DoD's $11.8M Deep Sea Freight Transportation contract awarded to Maersk Line, Limited

Contract Overview

Contract Amount: $11,812,455 ($11.8M)

Contractor: Maersk Line, Limited

Awarding Agency: Department of Defense

Start Date: 2025-11-01

End Date: 2025-11-30

Contract Duration: 29 days

Daily Burn Rate: $407.3K/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 $11.8 million to MAERSK LINE, LIMITED for work described as: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS. Key points: 1. The contract value represents a significant investment in global logistics capabilities. 2. Competition was conducted after excluding sources, suggesting potential limitations in market reach. 3. The fixed-price structure with economic price adjustment introduces some cost volatility. 4. Performance is benchmarked against similar freight transportation services. 5. This contract positions Maersk Line, Limited as a key provider for USTRANSCOM's shipping needs. 6. The duration of 29 days indicates a focus on specific, short-term transportation requirements.

Value Assessment

Rating: fair

The awarded amount of $11.8 million for a 29-day delivery order appears substantial for a single month of service. Benchmarking against similar deep sea freight transportation contracts is crucial to determine if this represents a competitive rate. The fixed-price with economic price adjustment (FPEPA) contract type introduces a degree of uncertainty in the final cost, as fuel and other economic factors can fluctuate. Without more granular data on the volume and specific routes, a definitive value-for-money assessment is challenging, but the scale suggests a need for efficient pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This procurement method indicates that while competition was sought, certain potential bidders were excluded from the outset. The number of bidders (25) is a positive sign of interest, but the exclusion of sources raises questions about the breadth of competition and its potential impact on achieving the most favorable pricing. Further details on the rationale for excluding sources would be needed for a complete understanding.

Taxpayer Impact: The exclusion of certain sources may limit the potential for taxpayers to benefit from the widest possible competitive pricing, potentially leading to higher costs than if all qualified vendors had been allowed to bid.

Public Impact

The Department of Defense (DoD) benefits through the reliable and efficient transportation of goods. Services delivered include deep sea freight transportation, critical for global military operations. The geographic impact is global, supporting the DoD's worldwide logistical requirements. Workforce implications are indirect, primarily supporting the maritime shipping industry and related logistics sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition due to exclusion of sources may impact price discovery.
Economic price adjustment clause introduces potential for cost overruns.
Lack of detailed performance metrics makes assessing efficiency difficult.

Positive Signals

Award to a known entity (Maersk Line, Limited) suggests reliability.
A significant number of bidders (25) indicates market interest.
Contract supports critical DoD transportation needs.

Sector Analysis

Deep sea freight transportation is a vital component of global commerce and military logistics. The market is characterized by large, established carriers and specialized freight forwarders. This contract fits within the broader defense logistics and transportation sector, where government agencies rely on commercial shipping capabilities for deployment and resupply. Comparable spending benchmarks would involve analyzing other large-scale government shipping contracts and commercial freight rates for similar routes and vessel types.

Small Business Impact

The contract does not indicate any specific small business set-asides (ss=false, sb=false). Maersk Line, Limited is a large corporation, and it is unlikely that significant subcontracting opportunities for small businesses would be mandated or readily available under this specific delivery order for deep sea freight. The primary impact on the small business ecosystem would be indirect, through the general demand for maritime services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of USTRANSCOM's contracting and program management offices. Accountability measures would be tied to the delivery order's terms and conditions, including timely delivery and adherence to shipping specifications. Transparency is facilitated by public contract databases, but detailed operational oversight and Inspector General jurisdiction would focus on performance and financial integrity throughout the contract lifecycle.

Related Government Programs

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

Risk Flags

Limited competition due to source exclusion.
Potential for cost escalation via economic price adjustment.
Short contract duration may indicate episodic needs or reliance on other vehicles.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.8 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 $11.8 million.

What is the period of performance?

Start: 2025-11-01. End: 2025-11-30.

What is the historical spending pattern for deep sea freight transportation by USTRANSCOM?

USTRANSCOM, as the primary logistics command for the Department of Defense, consistently awards significant contracts for deep sea freight transportation. Historical data reveals a pattern of substantial annual spending in this category, often exceeding hundreds of millions of dollars, to support global military operations. This spending fluctuates based on geopolitical events, deployment tempos, and the specific needs of various military branches. Contracts are typically awarded through competitive processes, though specific procurement strategies like full and open competition after exclusion of sources, as seen in this instance, can vary. Analyzing past awards to Maersk Line, Limited and other major carriers provides context for the current contract's value and duration, highlighting trends in pricing, service scope, and contract types utilized.

How does the pricing of this contract compare to similar deep sea freight transportation services?

A direct comparison of pricing for this $11.8 million, 29-day delivery order is challenging without specific route, cargo volume, and vessel type details. However, the contract's Fixed Price with Economic Price Adjustment (FPEPA) structure suggests that while a base price was set, adjustments are anticipated for fluctuations in fuel costs and other economic factors. Benchmarking would involve comparing the per-unit cost (e.g., per TEU-mile or per ton-mile) against historical USTRANSCOM awards, industry rate indices (like the Baltic Dry Index for bulk cargo, or specific container shipping indices), and rates offered by other major carriers for comparable services. The exclusion of sources in the competition may have limited the number of price points available, potentially impacting the competitiveness of the final negotiated rate.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks for the Department of Defense (DoD) in this contract revolve around potential cost increases due to the economic price adjustment clause, especially in volatile fuel markets. Another risk stems from the 'full and open competition after exclusion of sources' procurement method; if the excluded sources represented significant capacity or competitive alternatives, the DoD might not have secured the most advantageous terms. Performance risks, though mitigated by awarding to a known entity like Maersk Line, Limited, always exist in complex logistics operations, including delays, cargo damage, or vessel availability issues. Finally, the limited duration of the delivery order suggests a need for potentially frequent re-competition or modification, introducing administrative burden and potential continuity risks if not managed proactively.

What is the track record of Maersk Line, Limited in performing similar government contracts?

Maersk Line, Limited has a substantial and well-established track record in providing global shipping and logistics services, including significant work with government entities like the Department of Defense. They are a major player in the international maritime industry, operating a vast fleet and extensive network. Historically, Maersk has been a frequent awardee of large-scale transportation contracts from various government agencies, including USTRANSCOM, for both routine and contingency operations. While specific performance metrics for individual contracts are often proprietary, their continued success in securing and performing such contracts suggests a generally reliable operational capability and adherence to contractual obligations. Any past performance issues would typically be documented within government contract performance databases (e.g., CPARS), which are not publicly detailed here.

How does this contract contribute to the overall mission effectiveness of USTRANSCOM?

This contract directly contributes to the mission effectiveness of USTRANSCOM by ensuring the availability of critical deep sea freight transportation capacity. USTRANSCOM's core mission is to provide global transportation and deployment capabilities for the DoD, enabling the movement of personnel, equipment, and supplies across the globe. Reliable access to ocean freight is fundamental to this mission, supporting everything from routine supply chain operations to rapid force projection during crises. By securing services through this contract, USTRANSCOM can meet its logistical demands, ensuring that military units receive the necessary resources to operate effectively, regardless of their geographic location. The specific nature of the delivery order suggests it addresses a defined, immediate transportation requirement.

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: $11,812,455

Exercised Options: $11,812,455

Current Obligation: $11,812,455

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71124DW010

IDV Type: IDC

Timeline