DoD spent $29.6M on aviation turbine fuel from BP West Coast Products LLC, awarded via full and open competition

Contract Overview

Contract Amount: $29,621,323 ($29.6M)

Contractor: BP West Coast Products LLC

Awarding Agency: Department of Defense

Start Date: 2014-09-08

End Date: 2014-09-08

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: 8501336819!TURBINE FUEL,AVIATION

Place of Performance

Location: BLAINE, WHATCOM County, WASHINGTON, 98230

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $29.6 million to BP WEST COAST PRODUCTS LLC for work described as: 8501336819!TURBINE FUEL,AVIATION Key points: 1. Value for money appears reasonable given the market for aviation fuel. 2. Competition dynamics indicate a fair process, though specific bidder numbers are not provided. 3. Risk indicators are low for this type of commodity contract. 4. Performance context is a single delivery order, suggesting a specific, short-term need. 5. Sector positioning is within the energy and defense logistics sectors.

Value Assessment

Rating: good

The contract value of $29.6 million for aviation turbine fuel is a significant but not extraordinary amount for a Department of Defense procurement. Benchmarking against similar contracts for bulk fuel purchases would be necessary for a precise value assessment. However, given the volatile nature of fuel prices and the scale of military operations, this price point is likely competitive, especially considering it was awarded under full and open competition. The firm fixed-price contract type also provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while the intent was broad competition, specific circumstances led to excluding certain potential sources. The exact number of bidders is not detailed, but the 'full and open' designation implies multiple entities were considered. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: The use of full and open competition generally benefits taxpayers by driving down prices through a wider pool of potential suppliers, leading to more cost-effective procurement.

Public Impact

The primary beneficiary is the Department of Defense, ensuring operational readiness through the supply of critical aviation fuel. The service delivered is the provision of aviation turbine fuel, essential for aircraft operations. The geographic impact is likely concentrated around military bases or operational areas where the fuel was delivered, with a specific mention of 'WASHINGTON' state. Workforce implications are minimal, primarily related to the logistics and distribution of the fuel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits full understanding of competitive intensity.
Potential for price volatility in the fuel market could impact long-term value if this were a multi-year contract.

Positive Signals

Awarded under full and open competition, indicating a broad market approach.
Firm fixed-price contract provides cost predictability.
Procurement by a major agency (DoD) suggests adherence to established purchasing processes.

Sector Analysis

The procurement falls within the energy sector, specifically the refining and distribution of petroleum products. The market for aviation turbine fuel is global and subject to significant price fluctuations based on crude oil costs, geopolitical events, and supply/demand dynamics. The Department of Defense is a major consumer of such fuels, and its purchasing power can influence market dynamics. Comparable spending benchmarks would involve analyzing other large-scale government or commercial fuel contracts.

Small Business Impact

There is no indication that this contract included small business set-asides. The nature of large-scale fuel supply contracts often favors major energy corporations with the infrastructure and capacity to meet such demands. Subcontracting opportunities for small businesses might exist in areas like transportation or logistics, but this is not explicitly detailed in the provided data.

Oversight & Accountability

The contract was awarded by the Defense Logistics Agency (DLA), a component of the Department of Defense known for its robust procurement and oversight processes. As a delivery order under a larger contract vehicle, it likely falls under existing DLA oversight mechanisms. Transparency is generally maintained through contract award databases, though specific performance monitoring details are not provided here. Inspector General jurisdiction would apply in cases of fraud or mismanagement.

Related Government Programs

Defense Logistics Agency Fuel Contracts
Department of Defense Aviation Fuel Procurement
Energy Sector Commodity Contracts

Risk Flags

Potential for price volatility in the energy market.
Limited transparency on the number of bidders in the competition.
Exclusion of sources in a full and open competition requires justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.6 million to BP WEST COAST PRODUCTS LLC. 8501336819!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 $29.6 million.

What is the period of performance?

Start: 2014-09-08. End: 2014-09-08.

What is the track record of BP West Coast Products LLC in fulfilling government contracts, particularly for fuel?

BP West Coast Products LLC, as a subsidiary of a major global energy company, has a significant history of supplying petroleum products, including aviation fuel, to various government entities. While specific performance metrics for this particular $29.6 million contract are not detailed, BP's extensive experience in the energy market suggests a capacity to meet large-scale fuel demands. Government contract databases often track past performance, including on-time delivery, quality compliance, and overall satisfaction. For this specific contract, the award under full and open competition implies that BP met the necessary qualifications and competitive criteria set forth by the Defense Logistics Agency. Further analysis would involve reviewing DLA's past performance evaluations for BP on similar fuel contracts to assess reliability and adherence to terms.

How does the $29.6 million price compare to market rates for aviation turbine fuel during the contract period?

Determining the precise market rate comparison for this $29.6 million contract requires access to historical aviation turbine fuel pricing data specific to the contract's location and timeframe (awarded September 8, 2014). Aviation fuel prices are highly volatile, influenced by global crude oil prices, refining costs, transportation, and regional supply/demand. The contract was a Firm Fixed Price (FFP) award, suggesting that BP West Coast Products LLC assumed the risk of price fluctuations. To benchmark, one would typically compare the awarded price per gallon or barrel against indices like the Platts U.S. Gulf Coast Jet Fuel assessment or similar benchmarks relevant to the delivery region. Given it was a full and open competition, the price achieved is presumed to be competitive within the market conditions at that time. However, without the specific volume and unit price, a direct comparison is challenging.

What are the primary risks associated with this type of fuel procurement contract?

The primary risks associated with this aviation turbine fuel procurement contract revolve around price volatility and supply chain disruptions. Fuel prices can fluctuate significantly due to geopolitical events, economic conditions, and supply/demand imbalances, potentially impacting the government's cost if the contract terms were not sufficiently fixed or if future renewals are considered. Supply chain risks include potential disruptions in refining, transportation (pipelines, tankers, rail), or distribution, which could affect timely delivery and operational readiness for the Department of Defense. Additionally, quality control is a risk; ensuring the fuel meets stringent aviation standards is critical to prevent aircraft damage or safety incidents. The contract's firm fixed-price nature mitigates some cost risk for the government, but supply and quality remain key considerations.

What was the effectiveness of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method for this contract?

The effectiveness of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (FOUCAES) method for this contract is difficult to fully assess without knowing the specific reasons for excluding certain sources. This method aims to maximize competition while acknowledging that some potential offerors might be ineligible due to factors like national security, export controls, or specific technical requirements. If the exclusion was justified and a sufficient number of qualified bidders still participated, then the method could be effective in achieving a competitive price and selecting a capable supplier. However, if the exclusion significantly limited the pool of bidders, it could potentially reduce competition and lead to less favorable pricing for the government compared to unrestricted full and open competition. The Defense Logistics Agency (DLA) would have had to justify the exclusion of sources.

How does this $29.6M expenditure fit into the broader context of DoD's annual spending on aviation fuel?

The $29.6 million expenditure represents a specific instance of aviation turbine fuel procurement by the Department of Defense (DoD) through the Defense Logistics Agency (DLA). The DoD is one of the largest consumers of petroleum products globally, with annual spending on fuel often running into the billions of dollars. This single contract, while substantial, is likely a fraction of the total annual fuel budget. DLA manages the vast majority of DoD's fuel requirements, utilizing various contract vehicles, including indefinite-delivery/indefinite-quantity (IDIQ) contracts and specific delivery orders like this one. Understanding the broader context involves examining DLA's total fuel spend, the number and value of other fuel contracts awarded, and how this specific award contributes to meeting the overall operational fuel needs across different military branches and geographic locations.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $29,688,120

Exercised Options: $29,621,323

Current Obligation: $29,621,323

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060014G0641

IDV Type: BOA

Timeline