and operational demands. Benchmarking this contract's value would ideally involve comparing it to other repair contracts for similar vessel types and repair scopes, considering factors like shipyard labor rates and material costs.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no indication of subcontracting opportunities for small businesses. The award to PACIFIC-GULF MARINE, INC., a presumably larger entity given the contract scope, suggests that the specialized nature of the work may not lend itself to typical small business participation unless they are niche providers within the repair supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation's Maritime Administration. Given the 'Cost No Fee' contract type, rigorous financial oversight and auditing of the contractor's incurred costs will be essential to ensure that the fee is reasonable and that all reimbursed expenses are allowable and allocable. Transparency may be limited due to the sole-source nature, but contract performance reviews and progress reports should be available through standard government contract repositories.

Related Government Programs

Maritime Vessel Maintenance and Repair
Department of Transportation Procurement
Deep Sea Freight Operations Support
Sole-Source Federal Contracts

Risk Flags

Sole-source award without clear justification.
Cost-plus contract type may lack cost control incentives.
Limited transparency on contractor's past performance.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $1.1 million to PACIFIC-GULF MARINE, INC.. GEM STATE FY25 REPAIRS A PGM-GEM25-1005 A

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 $1.1 million.

What is the period of performance?

Start: 2024-12-06. End: 2026-04-30.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded under circumstances such as only one responsible source being available, urgent and compelling needs that preclude competition, or when a specific brand-name item is required. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to determine the precise rationale. This lack of transparency is a common concern with sole-source awards, as it limits the public's ability to understand why competitive processes were bypassed.

How does the $1.13 million contract value compare to similar vessel repair contracts awarded by the government?

Benchmarking this $1.13 million contract value against similar vessel repair contracts requires access to a broader dataset of historical procurements for comparable vessel types, repair scopes, and geographic locations. Factors such as the specific type of vessel (e.g., size, age, complexity), the nature of the repairs (e.g., routine maintenance, major overhauls, emergency repairs), and prevailing labor and material costs in the region significantly influence pricing. Given this is a sole-source award, direct comparison is challenging as it bypasses the price discovery inherent in competitive bidding. However, a review of other Maritime Administration or Navy vessel repair contracts of similar scale could provide a rough comparison point, though variations in scope and market conditions must be carefully considered.

What are the potential risks associated with a 'Cost No Fee' contract type for vessel repairs?

The 'Cost No Fee' (CNF) contract type, while sometimes used for urgent or R&D efforts, carries inherent risks for the government, particularly in a repair scenario. The primary risk is that the contractor is reimbursed for all allowable costs incurred, plus a pre-negotiated fixed fee. This structure can reduce the contractor's incentive to control costs, as their profit (the fee) is fixed regardless of the total cost. Without robust government oversight, there's a risk of cost overruns and inefficiencies. The government bears the financial risk of cost increases, necessitating stringent monitoring of expenditures, labor hours, and material procurement to ensure reasonableness and prevent waste.

What is PACIFIC-GULF MARINE, INC.'s track record with the Department of Transportation or similar agencies?

Information regarding PACIFIC-GULF MARINE, INC.'s specific track record with the Department of Transportation or other federal agencies is not detailed in the provided data snippet. A comprehensive assessment would require reviewing contract databases (like SAM.gov or FPDS) for past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or claims. Understanding their past performance, particularly on similar maritime repair contracts and under different contract types, is crucial for evaluating the risk associated with this current sole-source award.

How does this contract align with the Maritime Administration's strategic goals for U.S. deep-sea freight transportation?

This contract directly supports the Maritime Administration's (MARAD) mission by ensuring the operational readiness and maintenance of vessels engaged in deep-sea freight transportation. Maintaining a capable U.S. merchant marine fleet is vital for national security, economic competitiveness, and the facilitation of global trade. By funding repairs, MARAD is investing in the longevity and efficiency of these critical assets, thereby bolstering the capacity and reliability of U.S.-flagged shipping services. The specific repairs undertaken will determine the precise contribution to fleet modernization, safety, or operational capability.

What is the historical spending pattern for vessel repair services by the Maritime Administration?

The provided data snippet does not offer historical spending patterns for vessel repair services by the Maritime Administration. To analyze this, one would need to examine MARAD's procurement history over several fiscal years, identifying trends in contract values, types of services procured (e.g., routine maintenance, major overhauls, specific component repairs), and the frequency of sole-source versus competitive awards. Understanding historical spending can help contextualize the $1.13 million award, identify potential increases or decreases in demand for such services, and assess whether current procurement strategies align with past practices or represent a shift in 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: 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: $1,127,000

Exercised Options: $1,127,000

Current Obligation: $1,127,000

Actual Outlays: $796,415

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693JF724D000018

IDV Type: IDC

Timeline