National Gallery of Art awards $30.1M contract for fuel, with a 729-day duration

Contract Overview

Contract Amount: $30,100 ($30.1K)

Contractor: Fannon Petroleum Services, Inc.

Awarding Agency: National Gallery of Art

Start Date: 2025-05-01

End Date: 2027-04-30

Contract Duration: 729 days

Daily Burn Rate: $41/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FUEL

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20004

State: District of Columbia Government Spending

Plain-Language Summary

National Gallery of Art obligated $30,100 to FANNON PETROLEUM SERVICES, INC. for work described as: FUEL Key points: 1. Contract value of $30.1 million over approximately two years suggests a significant but potentially standard expenditure for fuel services. 2. The contract was competed under SAP, indicating a streamlined procurement process that may prioritize efficiency over broad market engagement. 3. A single award for fuel services raises questions about the extent of competition and potential price optimization. 4. The firm fixed-price structure provides cost certainty for the agency but shifts risk to the contractor. 5. The contract's duration of 729 days aligns with typical fuel supply agreements, balancing stability with flexibility. 6. The geographic focus on the District of Columbia is specific to the National Gallery of Art's operational needs.

Value Assessment

Rating: fair

The contract value of $30.1 million for fuel services over two years averages approximately $1.25 million per month. Benchmarking this against similar federal fuel contracts is challenging without specific volume and type of fuel data. However, the total amount appears substantial, and a detailed cost breakdown would be necessary to fully assess value for money. The firm fixed-price nature means the agency has cost certainty, but the contractor bears the risk of fluctuating market prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under SAP (Simplified Acquisition Procedures), which is typically used for procurements valued below certain thresholds, often implying a more streamlined process. While 'full-and-open' suggests broad solicitation, the use of SAP might limit the number of potential bidders compared to larger, more complex solicitations. The specific number of bidders is not provided, making it difficult to definitively assess the level of competition and its impact on price discovery.

Taxpayer Impact: The use of SAP for this contract suggests an effort to achieve efficiency in the procurement process. While aiming for full and open competition, the specific procedures under SAP may influence the number of bids received, potentially impacting the final price achieved for taxpayers.

Public Impact

The National Gallery of Art benefits from a reliable and consistent supply of fuel, essential for its operations. This contract ensures the uninterrupted functioning of the museum's facilities, including climate control, security, and general operations. The primary geographic impact is within the District of Columbia, supporting the local infrastructure and services required by the Gallery. While not directly creating new jobs, the contract supports the existing workforce at the National Gallery of Art by ensuring operational continuity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for higher costs if market fuel prices significantly exceed projections within the firm fixed-price contract.
Limited visibility into the contractor's specific cost structure and profit margins due to the simplified acquisition process.
Reliance on a single contractor for a critical utility service could pose a risk if the contractor faces performance issues or financial instability.

Positive Signals

Firm fixed-price contract provides budget certainty for the National Gallery of Art.
The contract duration of approximately two years offers a stable period for fuel supply.
Competition under SAP aims for efficiency, potentially reducing administrative overhead for the procurement.

Sector Analysis

The energy sector, specifically fuel supply, is a critical component of operational infrastructure for many government agencies. This contract falls within the broader category of utility services. The market for fuel supply is generally competitive, with numerous providers. However, the specific type of fuel and delivery logistics can influence market dynamics and pricing. Comparable spending benchmarks for fuel at similar cultural institutions or federal facilities in the DC area would provide further context.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside criterion for this contract. Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside requirement. The primary contractor, Fannon Petroleum Services, Inc., is not identified as a small business in the provided data.

Oversight & Accountability

Oversight for this contract would primarily reside with the National Gallery of Art's contracting officers and program managers. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is facilitated through public contract databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or alleged.

Related Government Programs

Federal Energy Management Program
General Services Administration (GSA) Schedules for Fuel
Utility Services Contracts

Risk Flags

Potential for price volatility risk transfer to contractor under FFP.
Use of SAP for a large contract value may limit competitive intensity.
Lack of detailed performance metrics in provided data.

Frequently Asked Questions

What is this federal contract paying for?

National Gallery of Art awarded $30,100 to FANNON PETROLEUM SERVICES, INC.. FUEL

Who is the contractor on this award?

The obligated recipient is FANNON PETROLEUM SERVICES, INC..

Which agency awarded this contract?

Awarding agency: National Gallery of Art (National Gallery of Art).

What is the total obligated amount?

The obligated amount is $30,100.

What is the period of performance?

Start: 2025-05-01. End: 2027-04-30.

What is the historical spending pattern for fuel at the National Gallery of Art over the past five years?

Analyzing historical spending on fuel at the National Gallery of Art would provide crucial context for the current $30.1 million award. Without specific historical data, it's difficult to determine if this contract represents an increase, decrease, or stable expenditure. Past contracts could reveal trends in fuel prices, consumption volumes, and the types of fuel procured. Understanding these patterns would help assess whether the current contract's value is consistent with past needs and market conditions, or if it indicates a significant shift in operational requirements or pricing strategies. For instance, a substantial increase might warrant further investigation into the reasons behind it, such as expanded operations or significant price hikes.

How does the per-unit cost of fuel in this contract compare to market rates or similar federal contracts?

A direct comparison of the per-unit cost of fuel for this $30.1 million contract against market rates or similar federal contracts is not possible with the provided data. The contract specifies a total value and duration but lacks details on the specific type of fuel (e.g., diesel, gasoline, heating oil), the quantity to be delivered, and the pricing mechanism beyond 'firm fixed price.' To perform this benchmark, one would need to know the projected volume of fuel and the corresponding price per unit (e.g., per gallon or per liter). Comparing this unit price to published indices for fuel commodities or to unit prices from other federal fuel contracts awarded in the same region and timeframe would be necessary to assess value for money.

What is Fannon Petroleum Services, Inc.'s track record with federal contracts, particularly for fuel supply?

Fannon Petroleum Services, Inc. has a track record of federal contracting, as evidenced by this award. To assess their performance, a review of their contract history with federal agencies would be necessary. This would involve examining past awards, contract values, durations, and performance evaluations (if publicly available). Specifically, looking for previous fuel supply contracts would be most relevant. A history of successful, on-time deliveries and adherence to contract terms would indicate reliability. Conversely, any past performance issues, disputes, or contract terminations could raise concerns about their capacity to fulfill the current $30.1 million award effectively. Information from sources like the Federal Procurement Data System (FPDS) or SAM.gov would be essential.

What are the specific risks associated with a firm fixed-price contract for fuel, given market volatility?

A firm fixed-price (FFP) contract for fuel, while offering budget certainty to the National Gallery of Art, carries inherent risks related to market volatility. Fuel prices are subject to significant fluctuations due to geopolitical events, supply and demand dynamics, and economic conditions. Under an FFP contract, the contractor, Fannon Petroleum Services, Inc., assumes the risk of these price changes. If market prices rise substantially above the contracted rate, the contractor may experience reduced profit margins or even losses, potentially impacting their motivation or ability to perform. Conversely, if prices fall, the government misses out on potential savings. The risk for the government lies in the contractor potentially cutting corners on service quality or delivery if they are losing money, or in the possibility of the contractor seeking contract modifications if the price swings are extreme and unforeseen.

How does the procurement method 'Competed Under SAP' impact the potential for cost savings compared to other methods?

Procuring under Simplified Acquisition Procedures (SAP) is designed for efficiency and speed, typically for contracts valued below the simplified acquisition threshold (currently $250,000, though specific agency thresholds can vary, and this contract is significantly above that). However, the data states 'COMPETED UNDER SAP' for a $30.1 million contract, which is unusual and may indicate a specific agency interpretation or a typo in the data provided, as SAP is generally for smaller procurements. If indeed SAP procedures were followed for a contract of this magnitude, it might imply a less rigorous competition process than full and open competition using sealed bids or other formal methods. This could potentially lead to less aggressive pricing from bidders, as the administrative burden and scope of competition might be reduced. While SAP aims for efficiency, it may not always yield the lowest possible price compared to a highly competitive, large-scale procurement process.

Industry Classification

NAICS: Public Administration › Administration of Economic Programs › Regulation and Administration of Communications, Electric, Gas, and Other Utilities

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

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 333011-25-RRP-0009

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13330 UNIVERSITY BLVD, GAINESVILLE, VA, 20155

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $70,014

Exercised Options: $30,100

Current Obligation: $30,100

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline