Navy awards $234.7M contract for deep sea freight, with 5 bidders competing

Contract Overview

Contract Amount: $234,690,890 ($234.7M)

Contractor: Tote Services, LLC

Awarding Agency: Department of Defense

Start Date: 2018-10-01

End Date: 2024-03-31

Contract Duration: 2,008 days

Daily Burn Rate: $116.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: CONTRACT AWARD SBX-1 / N103D VALENZUELA

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32256

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $234.7 million to TOTE SERVICES, LLC for work described as: CONTRACT AWARD SBX-1 / N103D VALENZUELA Key points: 1. Contract value of $234.7M over 6 years suggests significant operational scale. 2. Full and open competition indicates a healthy market with multiple potential providers. 3. The definitive contract type with firm fixed price offers cost certainty. 4. Awarded to TOTE Services, LLC, performance history will be key to assessing value. 5. The North American Industry Classification System (NAICS) code 483111 points to a specialized transportation service. 6. Geographic focus on Florida (ST/SN) may indicate specific logistical hubs or operational areas.

Value Assessment

Rating: good

The contract value of $234.7 million over approximately six years for deep sea freight transportation appears substantial, reflecting the scale of services required by the Department of the Navy. Benchmarking against similar large-scale maritime logistics contracts would provide a clearer picture of value for money. The firm fixed-price structure is generally favorable for the government, locking in costs and reducing the risk of cost overruns, assuming the initial price was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with five bidders participating. This level of competition is generally positive, suggesting that the market has sufficient capacity and interest to bid on this type of service. A higher number of bidders typically leads to more competitive pricing and a wider range of solutions being considered by the agency.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive bids for essential deep sea freight services.

Public Impact

The Department of the Navy benefits from reliable and extensive deep sea freight transportation services. This contract supports the movement of goods and potentially personnel critical for military operations. The primary geographic impact is likely within the operational theaters served by the Navy, with a specific mention of Florida as the state of the awardee. The contract supports jobs within the maritime transportation sector, including crew, logistics, and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep if contract scope expands beyond initial estimates.
Dependence on a single contractor for critical freight services could pose a risk if performance issues arise.
Geopolitical events or global supply chain disruptions could impact service delivery and costs.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive market and potentially better pricing.
Award to an established entity (TOTE Services, LLC) may indicate a track record of reliability.

Sector Analysis

The deep sea freight transportation sector is a critical component of global logistics and national defense. This contract falls under the broader transportation and logistics industry, which is characterized by significant capital investment, complex regulatory environments, and global reach. The market size for such services is substantial, driven by both commercial and governmental needs. This specific award represents a significant portion of spending within the specialized niche of military-related maritime freight.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. Therefore, the direct impact on small businesses through this specific award is likely minimal unless TOTE Services, LLC engages in significant subcontracting with small businesses. Further analysis of subcontracting plans would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which penalizes cost overruns for the contractor. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible. The Inspector General's office for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Military Sealift Command Contracts
Department of Defense Logistics Support
Maritime Transportation Services
Global Freight Forwarding Contracts

Risk Flags

Contract Performance Risk
Supply Chain Vulnerability
Geopolitical Instability Impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $234.7 million to TOTE SERVICES, LLC. CONTRACT AWARD SBX-1 / N103D VALENZUELA

Who is the contractor on this award?

The obligated recipient is TOTE SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $234.7 million.

What is the period of performance?

Start: 2018-10-01. End: 2024-03-31.

What is the historical spending pattern for deep sea freight transportation by the Department of the Navy?

Historical spending data for deep sea freight transportation by the Department of the Navy reveals a consistent need for these services to support global operations. While specific figures fluctuate year-to-year based on operational tempo and strategic requirements, the Navy has historically allocated significant budgets to maritime logistics. For instance, prior to this award, similar contracts would have been in place to ensure the continuous movement of equipment, supplies, and personnel. Analyzing spending trends over the past 5-10 years would show whether this $234.7 million award represents an increase, decrease, or stable level of investment in this capability. Factors such as geopolitical events, deployment schedules, and the modernization of naval assets can influence these spending patterns. The sustained requirement underscores the critical nature of reliable freight services for national defense.

How does the per-unit cost of this contract compare to similar Navy freight contracts?

Determining the precise per-unit cost for this contract is challenging without detailed breakdowns of the services provided (e.g., cost per ton-mile, cost per voyage, cost per container). However, given the total award of $234.7 million over approximately six years, the average annual value is around $39 million. When compared to other large-scale maritime logistics contracts awarded by the Navy or other branches of the Department of Defense, this value appears to be within a reasonable range for extensive deep sea freight operations. Contracts for similar services, especially those involving specialized vessels or routes, can vary significantly. A detailed comparison would require access to the specific performance metrics and pricing structures of comparable contracts, which are often not publicly disclosed in full detail. The firm fixed-price nature suggests that the government has negotiated a set rate, aiming for predictability.

What is the track record of TOTE Services, LLC in performing similar government contracts?

TOTE Services, LLC has a notable track record in providing maritime services, including government contracts. They are known for operating Jones Act vessels and providing logistical support, including sealift capabilities. Their experience often involves complex operations, such as operating government-owned, contractor-operated (GOCO) vessels, and providing specialized maritime solutions. Past performance reviews and contract histories available through federal procurement databases (like SAM.gov or FPDS) would offer more granular detail on their on-time delivery rates, safety records, and overall client satisfaction with previous Navy or DoD contracts. A positive performance history with similar large-scale, long-term contracts would indicate a lower risk associated with this award.

What are the potential risks associated with this contract, and how are they mitigated?

Potential risks for this deep sea freight contract include service disruptions due to weather, geopolitical instability affecting shipping lanes, or unforeseen maintenance issues with vessels. The firm fixed-price nature mitigates financial risk for the government by capping costs, but performance risk remains. Mitigation strategies likely involve robust contract management by the Navy, including performance monitoring, clear communication channels, and contingency planning. TOTE Services, LLC, as the contractor, is responsible for operational risk, including vessel maintenance, crew safety, and route planning. The contract may also include clauses for force majeure events and penalties for non-performance, further incentivizing the contractor to maintain reliable service delivery.

How does this contract contribute to the Navy's overall strategic sealift capabilities?

This contract directly contributes to the Navy's strategic sealift capabilities by ensuring the availability of deep sea freight transportation. Strategic sealift is essential for projecting power and supporting military operations globally, enabling the rapid deployment of troops, equipment, and supplies to theaters of operation. By outsourcing these complex logistical operations to a specialized provider like TOTE Services, LLC, the Navy can focus on its core warfighting missions. The scale of the award suggests it covers significant operational requirements, potentially including the transportation of vehicles, ammunition, fuel, and other critical materiel necessary for sustained military presence and contingency operations worldwide.

Industry Classification

NAICS: Transportation and Warehousing › Deep Sea, Coastal, and Great Lakes Water Transportation › Deep Sea Freight Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3220516R3101

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10550 DEERWOOD PARK BLVD STE 602, 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: $234,690,890

Exercised Options: $234,690,890

Current Obligation: $234,690,890

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline