DoD's $16.4M Deep Sea Freight Transportation contract awarded to Maersk Line, Limited

Contract Overview

Contract Amount: $16,409,646 ($16.4M)

Contractor: Maersk Line, Limited

Awarding Agency: Department of Defense

Start Date: 2025-09-01

End Date: 2025-09-30

Contract Duration: 29 days

Daily Burn Rate: $565.9K/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 $16.4 million to MAERSK LINE, LIMITED for work described as: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces potential for cost fluctuations. 3. The contract duration of 29 months indicates a medium-term need for these services. 4. Maersk Line, Limited, a significant player in global shipping, is the awardee. 5. The contract falls under the Defense sector, specifically USTRANSCOM, highlighting its strategic importance. 6. A high number of 25 offers received suggests strong market interest and a robust competitive landscape.

Value Assessment

Rating: good

The contract value of $16.4 million for approximately 29 months of deep sea freight transportation appears reasonable given the nature of global logistics. Benchmarking against similar large-scale transportation contracts managed by USTRANSCOM would provide a more precise value-for-money assessment. The FPEPA pricing structure, while common in the industry to account for fuel and other variable costs, warrants monitoring to ensure economic adjustments remain fair and do not lead to excessive overruns.

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 while the initial solicitation might have had some exclusions, the final award was made through a broad competitive process. The receipt of 25 offers is a strong positive signal, demonstrating significant interest from multiple providers in the market. This level of competition is generally conducive to achieving competitive pricing and ensuring that the government receives a fair market value for the services rendered.

Taxpayer Impact: A high number of bidders typically translates to better price discovery and potentially lower costs for taxpayers, as companies vie to offer the most attractive terms.

Public Impact

The Department of Defense benefits from reliable and efficient deep sea freight transportation services, crucial for logistical operations. This contract ensures the movement of goods and equipment, supporting military readiness and global deployment capabilities. The services provided are essential for maintaining supply chains that can span intercontinental distances. While specific geographic impacts are not detailed, deep sea freight inherently involves global maritime routes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost increases due to the 'Economic Price Adjustment' clause in the FPEPA contract.
Reliance on a single large provider, Maersk Line, Limited, could pose risks if service disruptions occur.
The complexity of international shipping introduces inherent risks related to delays, customs, and geopolitical factors.

Positive Signals

Awarded through full and open competition, indicating a competitive market and likely fair pricing.
The large number of offers (25) suggests a healthy and active market for these services.
Maersk Line, Limited is a well-established global shipping company with extensive experience.

Sector Analysis

The deep sea freight transportation sector is a critical component of global commerce and national security logistics. This contract falls within the broader transportation and logistics industry, which is characterized by large, established players and complex operational requirements. Spending in this area by the Department of Defense is substantial, reflecting the need for robust international shipping capabilities. Comparable spending benchmarks would involve analyzing other large-scale freight contracts awarded by DoD and other federal agencies for similar services.

Small Business Impact

There is no indication that this contract includes specific small business set-asides. Given the nature of deep sea freight transportation, which typically requires large vessels and extensive global infrastructure, it is less likely to be segmented for small business participation directly. However, Maersk Line, Limited may engage small businesses for ancillary services or subcontracting opportunities related to port operations or specialized cargo handling.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Transportation Command (USTRANSCOM), which is responsible for managing global mobility requirements for the Department of Defense. Accountability measures would include performance metrics, delivery schedules, and adherence to contractual terms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Sealift Command Contracts
Global Freight Forwarding Services
Department of Defense Transportation Services
Ocean Freight Services
International Shipping Contracts

Risk Flags

Economic Price Adjustment Clause
Potential for Service Disruptions
Reliance on Single Large Provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.4 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 $16.4 million.

What is the period of performance?

Start: 2025-09-01. End: 2025-09-30.

What is Maersk Line, Limited's track record with the Department of Defense?

Maersk Line, Limited has a significant history of contracting with the Department of Defense, particularly through USTRANSCOM, for various ocean transportation services. They are a major global carrier and frequently awarded contracts for moving military cargo. Their experience includes providing containerized, refrigerated, and specialized cargo transport across various theaters of operation. Past performance reviews and contract histories available through federal procurement databases would offer more granular detail on their specific performance metrics, on-time delivery rates, and any past issues or commendations related to DoD contracts. Their established presence suggests a generally reliable, though potentially high-cost, provider for large-scale military logistics needs.

How does the pricing of this contract compare to similar DoD deep sea freight contracts?

Direct comparison of the $16.4 million total value for a 29-month period requires detailed analysis of the specific services, routes, vessel types, and cargo volumes. However, given Maersk's position as a major carrier, their pricing is likely competitive within the large-scale, full-service ocean freight market. The 'Fixed Price with Economic Price Adjustment' (FPEPA) structure is common for long-term shipping contracts to account for volatile fuel costs and other market fluctuations. To assess value, one would benchmark the per-container or per-ton-mile rates against other DoD contracts for similar lanes and service levels, adjusting for contract duration and economic factors. The 25 offers received suggest the pricing is perceived as fair market value by a competitive set of providers.

What are the primary risks associated with this specific contract?

The primary risks include potential cost escalations due to the Economic Price Adjustment (EPA) clause, which can be influenced by global fuel prices and currency exchange rates. Service disruptions, though unlikely with a major carrier like Maersk, remain a risk in international shipping due to weather, geopolitical events, port congestion, or labor issues. The reliance on a single awardee for a significant portion of deep sea freight needs could also pose a risk if unforeseen circumstances impact Maersk's ability to perform. Furthermore, the complexity of international logistics introduces inherent delays and potential for cargo damage or loss, requiring robust tracking and insurance protocols.

How effective is USTRANSCOM in managing large-scale transportation contracts like this?

USTRANSCOM is generally considered highly effective in managing large-scale transportation contracts, as it is their core mission. They possess specialized expertise in global logistics, fleet operations, and contracting within the defense sector. Their effectiveness is demonstrated by their ability to support military operations worldwide, often under challenging conditions. However, like any large organization, effectiveness can vary. Success relies on rigorous contract oversight, performance monitoring, and the ability to adapt to changing operational requirements and market conditions. The competitive nature of this award suggests USTRANSCOM's contracting processes are designed to attract robust participation.

What is the historical spending trend for deep sea freight transportation by the DoD?

Historical spending by the DoD on deep sea freight transportation has been substantial and consistent, reflecting the ongoing global presence and operational tempo of the U.S. military. Annual expenditures can fluctuate based on geopolitical events, deployment levels, and specific operational needs. USTRANSCOM, as the primary contracting entity, manages billions of dollars annually in transportation and logistics services. Trends often show a mix of long-term contracts for baseline capacity and shorter-term awards for surge requirements. Factors like fuel prices, international trade dynamics, and the availability of commercial shipping capacity also influence spending patterns and contract values over time.

What is the significance of the 'Delivery Order' award type for this contract?

The 'Delivery Order' (DO) award type, under a larger contract vehicle (likely an Indefinite Delivery/Indefinite Quantity or IDIQ contract, though not explicitly stated here), signifies that this is one specific task order issued against a pre-negotiated agreement. This approach allows the government to procure services incrementally as needed, providing flexibility. For deep sea freight, it means this order likely covers a specific period or set of shipments. The underlying contract would have established terms, conditions, and pricing, with the delivery order detailing the specific quantities, delivery locations, and timelines for this particular requirement. This method is common for services with variable demand.

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: $16,409,646

Exercised Options: $16,409,646

Current Obligation: $16,409,646

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71124DW010

IDV Type: IDC

Timeline