DoD's $12.3M Deep Sea Freight Contract with Maersk Line, Limited Faces Scrutiny for Limited Competition
Contract Overview
Contract Amount: $12,336,209 ($12.3M)
Contractor: Maersk Line, Limited
Awarding Agency: Department of Defense
Start Date: 2025-08-01
End Date: 2025-08-31
Contract Duration: 30 days
Daily Burn Rate: $411.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 25
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Transportation
Official Description: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS.
Plain-Language Summary
Department of Defense obligated $12.3 million to MAERSK LINE, LIMITED for work described as: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS. Key points: 1. The contract value of $12.3 million for deep sea freight transportation is significant. 2. Competition appears limited, raising questions about price discovery and potential overspending. 3. The fixed-price with economic price adjustment structure introduces risk related to fluctuating costs. 4. This falls within the Transportation sector, a critical area for DoD logistics.
Value Assessment
Rating: questionable
The contract's fixed-price with economic price adjustment (FPEPA) structure can lead to cost overruns if not carefully managed. Benchmarking against similar deep sea freight contracts is difficult without more granular data on routes and services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a potentially restricted bidding process. This method may limit competitive pressure, potentially impacting the final price achieved for the government.
Taxpayer Impact: The limited competition raises concerns about whether taxpayers are receiving the best possible value for these essential transportation services.
Public Impact
Ensures critical Department of Defense supply chain operations continue. Potential for increased costs due to economic price adjustment clauses. Limited competition may not reflect the most cost-effective solutions for taxpayers. Reliability of deep sea freight is crucial for national security readiness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Economic price adjustment
- Lack of small business participation
Positive Signals
- Essential service for DoD
- Defined contract period
Sector Analysis
This contract falls under the Transportation sector, specifically deep sea freight. Spending in this area is vital for global logistics and military deployment. Benchmarks for similar contracts are highly variable based on route, vessel size, and service level.
Small Business Impact
The data provided does not indicate any specific set-aside for small businesses, and the prime contractor is a large entity. This suggests a lack of opportunity for small businesses in this particular contract.
Oversight & Accountability
The award method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' warrants further review to ensure adequate justification for limiting the competitive pool. Oversight should focus on the management of the economic price adjustment clause.
Related Government Programs
- Deep Sea Freight Transportation
- Department of Defense Contracting
- USTRANSCOM Programs
Risk Flags
- Limited competition may lead to higher costs.
- Economic price adjustment clause introduces cost uncertainty.
- Lack of small business participation.
- Potential for contractor inefficiencies to be passed on via EPA.
Tags
deep-sea-freight-transportation, department-of-defense, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.3 million to MAERSK LINE, LIMITED. CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS.
Who is the contractor on this award?
The obligated recipient is MAERSK LINE, LIMITED.
Which agency awarded this contract?
Awarding agency: Department of Defense (USTRANSCOM).
What is the total obligated amount?
The obligated amount is $12.3 million.
What is the period of performance?
Start: 2025-08-01. End: 2025-08-31.
What specific factors justified the exclusion of sources in this full and open competition, and how were these justified to ensure fair pricing?
The justification for excluding sources in a 'full and open competition after exclusion of sources' award typically involves demonstrating that only specific sources can meet unique requirements, such as specialized equipment, security clearances, or proprietary technology. Without this specific justification, the exclusion raises concerns about whether the government received the most competitive pricing available in the market.
How will the economic price adjustment (EPA) clause be monitored to mitigate potential cost increases and ensure taxpayer value?
Monitoring the EPA clause requires establishing clear baseline indices for price adjustments and regularly verifying their accuracy. The contracting officer must actively track market fluctuations against these indices and ensure that any price increases are directly attributable to documented economic factors, not contractor inefficiencies or market manipulation.
What is the projected impact of this contract on the overall efficiency and cost-effectiveness of DoD's deep sea freight transportation?
The projected impact is mixed. While securing a large carrier like Maersk ensures capacity, the limited competition and EPA clause introduce risks of higher costs than potentially achievable through broader competition. The efficiency will depend heavily on the contractor's performance and the government's diligent oversight of the EPA.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 25
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
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, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $12,336,209
Exercised Options: $12,336,209
Current Obligation: $12,336,209
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HTC71124DW010
IDV Type: IDC
Timeline
Start Date: 2025-08-01
Current End Date: 2025-08-31
Potential End Date: 2025-08-31 00:00:00
Last Modified: 2025-09-22
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