DoD's $44.8M Deep Sea Freight Contract with Great Eastern Group Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $44,788,268 ($44.8M)

Contractor: Great Eastern Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-05-09

End Date: 2023-08-15

Contract Duration: 1,559 days

Daily Burn Rate: $28.7K/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: N103B/PM2; R. NORRIS; OSV FOR SBX

Place of Performance

Location: DUTCH HARBOR, ALEUTIANS WEST County, ALASKA, 99692

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $44.8 million to GREAT EASTERN GROUP, INC. for work described as: N103B/PM2; R. NORRIS; OSV FOR SBX Key points: 1. The contract awarded to Great Eastern Group, Inc. for deep sea freight transportation is a significant expenditure. 2. Competition was full and open after exclusion of sources, suggesting a deliberate selection process. 3. Potential risks include the firm fixed price structure and the lack of small business participation. 4. The IT sector is not directly involved, but logistics and transportation are critical for defense operations.

Value Assessment

Rating: fair

The contract's value of $44.8 million for deep sea freight transportation appears substantial. Benchmarking against similar contracts is difficult without more specific service details, but the duration and scope warrant careful review.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The 'full and open competition after exclusion of sources' indicates a competitive process, but the exclusion of certain sources may have limited the overall competitive landscape. The firm fixed price contract aims to control costs, but price discovery might be impacted by the source exclusion.

Taxpayer Impact: Taxpayer funds are being utilized for essential deep sea freight transportation services. The effectiveness of the competition method in securing the best value for taxpayers is a key consideration.

Public Impact

Ensures critical deep sea freight transportation for the Department of the Navy. Supports national defense logistics and supply chain operations. The firm fixed price contract provides cost certainty for the government. Lack of small business involvement may limit economic opportunities for smaller enterprises.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation
Potential for limited competition due to source exclusion
Firm fixed price may not capture all cost efficiencies

Positive Signals

Full and open competition was utilized
Definitive contract provides clear terms
Essential service for defense operations

Sector Analysis

This contract falls under the broad category of logistics and transportation services, crucial for defense operations. Spending benchmarks in this sector vary widely based on the specific nature of the freight, routes, and service levels required.

Small Business Impact

The data indicates that small businesses were not involved in this contract (ss: false, sb: false). This is a missed opportunity to leverage the capabilities of small businesses and could potentially lead to less competitive pricing or innovation.

Oversight & Accountability

Oversight is crucial to ensure the contractor is meeting all performance requirements and that the firm fixed price is delivering value. The 'exclusion of sources' aspect warrants particular attention to ensure fairness and prevent potential anti-competitive practices.

Related Government Programs

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

Risk Flags

Lack of small business participation
Potential for limited competition due to source exclusion
Firm fixed price risk for long-duration contract
Limited transparency on specific service details and performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.8 million to GREAT EASTERN GROUP, INC.. N103B/PM2; R. NORRIS; OSV FOR SBX

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 $44.8 million.

What is the period of performance?

Start: 2019-05-09. End: 2023-08-15.

What was the rationale behind excluding specific sources from the full and open competition, and how did this impact the final price and service?

The rationale for excluding sources needs to be clearly documented and justified. If exclusions were based on specialized capabilities or security requirements, it might be understandable. However, if the exclusions were arbitrary, it could have limited competition, potentially leading to a higher price than achievable in a truly open market. This impacts taxpayer value by potentially overpaying for services.

How does the firm fixed price structure align with the potential risks and complexities of deep sea freight transportation over a 1559-day period?

A firm fixed price contract offers cost certainty to the government but places the risk of cost overruns on the contractor. For complex, long-duration services like deep sea freight, unforeseen issues such as fuel price volatility, geopolitical disruptions, or unexpected logistical challenges could significantly impact the contractor's profitability. This could lead to the contractor absorbing losses or potentially seeking contract modifications.

What measures are in place to ensure the effectiveness and efficiency of Great Eastern Group's deep sea freight services, given the significant contract value?

Effectiveness and efficiency are typically ensured through performance metrics, service level agreements (SLAs), and regular government oversight. For this contract, the Department of the Navy should have clear deliverables, key performance indicators (KPIs) related to on-time delivery, cargo condition, and operational reliability. Regular performance reviews and audits are essential to hold the contractor accountable and ensure taxpayer funds are used effectively.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3220518R3500

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: $53,296,428

Exercised Options: $44,788,268

Current Obligation: $44,788,268

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline