DoD's $27.8M Naval Distillate Contract Awarded to ExxonMobil Under Full and Open Competition
Contract Overview
Contract Amount: $27,792,191 ($27.8M)
Contractor: Exxon Mobil Corporation
Awarding Agency: Department of Defense
Start Date: 2014-04-25
End Date: 2014-04-25
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 27
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: 8500551009!DISTILLATE,NAVAL
Place of Performance
Location: SPRING, HARRIS County, TEXAS, 77389
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $27.8 million to EXXON MOBIL CORPORATION for work described as: 8500551009!DISTILLATE,NAVAL Key points: 1. Awarded to a major oil and gas corporation, indicating significant market presence. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Risk is moderate, tied to fuel price volatility and supply chain stability. 4. Spending falls within the Petroleum Refineries sector (NAICS 324110).
Value Assessment
Rating: good
The contract value of $27.8M for naval distillate appears reasonable given the nature of petroleum products and the scale of defense logistics. Benchmarking against similar large-volume fuel contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically allows for the widest possible range of bidders. This method is expected to foster price discovery and potentially lead to more competitive pricing for the government.
Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing the best possible price for essential naval distillate.
Public Impact
Ensures a critical fuel supply for naval operations, supporting national security. The award to a large, established corporation suggests reliability in meeting demand. Potential for price fluctuations impacts the overall cost to taxpayers over time.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Fuel price volatility
- Geopolitical supply chain risks
- Dependence on a single large supplier for this specific award
Positive Signals
- Awarded under full and open competition
- Firm Fixed Price contract type
- Established supplier with proven capabilities
Sector Analysis
The Petroleum Refineries sector (NAICS 324110) is crucial for national infrastructure and defense. Spending on refined petroleum products by the Department of Defense is substantial and subject to global market dynamics.
Small Business Impact
The data indicates this contract was not awarded to a small business. Large defense contracts for commodities like fuel are typically dominated by major corporations due to scale and specialized infrastructure requirements.
Oversight & Accountability
The award was a delivery order under a larger contract, suggesting existing oversight mechanisms. Further review of the parent contract and delivery order specifics would be needed to assess comprehensive oversight and accountability.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Fuel price volatility
- Geopolitical supply chain risks
- Potential for market consolidation in the energy sector
- Dependence on large corporations for critical commodities
Tags
petroleum-refineries, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.8 million to EXXON MOBIL CORPORATION. 8500551009!DISTILLATE,NAVAL
Who is the contractor on this award?
The obligated recipient is EXXON MOBIL CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $27.8 million.
What is the period of performance?
Start: 2014-04-25. End: 2014-04-25.
What was the specific pricing mechanism used within the Firm Fixed Price structure, and how did it account for potential market fluctuations?
While the contract type is Firm Fixed Price (FFP), the specific mechanism for pricing naval distillate is not detailed. FFP contracts aim to fix the price regardless of cost fluctuations. However, for commodities like fuel, pricing might be tied to a specific index at the time of award or include escalation clauses, which would need further examination to fully understand the government's protection against market volatility.
How does the awarded price compare to benchmarks for similar naval distillate contracts awarded during the same period?
Without access to a comprehensive database of comparable contracts and their pricing details, a precise benchmark comparison is difficult. However, the award to ExxonMobil under full and open competition suggests a competitive process. A thorough analysis would involve comparing the per-gallon price against other DoD contracts for similar fuel types and quantities awarded around April 2014.
What are the potential long-term risks associated with relying on a single large corporation for such a critical fuel supply, even with competitive bidding?
Relying on a single large corporation, even one with proven capabilities like ExxonMobil, carries inherent risks. These include potential supply disruptions due to unforeseen events (e.g., natural disasters, geopolitical issues affecting the supplier), potential for future price increases if competition diminishes, and the concentration of critical infrastructure support. Diversification of suppliers or robust contingency planning could mitigate these risks.
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: 27
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3225 GALLOWS RD, FAIRFAX, VA, 22037
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,032,312
Exercised Options: $27,792,191
Current Obligation: $27,792,191
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060013D0451
IDV Type: IDC
Timeline
Start Date: 2014-04-25
Current End Date: 2014-04-25
Potential End Date: 2014-04-25 00:00:00
Last Modified: 2018-10-27
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