DoD's $166M Army Prepositioned Stock contract for watercraft services awarded to U.S. Marine Management, LLC

Contract Overview

Contract Amount: $166,000,486 ($166.0M)

Contractor: U.S. Marine Management, LLC

Awarding Agency: Department of Defense

Start Date: 2014-09-18

End Date: 2026-06-01

Contract Duration: 4,274 days

Daily Burn Rate: $38.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF ARMY PREPOSITIONED STOCK-4 JAPAN WATERCRAFT

Plain-Language Summary

Department of Defense obligated $166.0 million to U.S. MARINE MANAGEMENT, LLC for work described as: IGF::OT::IGF ARMY PREPOSITIONED STOCK-4 JAPAN WATERCRAFT Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of over 11 years (4274 days) indicates a long-term need for these services. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 4. The North American Industry Classification System (NAICS) code 561210 points to facilities support services. 5. The contract is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle. 6. The absence of small business set-aside flags suggests this was not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee (CPFF) structure, while allowing flexibility, carries inherent risks of cost escalation. The total award amount of $166 million over approximately 11 years suggests an average annual spend of around $15 million. This figure needs to be assessed against the scope and criticality of maintaining Army prepositioned watercraft, which is vital for rapid deployment capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit bids. The presence of 3 bids suggests a moderate level of competition for this requirement. While three bidders is better than one or two, it may not represent the full spectrum of potential providers in the market, potentially impacting price discovery.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by encouraging lower prices and better service offerings. However, the ultimate value depends on the effectiveness of the competition and the specific terms negotiated.

Public Impact

The U.S. Marine Corps benefits from the maintenance and readiness of its watercraft assets. Services delivered include the upkeep and operational readiness of critical watercraft for logistical support. The geographic impact is likely focused on locations where Army Prepositioned Stock is maintained, primarily overseas bases. Workforce implications include employment opportunities for personnel skilled in maritime maintenance and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to increase costs to maximize fee.
Long contract duration (over 11 years) increases the risk of scope creep and potential for cost increases over time.
Limited competition (3 bidders) may have resulted in a higher price than if more firms had participated.

Positive Signals

Awarded through full and open competition, maximizing the pool of potential offerors.
The contract supports critical military readiness by ensuring watercraft are operational.
The fixed fee component of the CPFF contract provides some cost certainty for the government.

Sector Analysis

The defense logistics and facilities support sector is characterized by long-term contracts and specialized service requirements. This contract fits within the broader category of base operations support and equipment maintenance for the Department of Defense. Spending in this area is substantial, driven by the need to maintain readiness and operational capabilities across global military installations. Comparable spending benchmarks would involve other large-scale maintenance and logistics contracts for military equipment and infrastructure.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements specifically for small businesses. This means that opportunities for small businesses to participate in this contract are likely limited to those that can partner with the prime contractor, U.S. Marine Management, LLC, or compete independently if they meet the qualifications. The absence of set-asides suggests the primary focus was on securing the most capable provider through open competition.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Accountability measures would be embedded in the contract's performance work statement (PWS) and delivery schedules. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Prepositioned Stock (APS)
Marine Corps Logistics Support
Watercraft Maintenance Contracts
Defense Facilities Support Services
Indefinite Delivery/Indefinite Quantity (IDIQ) Vehicles

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type carries inherent risk of cost overruns.
Long contract duration increases potential for scope creep and cost escalation.
Limited number of bidders may impact price competitiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $166.0 million to U.S. MARINE MANAGEMENT, LLC. IGF::OT::IGF ARMY PREPOSITIONED STOCK-4 JAPAN WATERCRAFT

Who is the contractor on this award?

The obligated recipient is U.S. MARINE MANAGEMENT, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $166.0 million.

What is the period of performance?

Start: 2014-09-18. End: 2026-06-01.

What is the historical spending trend for Army watercraft maintenance and prepositioned stock services?

Analyzing historical spending trends for Army watercraft maintenance and prepositioned stock services requires access to detailed historical contract data. Generally, spending in this area fluctuates based on geopolitical conditions, military readiness requirements, and modernization efforts. Factors such as the number of watercraft maintained, their operational tempo, and the complexity of maintenance tasks directly influence costs. Without specific historical data for this particular contract vehicle or similar ones, it's difficult to provide precise figures. However, it's reasonable to assume that sustained global military presence and the need for rapid deployment capabilities necessitate consistent, significant investment in maintaining these assets over time. Trends may also reflect shifts in technology, regulatory requirements, and the increasing reliance on contracted services for specialized maintenance.

How does the per-unit cost of maintaining these watercraft compare to industry benchmarks?

Determining a precise per-unit cost for maintaining these watercraft and comparing it to industry benchmarks is complex due to the varied nature of watercraft, the scope of services, and the specific operational environment. 'Per-unit cost' could refer to cost per vessel, cost per operational hour, or cost per maintenance task. The contract's Cost Plus Fixed Fee (CPFF) structure, while providing flexibility, can obscure direct per-unit cost comparisons without detailed breakdowns of direct costs and the fixed fee. Industry benchmarks for maritime vessel maintenance vary significantly based on vessel size, type, age, and the level of maintenance required (e.g., routine, intermediate, depot). To perform a robust comparison, one would need to isolate specific maintenance activities (e.g., engine overhaul, hull repair, systems checks) and benchmark those against commercial equivalents, adjusting for military-specific requirements and operational tempo. The limited competition (3 bidders) also makes it harder to ascertain if the pricing reflects optimal market rates.

What are the key performance indicators (KPIs) used to evaluate U.S. Marine Management, LLC's performance under this contract?

Key Performance Indicators (KPIs) for a contract of this nature, focused on maintaining Army Prepositioned Stock watercraft, would likely revolve around readiness, availability, and quality of maintenance. Specific KPIs could include: Vessel Readiness Rate (percentage of watercraft available for deployment within a specified timeframe), Mean Time Between Failures (MTBF) for critical systems, Mean Time To Repair (MTTR) for common issues, adherence to scheduled maintenance timelines, and compliance with safety and environmental regulations. Quality assurance metrics might track the number of repeat deficiencies or the success rate of inspections. The contract's Performance Work Statement (PWS) would detail these KPIs, along with acceptable performance levels and any associated incentives or penalties. Effective oversight would involve regular performance reviews against these metrics.

What is the track record of U.S. Marine Management, LLC with similar government contracts?

U.S. Marine Management, LLC has a history of performing government contracts, primarily within the maritime and logistics sectors. A review of publicly available contract data indicates they have been awarded various contracts related to vessel operations, maintenance, and support services for different branches of the U.S. military. Their experience often includes managing vessel fleets, providing crewing services, and undertaking maintenance and repair work. Assessing their track record involves examining past performance evaluations, any documented instances of contract disputes or terminations, and their success in delivering services on time and within budget on previous engagements. While this specific $166 million contract represents a significant award, their prior work likely provides a basis for the Department of the Army's confidence in their capabilities.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this service?

The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility for services where the scope might evolve, carries inherent risks for the government. The primary risk is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. This structure can incentivize the contractor to increase costs, as the fee remains constant regardless of the total cost incurred. This can lead to cost overruns if not meticulously managed and overseen. For this $166 million watercraft maintenance contract, effective government oversight is crucial to scrutinize all claimed costs, ensure they are reasonable and allocable to the contract, and prevent unnecessary expenditures. Without stringent cost controls and performance monitoring, the total contract cost could significantly exceed initial estimates, diminishing the overall value for the taxpayer.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: A.P. Møller OG Hustru Chastine Mc-Kinney Møllers Fond TIL Almene Formaal

Address: 999 WATERSIDE DR, NORFOLK, VA, 23510

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $174,416,940

Exercised Options: $174,416,940

Current Obligation: $166,000,486

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: W52P1J14G0023

IDV Type: BOA

Timeline