Propane delivery services contract awarded to Ferrellgas, L.P. for over $1.37M by IHS

Contract Overview

Contract Amount: $137,313 ($137.3K)

Contractor: Ferrellgas, L.P

Awarding Agency: Department of Health and Human Services

Start Date: 2021-04-12

End Date: 2026-07-18

Contract Duration: 1,923 days

Daily Burn Rate: $71/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CONTRACTOR SHALL PROVIDE ALL LABOR, MATERIALS, TOOLS, EQUIPMENT, AND TRANSPORTATION TO PROVIDE PROPANE AND DELIVERY SERVICES TO THE PEACH SPRINGS INDIAN HEALTH CENTER.

Place of Performance

Location: PEACH SPRINGS, MOHAVE County, ARIZONA, 86434

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $137,313.37 to FERRELLGAS, L.P for work described as: CONTRACTOR SHALL PROVIDE ALL LABOR, MATERIALS, TOOLS, EQUIPMENT, AND TRANSPORTATION TO PROVIDE PROPANE AND DELIVERY SERVICES TO THE PEACH SPRINGS INDIAN HEALTH CENTER. Key points: 1. Value for money assessed through competitive bidding process. 2. Competition dynamics indicate a potentially favorable pricing environment. 3. Risk indicators include contract duration and reliance on a single supplier. 4. Performance context relies on timely delivery and service quality. 5. Sector positioning within essential healthcare support services. 6. Contract type is firm fixed price, offering cost predictability.

Value Assessment

Rating: good

The contract value of $1.37M over approximately five years suggests a steady demand for propane services at the Peach Springs Indian Health Center. Benchmarking against similar contracts for bulk fuel delivery to remote or specialized facilities is necessary for a precise value assessment. However, the firm fixed-price structure provides cost certainty for the agency, mitigating risks associated with fuel price volatility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under the Simplified Acquisition Procedures (SAP), suggesting a competitive process was utilized for awards below certain thresholds. While the specific number of bidders is not detailed, the use of SAP generally implies an effort to solicit multiple offers. This level of competition, even under SAP, is expected to drive reasonable pricing and ensure the government receives fair value.

Taxpayer Impact: The competitive nature of this award, even under simplified procedures, suggests taxpayers benefit from a more efficient allocation of funds compared to a sole-source procurement.

Public Impact

Benefits the Peach Springs Indian Health Center by ensuring a consistent supply of propane for essential operations. Delivers critical fuel services necessary for heating, power generation, and other facility needs. Geographic impact is localized to the Peach Springs, Arizona area. Workforce implications are primarily related to the delivery and maintenance personnel employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases after the initial contract period if future competition is limited.
Reliance on a single contractor for a critical utility could pose supply chain risks.
Ensuring consistent quality of service and timely delivery throughout the contract duration.

Positive Signals

Competitive award process likely secured favorable initial pricing.
Firm fixed-price contract provides budget stability for the agency.
Contract supports essential healthcare services, aligning with agency mission.

Sector Analysis

This contract falls within the broader energy and utilities sector, specifically focusing on the supply and delivery of petroleum products. The market for bulk propane is characterized by regional suppliers and distribution networks. Contracts like this are common across various federal agencies and military installations requiring reliable fuel sources for operations, especially in locations where access to natural gas pipelines is limited.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. The award to Ferrellgas, L.P., a known large supplier, suggests that small business participation may be limited unless Ferrellgas engages them for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and the program managers within the Indian Health Service. Accountability is ensured through the terms and conditions of the purchase order, including delivery schedules and service level expectations. Transparency is maintained through federal procurement databases where contract awards are reported.

Related Government Programs

Federal Bulk Fuel Purchasing Programs
Indian Health Service Facility Operations
Energy Supply Contracts for Government Facilities

Risk Flags

Potential for price increases over contract duration if market rates rise significantly.
Reliance on a single supplier for a critical utility.
Need for ongoing monitoring of delivery performance and service quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $137,313.37 to FERRELLGAS, L.P. CONTRACTOR SHALL PROVIDE ALL LABOR, MATERIALS, TOOLS, EQUIPMENT, AND TRANSPORTATION TO PROVIDE PROPANE AND DELIVERY SERVICES TO THE PEACH SPRINGS INDIAN HEALTH CENTER.

Who is the contractor on this award?

The obligated recipient is FERRELLGAS, L.P.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $137,313.37.

What is the period of performance?

Start: 2021-04-12. End: 2026-07-18.

What is Ferrellgas, L.P.'s track record with federal contracts, particularly for fuel delivery?

Ferrellgas, L.P. has a significant history of securing federal contracts across various agencies, including the Department of Defense and the General Services Administration, for propane and other fuel supplies. Their track record generally indicates experience in managing large-scale fuel delivery logistics. Analysis of past performance reviews and any documented disputes or contract terminations would provide further insight into their reliability and adherence to federal procurement standards. While specific details for this particular contract's performance are not yet available due to its duration, their broader federal contracting history suggests a capacity to fulfill such requirements.

How does the awarded price compare to market rates for propane delivery in Arizona?

A precise comparison of the awarded price to market rates requires detailed analysis of propane pricing indices for the specific region (Peach Springs, AZ) and the contract duration. The contract's firm fixed-price nature means the rate is set for the duration, which could be advantageous if market prices rise but disadvantageous if they fall significantly. Benchmarking would involve examining average per-gallon costs for similar delivery volumes and service levels to other government or commercial entities in Arizona during the contract period. Without access to real-time market data specific to the contract's inception and duration, a definitive value-for-money assessment relative to market fluctuations is challenging.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential supply disruptions due to weather, transportation issues, or contractor performance failures, and price volatility if the fixed price becomes uncompetitive over the contract's multi-year term. Mitigation strategies typically involve clear performance standards in the contract, regular communication between the agency and contractor, and contingency planning by the Indian Health Service for alternative fuel sources or emergency deliveries. The firm fixed-price structure itself mitigates the risk of budget overruns due to price increases for the agency, shifting that risk to the contractor.

What is the historical spending pattern for propane delivery services at the Peach Springs Indian Health Center?

Historical spending data for propane delivery at the Peach Springs Indian Health Center would provide crucial context for evaluating the current contract's value and necessity. Analyzing past purchase orders or contracts for similar services would reveal trends in volume, pricing, and contractor choices. If previous spending was significantly lower or higher, it would warrant investigation into changes in facility needs, energy efficiency measures, or market conditions. Understanding this history helps determine if the current $1.37M award represents an increase, decrease, or stable level of expenditure for this essential service.

What is the significance of the contract being awarded under Simplified Acquisition Procedures (SAP)?

Awarding the contract under Simplified Acquisition Procedures (SAP) indicates that the total anticipated value was below the statutory threshold for full and open competition (typically $250,000, though this can be adjusted for inflation and specific circumstances). SAP allows for more streamlined procurement processes, aiming for efficiency and faster award times for smaller value contracts. While it implies a competitive process was still intended, the documentation and justification requirements are less rigorous than for larger contracts, potentially limiting the depth of competition or the visibility of the process compared to larger, formally advertised procurements.

Industry Classification

NAICS: Wholesale Trade › Petroleum and Petroleum Products Merchant Wholesalers › Petroleum Bulk Stations and Terminals

Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 75H71221Q00011

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ferrellgas Partners, L.P.

Address: 7500 COLLEGE BLVD STE 1000, OVERLAND PARK, KS, 66210

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $137,313

Exercised Options: $137,313

Current Obligation: $137,313

Actual Outlays: $88,095

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline