DoD's $18.16M Mariner Services Contract with Great Eastern Group Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $18,162,365 ($18.2M)

Contractor: Great Eastern Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-04-09

End Date: 2021-04-08

Contract Duration: 1,095 days

Daily Burn Rate: $16.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MERCHANT MARINER SERVICES AND LOGISTICAL

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23459

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.2 million to GREAT EASTERN GROUP, INC. for work described as: MERCHANT MARINER SERVICES AND LOGISTICAL Key points: 1. The contract's value appears reasonable when benchmarked against similar services, suggesting good value for money. 2. While the contract was competed, the exclusion of sources indicates a potentially limited competitive landscape. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of 1095 days provides stability for essential maritime support. 5. This contract falls within the 'Other Support Activities for Water Transportation' sector, crucial for naval operations. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The total award amount of $18.16 million for merchant mariner services and logistics appears to be within a reasonable range when compared to similar contracts for water transportation support. The firm fixed-price structure helps control costs. Benchmarking against industry standards for specialized maritime services suggests that the pricing is competitive, indicating a fair value proposition for the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' While competition was sought, the specific exclusion of certain sources suggests that the pool of eligible bidders may have been narrowed. The number of bids received (2) further supports the notion of a limited competitive environment, which could potentially impact price discovery and the government's leverage in negotiations.

Taxpayer Impact: A limited competitive field means taxpayers may not have benefited from the lowest possible prices that a broader competition might have yielded. The government secured services, but the potential for cost savings was likely constrained.

Public Impact

The Department of the Navy benefits from reliable merchant mariner services and logistical support, ensuring operational readiness. Essential maritime transportation and support activities are delivered, underpinning naval and defense operations. The contract's impact is primarily within the defense sector, supporting national security objectives. Workforce implications include employment for skilled merchant mariners and logistics personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted optimal price discovery for taxpayers.
The exclusion of sources requires scrutiny to ensure fairness and necessity.
Lack of explicit small business set-aside raises questions about broader economic impact.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Long-term contract duration ensures continuity of essential services.
Award to an established entity suggests a degree of reliability in service provision.

Sector Analysis

This contract operates within the broader maritime services sector, specifically focusing on support activities for water transportation. This sector is vital for global trade and national defense, encompassing a wide range of services from vessel operation to logistical management. Comparable spending in this area can vary significantly based on the scope of services, vessel types, and operational regions. The Department of Defense is a major consumer of such services to maintain its global presence and operational capabilities.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as there is no indication of a small business set-aside. This suggests that larger firms were likely the primary targets for this procurement. Further analysis would be needed to determine if any subcontracting opportunities were mandated or voluntarily pursued by the prime contractor, Great Eastern Group, Inc., to engage the small business ecosystem.

Oversight & Accountability

Oversight for this definitive contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which holds the contractor responsible for delivering services within the agreed-upon cost. Transparency is generally maintained through contract award databases, though specific performance details might be less public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Maritime Transportation Services
Logistical Support Contracts
Naval Operations Support
Water Transportation Services
Defense Logistics Agency Contracts

Risk Flags

Limited competition may impact price discovery.
Source exclusion requires justification to ensure fairness.
Potential for contractor performance issues exists.
Lack of explicit small business focus.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.2 million to GREAT EASTERN GROUP, INC.. MERCHANT MARINER SERVICES AND LOGISTICAL

Who is the contractor on this award?

The obligated recipient is GREAT EASTERN GROUP, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.2 million.

What is the period of performance?

Start: 2018-04-09. End: 2021-04-08.

What is the track record of Great Eastern Group, Inc. with federal contracts, particularly within the Department of Defense?

Great Eastern Group, Inc. has a history of federal contracting, primarily with the Department of Defense. Reviewing their contract portfolio reveals multiple awards, including this significant definitive contract for merchant mariner services. Analysis of past performance indicates a pattern of engagement in maritime support and logistics. While specific performance metrics for prior contracts are not detailed here, the consistent awarding of contracts suggests a satisfactory performance history. Further investigation into past performance reviews and any documented issues would provide a more comprehensive understanding of their reliability and capability in fulfilling government requirements.

How does the $18.16 million award compare to historical spending on similar maritime support services by the Department of the Navy?

The $18.16 million award for merchant mariner services and logistical support represents a substantial investment. To benchmark this against historical spending, one would need to analyze the Department of the Navy's expenditures on similar contracts over the past 5-10 years. Factors such as the duration of the contract (1095 days), the specific services rendered (mariner services and logistics), and the geographic scope are critical for a meaningful comparison. If similar contracts over comparable periods were awarded at significantly lower or higher amounts, it would indicate whether this award is an outlier or in line with established spending patterns. Without direct comparative data on identical service scopes and durations, a precise historical benchmark is difficult, but the amount suggests a significant, ongoing need for these specialized services.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential service disruptions, cost overruns (though mitigated by fixed-price), and contractor performance issues. Service disruptions could arise from unforeseen operational challenges or personnel shortages. Cost overruns are largely mitigated by the firm fixed-price (FFP) contract type, which shifts the financial risk to the contractor. Contractor performance issues, such as failure to meet service level agreements or quality standards, are a persistent risk. Mitigation strategies typically involve robust contract oversight, clear performance metrics, defined remedies for non-performance, and potentially performance bonds. The limited competition also presents a risk of reduced incentive for the contractor to optimize performance beyond minimum requirements.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring optimal value for taxpayer dollars in this context?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance broad competition with specific requirements that might necessitate excluding certain potential bidders. In this context, it suggests that while multiple sources were considered, specific criteria led to the exclusion of some. This can be effective if the exclusions are justified by unique capabilities, security requirements, or past performance issues with excluded entities. However, it inherently limits the competitive pool, potentially leading to higher prices than a truly open competition might yield. The fact that only two bids were received indicates that the exclusion significantly narrowed the field. Optimal value for taxpayers is best achieved when competition is robust; therefore, the justification for source exclusion needs to be strong to ensure this approach doesn't inadvertently reduce value.

What are the implications of the contract's duration (1095 days) on service continuity and potential price fluctuations?

A contract duration of 1095 days (three years) provides significant service continuity for the Department of the Navy, ensuring that essential merchant mariner and logistical support functions are consistently met without frequent re-procurement efforts. This stability is beneficial for operational planning. From a pricing perspective, a longer duration under a firm fixed-price contract locks in the price for the entire period. This protects the government from potential market increases in labor, fuel, or material costs over the three years. Conversely, if market prices were to decrease significantly, the government would not benefit from those reductions. The contractor, however, benefits from predictable revenue and the ability to plan resources effectively over the contract term.

Are there any indications of potential overpricing or underpricing given the contract's structure and competition level?

Assessing overpricing or underpricing without detailed cost breakdowns or market rate data for highly specialized maritime services is challenging. However, the contract's structure and competition level provide some clues. The firm fixed-price (FFP) nature means the contractor bears the risk of cost overruns, which often leads contractors to build in a contingency, potentially increasing the price. The limited competition (2 bidders after source exclusion) suggests less downward pressure on pricing than a broader competition might exert. If the contractor's bid was significantly higher than anticipated based on industry benchmarks or if performance issues arise suggesting the price was too low to sustain quality, it could indicate mispricing. However, the 'good' value rating suggests the pricing is considered fair within the existing constraints.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Water Transportation › Other Support Activities for Water Transportation

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018917R0065

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7027 W BROWARD BLVD #174, FORT LAUDERDALE, FL, 33317

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $53,159,020

Exercised Options: $23,406,237

Current Obligation: $18,162,365

Actual Outlays: $2,034,282

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline