DoD's $59M Commercial Transportation Rental Contract Awarded to MAERSK LINE, LIMITED
Contract Overview
Contract Amount: $59,235,286 ($59.2M)
Contractor: Maersk Line, Limited
Awarding Agency: Department of Defense
Start Date: 2000-09-06
End Date: 2005-12-15
Contract Duration: 1,926 days
Daily Burn Rate: $30.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: FIRM FIXED PRICE
Sector: Transportation
Place of Performance
Location: VIRGINIA BEACH, VIRGINIA BEACH (CITY) County, VIRGINIA, 23458
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $59.2 million to MAERSK LINE, LIMITED for work described as: Key points: 1. Significant contract value of $59.2 million over its period of performance. 2. MAERSK LINE, LIMITED is a major player in global shipping, indicating strong industry presence. 3. The contract's duration (1926 days) suggests a long-term need for these services. 4. Rental and leasing of commercial transportation equipment falls under a broad sector with diverse applications.
Value Assessment
Rating: fair
The contract value of $59.2 million over approximately 5 years is substantial. Benchmarking against similar large-scale transportation equipment rental contracts is difficult without more specific service details, but the price appears reasonable for the scale and duration.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing as multiple vendors are allowed to bid.
Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring the government receives the best possible pricing through market forces.
Public Impact
Ensures continued availability of commercial transportation equipment for Navy operations. Supports global logistics and supply chain needs for the Department of Defense. Potential impact on commercial shipping rates due to significant government demand. MAERSK LINE's involvement highlights the reliance on private sector capabilities for military support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to price escalation if not managed.
- Dependence on a single large vendor for critical transportation assets.
- Potential for scope creep or unexercised options increasing final cost.
Positive Signals
- Awarded through full and open competition.
- Firm Fixed Price contract type limits cost risk to the government.
- Experienced vendor with significant market share.
Sector Analysis
This contract falls within the commercial transportation equipment rental and leasing sector, which is vital for logistics and supply chain operations. Spending benchmarks in this area are highly variable based on equipment type, duration, and geographic scope.
Small Business Impact
The data indicates this contract was not set aside for small businesses, suggesting large prime contractors were expected to compete and potentially subcontract. Further analysis would be needed to determine small business participation through subcontracting.
Oversight & Accountability
The contract was awarded by the Department of the Navy under the Department of Defense. Standard oversight mechanisms for large contracts would apply, including performance monitoring and financial reviews.
Related Government Programs
- Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for price escalation over the long contract duration.
- Dependence on a single large vendor.
- Lack of specific equipment details hinders precise value analysis.
- Unclear definition of 'break-even' cost for benchmarking.
Tags
commercial-air-rail-and-water-transporta, department-of-defense, va, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.2 million to MAERSK LINE, LIMITED. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is MAERSK LINE, LIMITED.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $59.2 million.
What is the period of performance?
Start: 2000-09-06. End: 2005-12-15.
What specific types of commercial transportation equipment are being rented or leased under this contract?
The provided data does not specify the exact types of commercial transportation equipment. This could range from trucks and trailers to specialized vessels or railcars. Understanding the specific assets is crucial for a precise value assessment and risk evaluation, as different equipment has vastly different rental costs and operational requirements.
How does the 'break-even' cost of $30,756 compare to industry standards for similar rental agreements?
The 'break-even' cost of $30,756 is a unique data point that requires context. Without knowing if this represents a per-unit cost, a monthly cost, or a total cost for a specific duration, it's impossible to benchmark against industry standards. If it's a per-unit cost, it could be high or low depending on the equipment type and lease terms.
What is the potential impact of MAERSK LINE's dominant market position on future contract negotiations or pricing?
MAERSK LINE's significant market share could potentially reduce competitive pressure in future solicitations if fewer large players are capable or willing to bid. While this contract was awarded competitively, sustained reliance on a dominant provider might lead to less favorable terms in subsequent procurements if competition dwindles.
Industry Classification
NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 14
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: A.P. Møller - Mærsk A/S (UEI: 305391054)
Address: 120 CORPORATE BLVD, NORFOLK, VA, 03
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2000-09-06
Current End Date: 2005-12-15
Potential End Date: 2005-12-15 00:00:00
Last Modified: 2013-05-16
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