DoD's $23.7M Aviation Turbine Fuel Contract Awarded to Equilon Enterprises LLC

Contract Overview

Contract Amount: $23,679,318 ($23.7M)

Contractor: Equilon Enterprises LLC

Awarding Agency: Department of Defense

Start Date: 2014-01-15

End Date: 2014-01-17

Contract Duration: 2 days

Daily Burn Rate: $11.8M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 27

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: 8500550967!TURBINE FUEL, AVIATION

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77002, UNITED STATES OF AMERICA

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to EQUILON ENTERPRISES LLC for work described as: 8500550967!TURBINE FUEL, AVIATION Key points: 1. Significant contract value of $23.7 million for aviation turbine fuel. 2. Awarded under full and open competition, indicating a competitive market. 3. Potential risk associated with fluctuating fuel prices due to economic price adjustment clause. 4. The petroleum refineries sector is critical for defense logistics.

Value Assessment

Rating: good

The contract value of $23.7 million appears reasonable for aviation turbine fuel, especially considering it was awarded under full and open competition. Benchmarking against similar large-scale fuel procurements would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting that multiple bidders had the opportunity to compete. This method generally leads to better price discovery and potentially more favorable pricing for the government.

Taxpayer Impact: The competitive nature of this award likely resulted in a fair price, minimizing unnecessary taxpayer expenditure on essential aviation fuel.

Public Impact

Ensures the availability of critical fuel for military aviation operations. Supports the Department of Defense's logistical capabilities. Impacts the broader energy market due to the scale of the purchase.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns if fuel prices rise significantly.
Dependence on a single supplier for a critical commodity.
Potential for supply chain disruptions in the petroleum industry.

Positive Signals

Awarded through full and open competition, promoting market fairness.
Ensures a vital resource for national defense operations.
Contract duration is relatively short, allowing for re-evaluation of terms.

Sector Analysis

The petroleum refineries sector is essential for national security, providing critical fuels for military operations. This contract represents a significant procurement within this sector, benchmarked against typical defense fuel spending.

Small Business Impact

The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine if small businesses were involved as subcontractors or if opportunities were missed.

Oversight & Accountability

The award was made by the Defense Logistics Agency, a component of the Department of Defense, suggesting established oversight mechanisms. However, the effectiveness of oversight in managing the economic price adjustment clause warrants monitoring.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Price volatility risk due to economic price adjustment.
Potential for supply chain disruptions in the fuel market.
Lack of explicit small business participation noted.
Dependence on a single awarded entity for a critical resource.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to EQUILON ENTERPRISES LLC. 8500550967!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 $23.7 million.

What is the period of performance?

Start: 2014-01-15. End: 2014-01-17.

What is the historical price trend for aviation turbine fuel during the contract period, and how did the economic price adjustment clause affect the final cost?

Analyzing historical price data for aviation turbine fuel during the contract's execution period is crucial. The economic price adjustment clause allows for modifications to the contract price based on fluctuations in fuel market indices. Understanding these trends will reveal how much the final cost deviated from the initial fixed price component and whether the government benefited or incurred additional costs due to the adjustment mechanism.

What were the specific criteria used to evaluate bids under the full and open competition, and how did Equilon Enterprises LLC meet these requirements?

Evaluating bids under full and open competition typically involves assessing factors such as price, technical capability, past performance, and delivery schedules. For this contract, understanding the specific weighting of these criteria and the detailed evaluation of Equilon Enterprises LLC's submission is important. This ensures that the award was not solely based on the lowest price but also on the contractor's ability to reliably supply the required aviation turbine fuel.

What is the projected long-term impact of this type of contract structure, particularly with economic price adjustments, on the Department of Defense's budget predictability for fuel?

Contracts with economic price adjustment clauses introduce an element of uncertainty into budget predictability. While they can protect contractors from significant losses due to market volatility, they expose the DoD to potential cost increases. For long-term fuel budgeting, the DoD needs to model potential price fluctuations and their impact on overall spending, potentially exploring strategies like hedging or longer-term fixed-price agreements for greater fiscal stability.

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: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,679,318

Exercised Options: $23,679,318

Current Obligation: $23,679,318

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060012D0510

IDV Type: IDC

Timeline