Navy awards $144M contract for deep-sea freight transportation to Patriot Contract Services, LLC

Contract Overview

Contract Amount: $144,118,927 ($144.1M)

Contractor: Patriot Contract Services, LLC

Awarding Agency: Department of Defense

Start Date: 2023-09-16

End Date: 2026-09-30

Contract Duration: 1,110 days

Daily Burn Rate: $129.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIXED PRICE AWARD FEE

Sector: Other

Official Description: N105B / PM3 M. BAQUERIZO-POOLE OPERATION AND MAINTENANCE OF SEAY&PIL.

Place of Performance

Location: CONCORD, CONTRA COSTA County, CALIFORNIA, 94520

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $144.1 million to PATRIOT CONTRACT SERVICES, LLC for work described as: N105B / PM3 M. BAQUERIZO-POOLE OPERATION AND MAINTENANCE OF SEAY&PIL. Key points: 1. Contract value of $144 million over approximately three years suggests significant operational scale. 2. The award was made under full and open competition, indicating a competitive bidding process. 3. Fixed Price Award Fee contract type introduces performance incentives for the contractor. 4. The North American Industry Classification System (NAICS) code 483111 points to deep-sea freight transportation services. 5. The contract duration of 1110 days (approx. 3 years) allows for sustained operational support. 6. The contract was awarded by the Department of the Navy, a major defense spender. 7. The base value of $129.8 million provides a clear benchmark for initial service costs.

Value Assessment

Rating: good

The contract value of $144 million for approximately three years of deep-sea freight transportation appears reasonable given the scale of operations typically required by the Department of the Navy. Benchmarking against similar large-scale logistics contracts within the defense sector would provide further context on value for money. The fixed-price award fee structure suggests an attempt to balance cost control with performance incentives, which can be an effective approach if performance metrics are well-defined and achievable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple bidders were likely considered. The specific exclusion of sources needs further investigation to understand its impact on the competitive landscape. A competitive process generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition awards.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages a wider range of providers to bid, fostering a more competitive environment that can drive down prices and improve service quality.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially other Department of Defense entities requiring deep-sea freight transportation. Services delivered include the operation and maintenance of vessels for deep-sea freight transport. The geographic impact is likely global, supporting naval operations and logistics worldwide. Workforce implications include employment opportunities for mariners, logistics personnel, and support staff within Patriot Contract Services, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if award fee criteria are not met or if unforeseen operational challenges arise.
Dependence on a single contractor for critical deep-sea freight operations could pose a risk if performance issues emerge.
The 'exclusion of sources' clause warrants scrutiny to ensure it did not unduly limit competition.

Positive Signals

Award fee structure incentivizes contractor performance and potentially higher service quality.
Full and open competition suggests a robust market for these services, indicating contractor capability.
Long-term contract duration provides stability for both the government and the contractor.

Sector Analysis

The deep-sea freight transportation sector is a critical component of global logistics and defense supply chains. This contract falls within the broader maritime transportation industry, which is characterized by significant capital investment in vessels and specialized operational expertise. The Department of Defense is a major consumer of these services, relying on them for projecting power and maintaining supply lines across vast distances. Comparable spending benchmarks would involve analyzing other large-scale maritime logistics contracts awarded by military branches.

Small Business Impact

The data indicates that small business participation was not a primary consideration for this specific award, as the 'small business set-aside' field is false. There is no explicit information on subcontracting plans for small businesses. Further analysis would be needed to determine if Patriot Contract Services, LLC has a history of engaging small businesses in its supply chain or if there are opportunities for small businesses to participate in supporting roles for this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are likely embedded within the fixed-price award fee structure, linking payment to performance. Transparency is generally facilitated through contract award databases, though specific performance metrics and detailed operational reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Sealift Command Contracts
Defense Logistics Agency Contracts
Maritime Transportation Services
Deep Sea Shipping Contracts
Naval Vessel Operations

Risk Flags

Potential for performance issues impacting critical Navy logistics.
Risk of cost escalation if fuel prices or operational demands exceed projections.
Dependence on a single contractor for essential deep-sea transport services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $144.1 million to PATRIOT CONTRACT SERVICES, LLC. N105B / PM3 M. BAQUERIZO-POOLE OPERATION AND MAINTENANCE OF SEAY&PIL.

Who is the contractor on this award?

The obligated recipient is PATRIOT CONTRACT 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 $144.1 million.

What is the period of performance?

Start: 2023-09-16. End: 2026-09-30.

What is the historical performance record of Patriot Contract Services, LLC with the Department of Defense?

A review of Patriot Contract Services, LLC's contract history with the Department of Defense is crucial for assessing their reliability and performance. While this specific award is for $144 million, understanding their past performance on similar contracts, including any instances of contract modifications, disputes, or performance failures, would provide valuable insight. Data from contract databases like SAM.gov or FPDS can reveal their track record, including on-time delivery, quality of service, and adherence to contractual terms. A history of successful contract completion suggests a lower risk profile for this current award, whereas a pattern of issues might indicate potential future challenges.

How does the per-unit cost of this contract compare to similar deep-sea freight transportation services?

Determining the per-unit cost benchmark for this $144 million contract requires defining a relevant unit, such as cost per ton-mile, cost per voyage, or cost per vessel day. Without this specific metric and comparable data from other government or commercial contracts for similar routes and cargo types, a precise benchmark is difficult. However, the fixed-price award fee structure suggests the government aims for cost efficiency while incentivizing performance. If the contractor consistently achieves award fees, it implies they are meeting or exceeding performance expectations within the negotiated price. A detailed analysis would involve comparing the contractor's proposed rates against market data and historical government rates for comparable services.

What are the primary risks associated with this deep-sea freight transportation contract?

Key risks for this contract include operational disruptions due to weather, geopolitical instability affecting shipping lanes, or mechanical failures of vessels. There's also a risk related to fluctuating fuel prices, which could impact profitability if not adequately managed within the contract's pricing structure. Performance risk is present, particularly concerning the achievement of award fee criteria, which could lead to reduced contractor earnings but potentially impact service levels if incentives are misaligned. Furthermore, reliance on a single contractor for critical logistics could pose a supply chain vulnerability if unforeseen issues arise with Patriot Contract Services, LLC.

What is the expected effectiveness of the fixed-price award fee structure in ensuring value for money?

The effectiveness of the fixed-price award fee structure hinges on the clarity and attainability of the performance objectives. If well-defined metrics are established for factors like on-time delivery, cargo condition, fuel efficiency, and vessel maintenance, the structure can incentivize the contractor to exceed baseline requirements, thereby enhancing value for money. Conversely, if the objectives are vague or easily met, the award fee might not drive significant performance improvements, potentially leading to suboptimal value. Regular performance reviews and transparent communication between the Navy and Patriot Contract Services, LLC are essential for the successful implementation of this incentive mechanism.

How does this contract's value compare to historical spending on similar deep-sea freight services by the Department of the Navy?

To assess this contract's value against historical spending, one would need to analyze the Department of the Navy's expenditures on deep-sea freight transportation over previous years. This involves identifying similar contracts awarded by the Navy or other branches for comparable services, noting their duration, scope, and total value. Trends in pricing, volume of services procured, and the number of active contracts can indicate whether the current $144 million award represents an increase, decrease, or stable level of spending. Factors such as inflation, changes in operational requirements, and market capacity shifts would need to be considered when making historical comparisons.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3220522R4119

Offers Received: 2

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Address: 1320 WILLOW PASS RD, CONCORD, CA, 94520

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $187,299,064

Exercised Options: $187,299,064

Current Obligation: $144,118,927

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline