DoD's $30.3M Aviation Turbine Fuel Contract Awarded to Equilon Enterprises LLC Under Full and Open Competition

Contract Overview

Contract Amount: $30,283,292 ($30.3M)

Contractor: Equilon Enterprises LLC

Awarding Agency: Department of Defense

Start Date: 2014-06-12

End Date: 2014-06-13

Contract Duration: 1 days

Daily Burn Rate: $30.3M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 26

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: 8501050507!TURBINE FUEL, AVIATION

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77002

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to EQUILON ENTERPRISES LLC for work described as: 8501050507!TURBINE FUEL, AVIATION Key points: 1. Significant spending on aviation fuel highlights critical defense logistics needs. 2. Competition ensures fair pricing, but market volatility can impact long-term costs. 3. Reliance on a single supplier for this specific fuel type presents a potential risk. 4. The petroleum refineries sector is essential for national security and economic stability.

Value Assessment

Rating: good

The contract value of $30.3M appears reasonable given the nature of aviation fuel procurement. Benchmarking against similar large-scale 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, indicating a robust price discovery process. This method generally leads to more competitive pricing for the government.

Taxpayer Impact: Full and open competition likely resulted in a fair price, maximizing taxpayer value for this essential defense commodity.

Public Impact

Ensures continuous supply of critical fuel for military aviation operations. Supports the operational readiness of defense forces. Impacts the broader energy market due to the scale of procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in the volatile fuel market.
Dependence on a specific supplier for a critical resource.

Positive Signals

Awarded through full and open competition.
Clear contract type (Firm Fixed Price) for cost certainty.

Sector Analysis

The Department of Defense's significant expenditure on aviation turbine fuel underscores the critical role of the petroleum refining sector in supporting national security. Spending benchmarks for fuel procurement vary widely based on geopolitical factors and market demand.

Small Business Impact

This contract does not appear to have specific provisions for small business participation, as indicated by 'sb': false. Larger contracts in this sector often involve prime contractors who may then subcontract to smaller businesses.

Oversight & Accountability

The award was made via a delivery order under a larger contract, suggesting existing oversight mechanisms. The firm fixed price contract type provides cost control, but monitoring fuel market trends is crucial.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Fuel price volatility.
Supplier dependency.
Geopolitical risks impacting supply.
Potential for market consolidation in the fuel sector.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to EQUILON ENTERPRISES LLC. 8501050507!TURBINE FUEL, AVIATION

Who is the contractor on this award?

The obligated recipient is EQUILON ENTERPRISES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.3 million.

What is the period of performance?

Start: 2014-06-12. End: 2014-06-13.

What is the historical price trend for aviation turbine fuel over the contract period?

Analyzing historical price trends for aviation turbine fuel during the contract period (2014-2015) would reveal the impact of market volatility on the firm fixed price. Understanding these trends helps assess whether the government secured a favorable price or if fluctuations led to unexpected costs or savings.

What are the risks associated with relying on Equilon Enterprises LLC for this critical fuel supply?

Risks include potential supply chain disruptions, price gouging if competition diminishes, or the supplier facing financial difficulties. While competition was initially full and open, the long-term reliance on a single awardee for subsequent orders warrants monitoring for any signs of reduced market pressure or supplier-specific vulnerabilities.

How effectively does this contract support the operational readiness of military aviation units?

This contract is crucial for maintaining the operational readiness of military aviation units by ensuring a consistent and reliable supply of aviation turbine fuel. The firm fixed price structure provides budget predictability, allowing units to plan missions effectively without concern for fuel cost fluctuations.

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: 26

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Shell Deutschland Gmbh (UEI: 423792808)

Address: 910 LOUISIANA ST STE 2, HOUSTON, TX, 77002

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,283,292

Exercised Options: $30,283,292

Current Obligation: $30,283,292

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060014D0463

IDV Type: IDC

Timeline