DoD spent $21.3M on aviation turbine fuel from BP West Coast Products LLC, awarded via full and open competition

Contract Overview

Contract Amount: $21,285,883 ($21.3M)

Contractor: BP West Coast Products LLC

Awarding Agency: Department of Defense

Start Date: 2015-02-09

End Date: 2015-02-24

Contract Duration: 15 days

Daily Burn Rate: $1.4M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 16

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: 8501792899!TURBINE FUEL,AVIATION

Place of Performance

Location: BLAINE, WHATCOM County, WASHINGTON, 98230, UNITED STATES OF AMERICA

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $21.3 million to BP WEST COAST PRODUCTS LLC for work described as: 8501792899!TURBINE FUEL,AVIATION Key points: 1. The contract value represents a significant portion of the agency's fuel procurement for the specified period. 2. Competition dynamics suggest a potentially competitive bidding environment for this fuel type. 3. The fixed-price with economic price adjustment (FPEPA) contract type introduces some risk related to fuel price volatility. 4. Performance context is limited to the short duration of the award. 5. The contract falls within the petroleum refineries sector, supporting aviation fuel supply. 6. The award was made to a single contractor, BP West Coast Products LLC.

Value Assessment

Rating: fair

The awarded amount of $21.3 million for aviation turbine fuel appears to be within a reasonable range for a large federal contract of this nature. However, without specific benchmarks for the quantity of fuel procured or the exact period of performance, a precise value-for-money assessment is challenging. The fixed-price with economic price adjustment (FPEPA) structure introduces a degree of price risk, as the final cost can fluctuate with market conditions. Comparing this to similar contracts for bulk aviation fuel would provide a clearer picture of its cost-effectiveness.

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 data shows 16 bids were received, suggesting a healthy level of competition for this fuel supply requirement. A higher number of bids generally leads to better price discovery and potentially lower costs for the government, as contractors vie to win the award.

Taxpayer Impact: The robust competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. It ensures that the government is not overpaying due to a lack of market engagement.

Public Impact

The Department of Defense (DoD) is the primary beneficiary, securing a critical fuel supply for its aviation operations. The service delivered is the provision of aviation turbine fuel, essential for military aircraft. The geographic impact is likely concentrated in areas where the Defense Logistics Agency (DLA) operates and requires fuel, potentially nationwide or at specific bases. Workforce implications are minimal for this specific contract, as it primarily involves the supply of a commodity rather than extensive labor services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The FPEPA contract type exposes the government to potential cost increases if fuel prices rise significantly during the contract period.
The short duration of the award (15 days) may limit the ability to establish long-term price stability or volume discounts.

Positive Signals

The award was made under full and open competition, indicating a competitive bidding process.
The receipt of 16 bids suggests strong market interest and a potentially efficient price discovery mechanism.

Sector Analysis

The petroleum refineries sector (NAICS 324110) is crucial for national infrastructure, providing essential fuels for transportation and industry. This contract for aviation turbine fuel falls directly within this sector, highlighting the government's reliance on commercial suppliers for critical energy needs. The market for aviation fuel is influenced by global oil prices, refining capacity, and demand from both commercial and military aviation. Comparable spending benchmarks would involve analyzing other large-volume fuel procurements by federal agencies or major airlines.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SB is false) and there is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem for this specific award appears to be minimal. The primary focus was likely on securing the most competitive pricing and reliable supply from larger, established fuel providers.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Logistics Agency (DLA), which is responsible for managing and executing supply chain operations for the DoD. Accountability measures would include contract performance monitoring, invoice verification, and adherence to the terms and conditions of the fixed-price with economic price adjustment agreement. Transparency is generally maintained through contract award databases, though specific performance details might be less publicly accessible.

Related Government Programs

Defense Logistics Agency Fuel Procurement
Aviation Fuel Contracts
Petroleum Product Supply
Fixed-Price with Economic Price Adjustment Contracts

Risk Flags

Price Volatility Risk (FPEPA)
Short Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.3 million to BP WEST COAST PRODUCTS LLC. 8501792899!TURBINE FUEL,AVIATION

Who is the contractor on this award?

The obligated recipient is BP WEST COAST PRODUCTS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $21.3 million.

What is the period of performance?

Start: 2015-02-09. End: 2015-02-24.

What is the historical spending pattern for aviation turbine fuel by the Defense Logistics Agency?

Analyzing historical spending patterns for aviation turbine fuel by the Defense Logistics Agency (DLA) would reveal trends in volume, pricing, and contractor relationships over time. This specific contract, awarded in February 2015 for $21.3 million, represents a single transaction. To understand broader patterns, one would need to examine DLA's procurement data over several fiscal years, identifying peak demand periods, average prices paid per gallon (if derivable), and the prevalence of different contract types (e.g., fixed-price vs. FPEPA). Such analysis could highlight fluctuations due to geopolitical events, changes in military readiness levels, or shifts in fuel market dynamics. It would also show which companies have been awarded the largest share of DLA's fuel contracts and whether competition has remained consistent or diminished.

How does the price paid under this contract compare to market rates for aviation turbine fuel around February 2015?

Determining the precise price paid per unit under this contract is challenging without knowing the exact quantity of fuel procured. However, we can infer potential value by comparing the total award amount ($21.3 million) to general market data for aviation turbine fuel (Jet A or JP-8) during February 2015. Market reports from that period indicate that prices for jet fuel were generally in the range of $1.50 to $2.00 per gallon, influenced by global crude oil prices which were experiencing a downturn. If this contract involved a substantial volume, say 10-15 million gallons, the implied price per gallon would fall within this range. A more detailed analysis would require access to the contract's delivery schedule and specific fuel type to benchmark against industry price indices like Platts or EIA data for that specific time and region.

What is the track record of BP West Coast Products LLC in supplying fuel to the federal government?

BP West Coast Products LLC, as a subsidiary of a major global energy company, likely has a significant track record in supplying fuel products, including to the federal government. Federal procurement databases would detail their past awards, including agencies served, contract values, and types of fuel supplied. Examining these records would reveal the consistency and scale of their government business. Key aspects to assess would include their performance history on previous contracts, any instances of contract disputes or terminations, and their capacity to meet large-scale federal demands. Given their industry position, it's probable they have been a regular supplier, potentially holding numerous contracts across various agencies over the years, including for aviation fuels.

What are the risks associated with the 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type for aviation fuel?

The 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type for aviation fuel introduces specific risks primarily related to price volatility. While the base price is fixed, the economic price adjustment clause allows for modifications based on fluctuations in specified market indices, typically tied to crude oil or refined product prices. For the government, the risk is that fuel prices could increase significantly during the contract period, leading to higher-than-anticipated expenditures. Conversely, if prices fall, the government benefits from lower costs. The contractor bears less risk of price increases but also less potential gain from price decreases beyond the base fixed amount. Effective management of an FPEPA contract requires robust monitoring of the relevant economic indices and clear, pre-defined adjustment mechanisms to ensure fairness and prevent excessive cost overruns for the government.

How does the number of bidders (16) impact the government's negotiating position for aviation fuel?

A high number of bidders, such as the 16 received for this aviation turbine fuel contract, significantly strengthens the government's negotiating position. It indicates a competitive market where multiple suppliers are willing and able to meet the government's requirements. This level of competition typically drives down prices as contractors strive to offer the most attractive bids to secure the award. The government can leverage this by selecting the lowest-priced technically acceptable offer or by engaging in further price negotiations if allowed by the solicitation. Furthermore, a larger pool of bidders reduces the risk of vendor lock-in and ensures the government has options for future procurements, fostering a more dynamic and cost-effective supply chain.

Industry Classification

NAICS: Manufacturing › Petroleum and Coal Products Manufacturing › Petroleum Refineries

Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 16

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: BP P.L.C. (UEI: 210042669)

Address: 4519 GRANDVIEW RD, BLAINE, WA, 98230

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,285,883

Exercised Options: $21,285,883

Current Obligation: $21,285,883

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060014D0508

IDV Type: IDC

Timeline