DoD's $22.9M Turbine Fuel Contract with Equilon Enterprises LLC: A Deep Dive into Spending
Contract Overview
Contract Amount: $22,917,342 ($22.9M)
Contractor: Equilon Enterprises LLC
Awarding Agency: Department of Defense
Start Date: 2014-07-29
End Date: 2014-08-11
Contract Duration: 13 days
Daily Burn Rate: $1.8M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 26
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: 8501192457!TURBINE FUEL,AVIATI
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77002, UNITED STATES OF AMERICA
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $22.9 million to EQUILON ENTERPRISES LLC for work described as: 8501192457!TURBINE FUEL,AVIATI Key points: 1. The contract awarded to Equilon Enterprises LLC for turbine fuel represents a significant expenditure within the Defense Logistics Agency. 2. Full and open competition was utilized, suggesting a potentially competitive pricing environment. 3. The contract's duration and fixed-price nature offer some predictability in costs. 4. Analysis of the petroleum refineries sector is crucial for understanding market dynamics and potential cost drivers.
Value Assessment
Rating: good
The award amount of $22.9 million for turbine fuel appears reasonable given the sector and the nature of the commodity. Benchmarking against similar fuel contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition is a positive indicator for price discovery. This method allows multiple vendors to bid, theoretically driving down costs and ensuring fair market value.
Taxpayer Impact: The competitive bidding process aims to ensure taxpayer funds are used efficiently, securing fuel at a price reflective of market conditions.
Public Impact
Ensures the Department of Defense has a critical fuel supply for aviation operations. Supports the broader energy sector through procurement of refined petroleum products. The contract's execution impacts readiness and operational capabilities of military assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price volatility in the petroleum market.
- Dependence on a single supplier for a critical commodity.
Positive Signals
- Utilized full and open competition.
- Fixed-price contract provides cost certainty.
Sector Analysis
The petroleum refineries sector is characterized by global supply and demand dynamics, geopolitical influences, and fluctuating crude oil prices. This contract falls within the broader energy sector, where benchmarks are often tied to market indices.
Small Business Impact
The data does not indicate whether small businesses were involved in this specific contract, either as prime contractors or subcontractors. Further investigation would be needed to assess small business participation.
Oversight & Accountability
The Defense Logistics Agency is responsible for ensuring the efficient and effective procurement of goods and services for the military. Oversight would focus on contract performance, delivery, and adherence to terms.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Market volatility of fuel prices.
- Potential for supply chain disruptions.
- Dependence on a single awardee.
- Contract duration relative to market shifts.
Tags
petroleum-refineries, department-of-defense, tx, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.9 million to EQUILON ENTERPRISES LLC. 8501192457!TURBINE FUEL,AVIATI
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 $22.9 million.
What is the period of performance?
Start: 2014-07-29. End: 2014-08-11.
What is the historical price trend for turbine fuel during the contract period, and how does this award compare?
Analyzing historical price trends for turbine fuel during the contract period (July-August 2014) is essential. Comparing the awarded price against market benchmarks like the NYMEX futures or spot prices for jet fuel would reveal if the government secured a favorable rate. Fluctuations due to global events or supply chain issues could significantly impact the perceived value.
What are the potential risks associated with relying on Equilon Enterprises LLC for this critical fuel supply?
Risks include potential supply disruptions due to Equilon's operational issues, geopolitical events affecting their supply chain, or unforeseen market shocks impacting their ability to fulfill the contract at the agreed price. Dependence on a single entity, even with competition, can create vulnerabilities if that entity faces challenges.
How effectively did the 'full and open competition' process ensure the best value for taxpayers in this specific instance?
The effectiveness of 'full and open competition' hinges on the number and quality of bids received. If multiple strong competitors participated, it likely led to competitive pricing. However, without knowing the bid landscape, it's difficult to definitively state it achieved the 'best' value. Post-award analysis of competitor pricing would be informative.
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: $22,917,342
Exercised Options: $22,917,342
Current Obligation: $22,917,342
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060014D0463
IDV Type: IDC
Timeline
Start Date: 2014-07-29
Current End Date: 2014-08-11
Potential End Date: 2014-08-11 00:00:00
Last Modified: 2015-11-18
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