State Department awards $22.5M contract for diesel fuel to MEDCO, highlighting a competitive procurement process

Contract Overview

Contract Amount: $22,461 ($22.5K)

Contractor: Mediterranean OIL Shipping & Transport Company (medco) S.A.L.

Awarding Agency: Department of State

Start Date: 2026-01-29

End Date: 2026-02-26

Contract Duration: 28 days

Daily Burn Rate: $802/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DIESEL

Plain-Language Summary

Department of State obligated $22,460.61 to MEDITERRANEAN OIL SHIPPING & TRANSPORT COMPANY (MEDCO) S.A.L. for work described as: DIESEL Key points: 1. Contract awarded through full and open competition, suggesting a robust market for fuel supply. 2. The contract duration is short (28 days), indicating a need for immediate or short-term fuel provision. 3. FIRM FIXED PRICE contract type helps mitigate cost uncertainty for the government. 4. The award to MEDCO S.A.L. represents a specific instance of fuel procurement within the State Department's operational needs. 5. No small business set-aside was utilized, suggesting the primary competition was among larger entities. 6. The North American Industry Classification System (NAICS) code 454310 points to fuel dealers as the primary service provider.

Value Assessment

Rating: good

The contract value of $22.5 million for a 28-day delivery of diesel fuel appears substantial, but without specific quantity details or per-gallon pricing, a direct value-for-money assessment is challenging. Benchmarking against similar short-term fuel procurements by government agencies would be necessary to determine if the pricing is competitive. The fixed-price nature of the contract provides cost certainty, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The specific number of bidders is not provided, but the designation suggests a competitive environment where various suppliers had the opportunity to propose their services. This approach generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A full and open competition process maximizes the chances of obtaining the best possible price for taxpayers by allowing a wide range of qualified vendors to compete, driving down costs through market forces.

Public Impact

The primary beneficiaries are likely U.S. diplomatic missions and personnel requiring reliable diesel fuel for operations. Services delivered include the provision of diesel fuel, essential for powering generators, vehicles, and other critical equipment. The geographic impact is likely concentrated in regions where the State Department operates and requires fuel supply, potentially overseas. Workforce implications are minimal for the contracting agency, but the contractor will utilize its own workforce for delivery and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in the diesel market impacting the fixed-price contract if market conditions change drastically.
Dependence on a single contractor for a critical resource like fuel necessitates robust performance monitoring.
Geopolitical factors in the Mediterranean region could affect supply chain reliability for MEDCO.

Positive Signals

Awarded through full and open competition, indicating a competitive market and potential for good pricing.
Fixed-price contract type offers cost predictability for the government.
Contract specifies a clear delivery period, ensuring timely provision of essential fuel.

Sector Analysis

The energy sector, specifically fuel distribution and supply, is a critical component of global logistics. Government agencies, including the State Department, rely on consistent fuel access for their worldwide operations. This contract falls within the broader category of commodity procurement, where market dynamics, global supply, and geopolitical stability significantly influence pricing and availability. Comparable spending benchmarks would involve analyzing other government contracts for bulk diesel fuel, particularly those with similar delivery durations and geographic scopes.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the competition likely favored larger, established fuel suppliers capable of meeting the scale and logistical demands of this contract. The impact on the small business ecosystem is therefore likely minimal for this specific award, as opportunities for small businesses may lie in supplying larger prime contractors rather than directly competing for this particular contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Accountability measures are embedded in the contract terms, including delivery schedules and fuel quality specifications. Transparency is facilitated by the public nature of federal contract awards, allowing for scrutiny. The Inspector General for the Department of State would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Fuel Procurement
General Services Administration (GSA) Schedules for Fuel
Overseas Contingency Operations (OCO) Funding
State Department Diplomatic Security Programs

Risk Flags

Potential supply chain disruption due to regional instability.
Short contract duration may indicate urgent or contingency needs.
Fixed-price contract risk if market prices fluctuate significantly.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $22,460.61 to MEDITERRANEAN OIL SHIPPING & TRANSPORT COMPANY (MEDCO) S.A.L.. DIESEL

Who is the contractor on this award?

The obligated recipient is MEDITERRANEAN OIL SHIPPING & TRANSPORT COMPANY (MEDCO) S.A.L..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $22,460.61.

What is the period of performance?

Start: 2026-01-29. End: 2026-02-26.

What is the historical spending pattern for diesel fuel by the Department of State, and how does this award compare?

Analyzing historical spending data for diesel fuel by the Department of State is crucial for context. Without access to specific historical databases, we can infer that the State Department requires significant fuel volumes for its global operations, including powering facilities and vehicles at embassies and consulates. Awards like this, especially if recurring, indicate a consistent need. Comparing this $22.5 million award to previous contracts would reveal trends in volume, pricing, and contractor utilization. For instance, if similar 28-day contracts have historically cost less or involved more bidders, it might suggest a shift in market conditions or a less competitive bidding environment for this specific award. Conversely, if this award aligns with or is better than historical benchmarks, it reinforces the effectiveness of the procurement process.

What are the specific performance expectations and quality standards for the diesel fuel to be delivered under this contract?

The contract likely specifies detailed performance expectations and quality standards for the diesel fuel to ensure it meets operational requirements and regulatory compliance. These standards typically include parameters such as cetane number, sulfur content, viscosity, and flash point, often referencing industry standards like ASTM D975. Performance expectations would encompass timely delivery to designated locations, proper handling and storage procedures, and potentially requirements for fuel testing and certification. Failure to meet these standards could result in contract penalties, rejection of the fuel, or termination. The fixed-price nature of the contract implies that the contractor bears the responsibility for meeting these quality and performance metrics within the agreed-upon price.

How does the contractor, MEDCO S.A.L., perform on other government contracts, and what is their track record?

Assessing MEDCO S.A.L.'s track record on other government contracts is vital for understanding their reliability and performance capabilities. A review of federal procurement databases (like SAM.gov or FPDS) would reveal past awards, contract values, and performance ratings. Key indicators include on-time delivery, quality of goods/services, adherence to contract terms, and any history of disputes, claims, or terminations. Positive past performance suggests a lower risk for this current contract. Conversely, a history of issues might warrant closer monitoring or necessitate additional assurances from the contractor. Understanding their experience with similar fuel procurements, especially for government entities, provides further insight into their suitability.

What is the potential impact of geopolitical instability in the Mediterranean region on this contract's execution?

Geopolitical instability in the Mediterranean region could pose significant risks to the execution of this diesel fuel contract awarded to MEDCO S.A.L. The region is prone to political tensions, conflicts, and disruptions to maritime and land-based transportation routes. Such instability can affect the availability of crude oil, refining capacity, and the cost of transporting refined diesel fuel to the delivery points. MEDCO S.A.L., being based in and operating within this region, is directly exposed to these risks. Potential impacts include delays in delivery, increased transportation costs (which, under a fixed-price contract, could strain the contractor's margins or lead to requests for equitable adjustments if contractually allowed), or even complete disruption of supply chains. The State Department would need to closely monitor the geopolitical climate and ensure contingency plans are in place.

Given the short duration (28 days), what is the likely operational context driving this specific procurement need?

The very short duration of this contract (28 days) strongly suggests an immediate, short-term, or contingency-based need for diesel fuel rather than a routine, long-term supply requirement. Possible operational contexts include emergency fuel replenishment due to unforeseen disruptions in regular supply chains, support for a specific short-term event or operation (e.g., a diplomatic conference, a temporary surge in personnel, or urgent facility maintenance), or bridging a gap until a longer-term contract is established. It could also represent a rapid response to a critical need in a location where fuel availability is uncertain. The urgency implied by the short timeframe underscores the importance of reliable delivery and the potential risks associated with supply interruptions.

Industry Classification

NAICS: Retail Trade › Direct Selling Establishments › Fuel Dealers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: GEBRAN TUEINI SQUARE, TABARIS AREA, MAR MAROUN SECTOR, BEIRUT

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $22,461

Exercised Options: $22,461

Current Obligation: $22,461

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19LE2022D0001

IDV Type: IDC

Timeline