DoD's $526M T-AGS Operation and Maintenance Contract Awarded to U.S. Marine Management, LLC

Contract Overview

Contract Amount: $526,175,752 ($526.2M)

Contractor: U.S. Marine Management, LLC

Awarding Agency: Department of Defense

Start Date: 2009-07-20

End Date: 2017-12-07

Contract Duration: 3,062 days

Daily Burn Rate: $171.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE AWARD FEE

Sector: Defense

Official Description: T-AGS OPERATION AND MAINTENACE.

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23501

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $526.2 million to U.S. MARINE MANAGEMENT, LLC for work described as: T-AGS OPERATION AND MAINTENACE. Key points: 1. Contract value of over half a billion dollars over its lifecycle. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. Long contract duration of over 8 years indicates a significant, ongoing need. 4. Fixed Price Award Fee contract type implies performance incentives. 5. The contract supports deep sea freight transportation services. 6. Primarily serves the Department of the Navy within the Defense sector. 7. The contract was awarded to a single entity, U.S. Marine Management, LLC.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and detailed cost breakdowns. The total award amount of $526 million over approximately 8 years suggests an average annual spend of around $65 million. This figure needs to be compared against the cost of similar deep sea freight transportation services, considering vessel types, routes, and operational complexities. The 'Award Fee' component indicates that the final price could vary based on performance, making a direct price-to-value assessment difficult without knowing the awarded fees.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bids suggests a reasonable level of competition for these specialized services. However, the fact that it resulted in a definitive contract awarded to a single entity implies that U.S. Marine Management, LLC was selected as the most advantageous offer.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service quality. It ensures that the government explores a wide range of options before selecting a contractor.

Public Impact

The U.S. Marine Management, LLC benefits from a significant, long-term contract. The Department of the Navy receives essential deep sea freight transportation services. The contract supports the logistical capabilities of the U.S. military. Potential workforce implications for maritime professionals and support staff. Services likely support global deployment and supply chain operations for naval forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed effectively.
Award Fee structure requires careful monitoring to ensure fair compensation for performance.
Reliance on a single contractor for critical transportation services presents a potential risk.
Limited public information on specific performance metrics and cost drivers.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Fixed Price Award Fee structure incentivizes contractor performance.
Contract supports essential military logistics and operations.
Long-term nature suggests a stable and predictable service provision.

Sector Analysis

The defense sector, particularly maritime operations, relies heavily on specialized transportation services for global reach and logistical support. Deep sea freight transportation is a critical component of military readiness, enabling the movement of personnel, equipment, and supplies across vast distances. This contract falls within the broader category of logistics and transportation services, a significant area of government spending. Comparable spending benchmarks would involve analyzing other large-scale maritime support contracts within the Department of Defense and other federal agencies.

Small Business Impact

There is no indication that this contract included small business set-asides, as the 'sb' field is false. The large value and specialized nature of deep sea freight transportation may limit direct participation by small businesses, though they could potentially serve as subcontractors. Further analysis would be needed to determine if U.S. Marine Management, LLC has a subcontracting plan that benefits small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The 'Award Fee' component suggests performance monitoring is in place. Transparency is facilitated by contract award databases, but detailed operational performance and cost justifications may be less accessible to the public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Sealift Command Contracts
Department of Defense Transportation Services
Naval Logistics Support
Maritime Freight Services
Defense Logistics Agency Contracts

Risk Flags

Long contract duration
Single awardee for critical service
Potential for vendor lock-in
Award Fee structure requires diligent oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $526.2 million to U.S. MARINE MANAGEMENT, LLC. T-AGS OPERATION AND MAINTENACE.

Who is the contractor on this award?

The obligated recipient is U.S. MARINE MANAGEMENT, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $526.2 million.

What is the period of performance?

Start: 2009-07-20. End: 2017-12-07.

What is the historical spending pattern for T-AGS Operation and Maintenance services by the Department of the Navy?

Analyzing historical spending for T-AGS Operation and Maintenance requires examining past contracts awarded for similar services. The current contract, valued at over $526 million and spanning from 2009 to 2017, represents a significant investment. To understand the pattern, one would need to identify previous contracts for T-AGS operations, their values, durations, and the contractors involved. This would reveal trends in annual spending, potential increases or decreases in demand, and the stability of the market. For instance, if previous contracts were significantly smaller or shorter, it might indicate an increased reliance on these services or a change in operational scope. Conversely, consistent large-value contracts would suggest a sustained need. Without access to a comprehensive historical database of these specific T-AGS contracts, a precise spending pattern cannot be definitively established, but the longevity and value of this single award suggest a substantial and ongoing requirement.

How does the performance of U.S. Marine Management, LLC on this contract compare to industry benchmarks for deep sea freight transportation?

Assessing the performance of U.S. Marine Management, LLC against industry benchmarks for this specific contract is challenging without detailed performance data, which is often not publicly disclosed. The contract type, Fixed Price Award Fee (FPAF), implies that performance was evaluated against predefined criteria, and the contractor received a fee based on that evaluation. To benchmark effectively, one would need access to these evaluation reports and compare them to metrics such as on-time delivery rates, fuel efficiency, vessel maintenance schedules, safety records (e.g., incident rates), and compliance with environmental regulations. Industry benchmarks for these metrics vary by vessel type, route, and operational scope. If U.S. Marine Management, LLC consistently achieved high award fees, it would suggest strong performance relative to the contract's specific requirements. However, without comparative data on other similar government or commercial contracts, it's difficult to definitively state how their performance stacks up against the broader industry.

What are the key risks associated with a single contractor holding such a large and long-duration contract for critical transportation services?

A significant risk associated with a single contractor holding a large, long-duration contract for critical services like deep sea freight transportation is the potential for reduced competition and complacency. Over time, the contractor may face less pressure to innovate or optimize costs, knowing that replacing them would be a complex and costly undertaking for the government. This can lead to price creep or a decline in service quality if oversight is not rigorous. Furthermore, the government becomes highly dependent on this single entity; any disruption to the contractor's operations, such as financial instability, labor disputes, or major accidents, could severely impact military logistics and national security. Mitigating these risks requires robust contract management, continuous performance monitoring, clear contingency planning, and potentially exploring options for breaking down future requirements into smaller, more competitive contracts.

What is the estimated value of the 'Award Fee' component, and how is it determined?

The specific value of the 'Award Fee' component for the T-AGS Operation and Maintenance contract awarded to U.S. Marine Management, LLC is not detailed in the provided data. In an Award Fee contract, a portion of the total potential contract value is designated as an award fee, which the contractor can earn based on performance exceeding minimum requirements. The determination of this fee is typically based on a subjective evaluation by the government against pre-defined criteria outlined in the contract's Performance Work Statement (PWS) and Award Fee Plan. These criteria often relate to factors like timeliness, quality of service, cost control, and responsiveness. The contractor submits justifications for the fee earned, and the government contracting officer makes the final determination. Without the specific Award Fee Plan and performance evaluations, it's impossible to quantify the earned fee or its impact on the total $526 million award.

How does the 'Deep Sea Freight Transportation' service requirement align with the U.S. Marine Management, LLC's core competencies?

The contract data indicates that U.S. Marine Management, LLC was awarded a contract for 'Deep Sea Freight Transportation' services, aligning directly with the company's name and implied specialization. While the provided data doesn't detail the company's full range of services or historical projects, the award itself suggests that the Department of the Navy assessed U.S. Marine Management, LLC as possessing the necessary expertise, assets (such as vessels), and operational capabilities to fulfill these demanding requirements. Deep sea freight transportation involves managing large vessels, navigating international waters, handling complex logistics, ensuring cargo safety, and complying with maritime regulations. A company specializing in this area would typically have experience in fleet management, chartering, port operations, and international shipping. The successful award of a significant contract like this implies a strong alignment between the service requirement and the contractor's core business.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0003308R2504

Offers Received: 5

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

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

Address: ONE COMMERCIAL PL 20TH FL, NORFOLK, VA, 23510

Business Categories: Category Business, Limited Liability Corporation, Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $526,192,181

Exercised Options: $526,192,181

Current Obligation: $526,175,752

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline