Commerce awards $141K for Alaska diesel fuel, sole-source to Seldovia Fuel and Lube

Contract Overview

Contract Amount: $141,000 ($141.0K)

Contractor: Seldovia Fuel and Lube, Inc

Awarding Agency: Department of Commerce

Start Date: 2024-09-08

End Date: 2027-09-07

Contract Duration: 1,094 days

Daily Burn Rate: $129/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DIESEL HEATING FUEL FOR KASITSNA BAY LAB IN SELDOVIA, AK BASE YEAR

Place of Performance

Location: SELDOVIA, KENAI PENINSULA County, ALASKA, 99663

State: Alaska Government Spending

Plain-Language Summary

Department of Commerce obligated $141,000 to SELDOVIA FUEL AND LUBE, INC for work described as: DIESEL HEATING FUEL FOR KASITSNA BAY LAB IN SELDOVIA, AK BASE YEAR Key points: 1. Spending is for essential heating fuel for a remote research lab. 2. Sole-source award limits price discovery and potential savings. 3. Contract duration extends over three years, increasing long-term cost exposure. 4. Geographic isolation may justify limited competition, but requires scrutiny.

Value Assessment

Rating: fair

The $141,000 award for a three-year fuel supply appears reasonable given the remote location and specialized nature of the requirement. However, without competitive bidding, it's difficult to definitively assess if this represents the best value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed under Simplified Acquisition Procedures (SAP) and was awarded sole-source. This method bypasses competitive bidding, potentially leading to higher prices than if multiple vendors had submitted offers.

Taxpayer Impact: Taxpayer funds are used for this essential service. The lack of competition means potential savings may be forgone, impacting overall value for money.

Public Impact

Ensures operational continuity for a critical scientific research facility in a remote Alaskan location. Supports a local business, Seldovia Fuel and Lube, Inc., contributing to the regional economy. Highlights the challenges and costs associated with providing essential services in geographically isolated areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls under support activities for oil and gas operations, specifically providing fuel. Spending benchmarks for such services in remote, Arctic regions are highly variable due to logistical complexities and limited vendor pools.

Small Business Impact

The award went to Seldovia Fuel and Lube, Inc., a small business. While supporting small businesses is a priority, the sole-source nature of this award means competition was not leveraged to ensure the best price.

Oversight & Accountability

The Department of Commerce, through NOAA, is responsible for this award. Oversight should focus on ensuring the necessity of the sole-source justification and monitoring fuel price trends throughout the contract period.

Related Government Programs

Risk Flags

Tags

support-activities-for-oil-and-gas-opera, department-of-commerce, ak, purchase-order, 100k-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $141,000 to SELDOVIA FUEL AND LUBE, INC. DIESEL HEATING FUEL FOR KASITSNA BAY LAB IN SELDOVIA, AK BASE YEAR

Who is the contractor on this award?

The obligated recipient is SELDOVIA FUEL AND LUBE, INC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $141,000.

What is the period of performance?

Start: 2024-09-08. End: 2027-09-07.

What is the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for the sole-source award is not detailed in the provided data. Typically, sole-source awards are granted when only one responsible source can provide the required supplies or services. For remote locations, this might be due to limited infrastructure or vendor availability. However, a thorough review should confirm that no other vendors could have realistically met the need, even with modified contract terms or delivery methods.

How does the per-unit cost of diesel fuel compare to regional benchmarks, considering the remote delivery location?

Without specific per-unit pricing data and regional benchmarks for diesel fuel in remote Alaskan locations, a direct comparison is difficult. The $141,000 contract over three years suggests an average annual cost of approximately $47,000. This figure needs to be broken down into gallons to compare against market rates, factoring in the significant logistical costs associated with delivery to Kasitsna Bay Lab.

What measures are in place to mitigate price volatility for diesel fuel over the three-year contract term?

The contract is firm fixed price, which shifts the risk of price fluctuations to the contractor, Seldovia Fuel and Lube, Inc. However, this can also lead to higher initial pricing to account for anticipated volatility. The government should monitor market trends and ensure the fixed price remains competitive throughout the contract's duration, potentially through contract clauses or future renegotiations if market conditions drastically change.

Industry Classification

NAICS: Mining, Quarrying, and Oil and Gas ExtractionSupport Activities for MiningSupport Activities for Oil and Gas Operations

Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 141013-24-0128

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 319 MAIN STREET, SELDOVIA, AK, 99663

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $240,000

Exercised Options: $141,000

Current Obligation: $141,000

Actual Outlays: $72,121

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline

Start Date: 2024-09-08

Current End Date: 2027-09-07

Potential End Date: 2029-09-07 00:00:00

Last Modified: 2026-04-08

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