DoD Awards $12M for 90-Day Deep Sea Freight Charter to Maersk Line

Contract Overview

Contract Amount: $12,045,300 ($12.0M)

Contractor: Maersk Line, Limited

Awarding Agency: Department of Defense

Start Date: 2008-03-05

End Date: 2010-05-21

Contract Duration: 807 days

Daily Burn Rate: $14.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: 90 DAY TIME CHARTER, MAERSK LINE, LIMITED

Place of Performance

Location: NORFOLK, NORFOLK (CITY) County, VIRGINIA, 23501

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to MAERSK LINE, LIMITED for work described as: 90 DAY TIME CHARTER, MAERSK LINE, LIMITED Key points: 1. Contract awarded to Maersk Line, a major player in global shipping. 2. The contract is for a 90-day time charter, indicating short-term operational needs. 3. Full and open competition was used, suggesting a robust price discovery process. 4. The service falls under Deep Sea Freight Transportation, a critical logistics sector.

Value Assessment

Rating: good

The award amount of $12,045,300 for an 807-day duration charter appears reasonable given the market for specialized shipping services. Benchmarking against similar time charters would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition is a positive indicator for price discovery. It allows multiple qualified vendors to bid, driving down costs and ensuring fair market value.

Taxpayer Impact: The competitive bidding process likely resulted in a fair price, minimizing unnecessary taxpayer expenditure for this essential transportation service.

Public Impact

Ensures critical military supply chain continuity for the Department of the Navy. Supports global deployment and operational readiness of naval forces. Provides essential transportation for personnel and equipment during the charter period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation if charter duration is extended.
Dependence on a single provider for a critical short-term need.

Positive Signals

Utilized full and open competition.
Awarded to a reputable and experienced carrier.
Addresses a specific, short-term operational requirement.

Sector Analysis

The Department of Defense relies heavily on the transportation sector for global logistics. Spending in this area is benchmarked against commercial rates and strategic necessity, with this contract fitting a short-term operational need.

Small Business Impact

This contract was awarded to Maersk Line, a large, established global shipping company. There is no indication of specific provisions or set-asides for small businesses in this procurement.

Oversight & Accountability

The contract was awarded under full and open competition, suggesting a standard procurement process. Oversight would focus on performance delivery and adherence to the firm fixed-price terms.

Related Government Programs

Deep Sea Freight Transportation
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for service disruption
Limited vendor pool for short-term needs
Market rate fluctuations
Dependence on specific vessel availability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to MAERSK LINE, LIMITED. 90 DAY TIME CHARTER, MAERSK LINE, LIMITED

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 $12.0 million.

What is the period of performance?

Start: 2008-03-05. End: 2010-05-21.

What is the cost per day for this charter, and how does it compare to industry averages for similar vessels and routes?

The total award is $12,045,300 over 807 days, resulting in a daily rate of approximately $14,926. This rate needs to be compared against current market benchmarks for similar 90-day time charters of comparable vessels in the relevant shipping lanes to assess its value.

What are the risks associated with relying on a single vendor for a critical, albeit short-term, transportation need?

The primary risk is service disruption if Maersk Line faces operational issues (e.g., vessel breakdown, labor disputes). While the duration is short, contingency planning for alternative carriers or expedited procurement processes would mitigate this risk.

How effectively does this charter support the Department of the Navy's operational readiness and mission objectives?

This charter directly supports operational readiness by ensuring the timely and reliable movement of assets. Its effectiveness is tied to the successful completion of the 90-day period without disruption, enabling the Navy to meet its logistical requirements.

Industry Classification

NAICS: Transportation and Warehousing › Deep Sea, Coastal, and Great Lakes Water Transportation › Deep Sea Freight Transportation

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: A.P. Møller - Mærsk A/S (UEI: 305391054)

Address: ONE COMMERCIAL PL 20TH FL, NORFOLK, VA, 03

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,045,300

Exercised Options: $12,045,300

Current Obligation: $12,045,300

Contract Characteristics

Cost or Pricing Data: NO

Timeline