1 | Page

FEDERAL MARITIME COMMISSION

SERVICE CONTRACT INVENTORY ANALYSIS

Fiscal Year 2020

Introduction

The mission of the FMC is “to foster a fair, efficient and reliable international ocean 

transportation system and to protect the public from unfair and deceptive practices.”

The FMC ensures competitive and efficient ocean transportation services for the shipping 

public by:

• Reviewing and monitoring agreements among ocean common carriers and marine 

terminal operators (MTOs) serving the U.S. foreign ocean borne trades to ensure 

that they do not cause substantial increases in transportation costs or decreases in 

transportation services.

• Maintaining and reviewing confidentially filed service contracts and Non-VesselOperating Common Carrier (NVOCC) Service Arrangements to guard against 

detrimental effects to shipping.

• Providing a forum for exporters, importers, and other members of the shipping 

public to obtain relief from ocean shipping practices or disputes that impede the 

flow of commerce.

• Ensuring common carriers’ tariff rates and charges are published in private, 

automated tariff systems and electronically available.

• Monitoring rates, charges, and rules of government-owned or –controlled carriers 

to ensure they are just and reasonable; and

• Taking action to address unfavorable conditions caused by foreign government or 

business practices in U.S. foreign shipping trades.

• The FMC protects the public from financial harm, and contributes to the integrity 

and security of the U.S. supply chain and transportation system by:

• Helping resolve disputes involving shipment of cargo, personal or household 

goods, or disputes between cruise vessel operators and passengers.

• Investigating and ruling on complaints regarding rates, charges, classifications, 

and practices of common carriers, MTOs, and Ocean Transportation 

Intermediaries (OTIs), that violate the Shipping Act.

• Licensing shipping companies with appropriate character and adequate financial 

responsibility.

• Identifying and holding regulated entities accountable for mislabeling cargo 

shipped to or from the United States; and

• Ensuring that cruise lines maintain financial responsibility to pay claims for 

personal injury or death, and to reimburse passengers when their cruise fails to 

sail.

• The FMC also recognizes the critical importance of providing effective, 

performance-oriented management. The FMC ensures the protection of resources 

allocated to its mission through strategic plans and measurement mechanisms for 
2 | Page

human capital, information technology, and financial management at the 

Commission.

The contracts on this Service Contract Inventory (SCI) were put into place in order to aid 

in the fulfillment of the FMC’s Strategic Goals and Strategies. If a contract is identified 

as Critical (CT) on the SCI, it is directly related to the mission and strategic goals of the 

FMC. 

1. Scope

As prescribed in the notice, OMB advised that agencies give priority consideration to 

Special Interest Functions (SIFs), which are those that require increased management 

attention due to heightened risk of workforce imbalance. The following PSC was 

selected for review.

PSC PSC Description

Number of 

Contracts 

FY 2020

Total Dollars 

Obligated 

FY 2020 for PSC

Total Base and 

All Options Value 

for PSC

Percentage of 

Obligations the 

Contracts 

Covered

R703 SUPPORTMANAGEMENT: 

ACCOUNTING 1 $68,004.96 $375,752.32 100%

2. Methodology

The PSC was selected because it may be closely related to the work of government 

employees and has the potential for inherently governmental work to be performed by 

contractors. 

Contract file for R703: The purpose of this Task Order was to obtain Financial and 

Performance Audits for the FMC Annual Financial Statement Audits, FMC Annual 

FISMA audits and other Financial Related and Performance Audits. 

The FMC’s, Office of Management Services, Procurement Analyst sampled contract files 

and conducted a meeting with the COR responsible for identifying the appropriate PSC based 

on their requirement. 

Note: The SIF/PSC that was given priority did not meet the $500,000, threshold for fixedpriced contracts in accordance with FAR 4.1703. 
3 | Page

3. Findings

The FMC is giving special management attention to functions that are closely associated 

with inherently governmental functions. In accordance with OFPP Policy Letter 11-01, 

Performance of Inherently Governmental and Critical Functions, an Agency Designee has 

been appointed to conduct reviews of all actions over the simplified acquisition threshold. 

The designee is the Contracting Officer, and all FY20 actions to date have been reviewed 

in accordance with the guidance.

The FMC has placed emphasis on issuing awards to underrepresented 

socioeconomic categories where feasible and will continue to do so. Also, 

contractors will not be utilized to perform inherently governmental functions, but to 

meet agency needs for skills and services not available through current staff. 

The following characteristics were noted for the awards reviewed:

i. The agency is not using contractor employees to perform inherently governmental 

functions as outlined in FAR Subpart 7.5. The FMC is giving special management 

attention, as set forth in FAR 37.114, to functions that are closely associated with 

inherently governmental functions. This review assessed the extent to which functions 

might be closely associated with inherently governmental functions, and identified 

internal controls, including governance and internal reviews, to ensure functions that 

are closely associated with inherently governmental functions are given special 

attention. Although the functions are not inherently governmental, contractors’ 

employees may work in a situation that permits or might permit access to confidential 

business information or other sensitive information or may provide support for human 

resources management. The FMC depends on well-trained Contracting Officer 

Representatives (CORs) to ensure that work performed by contractors does not expand 

into inherently governmental functions during the performance of an award. 

ii. The agency has specific safeguards and monitoring systems in place to ensure that 

work being performed by contractors has not changed or expanded during 

performance to become an inherently governmental function. The FMC has utilized 

acquisition personnel to provide training to improve understanding of the necessary 

oversight to ensure that work being performed by contractors has not changed or 

expanded during performance to become an inherently governmental function.

iii. The agency is not using contractor employees to perform critical functions in a manner 

that could affect the ability of the agency to maintain control of its mission and 

operations. The contract was assessed based on the complexity of the functions, 

impact of stop-work, and the risk of the functions. Based on this assessment, it is our 

determination that the FMC used contractor support to enhance the agency’s mission

and did not use contractor employees to perform critical functions which would 

adversely impact the agency’s ability to maintain control of its mission. 

iv. Based on the number of contractors compared to the number of Federal workers, and 

Federal workers providing oversight and management of service contracts, the FMC 

has sufficient internal resources to manage and oversee contracts effectively. The 
4 | Page

availability of appropriately trained and experienced CORs and contract staff was also 

assessed as sufficient. 

v. The Contracting Officer identified no contract as being poorly performed because of 

excessive costs or inferior quality.

4. Actions Taken or Planned

No weaknesses or challenges were identified. Also, there were no follow up steps on

actions in the previous inventory that were identified as pending or planned.

5. Accountable Officials

The senior agency management official accountable for the development of procurement 

policies, procedures, and training associated with OFPP Policy Letter 11-01 addressing 

the performance of inherently governmental and critical functions and for ensuring 

appropriate internal management attention is given to the development and analysis of 

service contract inventories is Katona Bryan-Wade, Director of the Office of 

Management Services.

Plan for Analyzing the FY 2021 Data

The FY 2021 planned analysis will focus on the below special interest functions.

PSC PSC Description

R799 SUPPORT- MANAGEMENT: OTHER

The above product service code was selected to ensure compliance with FAR 4.1703. 

FMC will analyze the above to ensure proper reporting requirements have been 

completed by contractors and ensure inherently governmental functions are not being 

performed.

Katona Bryan-Wade

Director, Office of Management Services