DOE Awards $5M Contract for 200,000 ULSD Barrels in Northeast Heating Oil Reserve
Contract Overview
Contract Amount: $5,025,828 ($5.0M)
Contractor: Global Companies LLC
Awarding Agency: Department of Energy
Start Date: 2024-03-29
End Date: 2027-03-31
Contract Duration: 1,097 days
Daily Burn Rate: $4.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: THE NORTHEAST HOME HEATING OIL RESERVE (NEHHOR) STORAGE OF 200,000 ULSD IN CHELSEA, MA.
Place of Performance
Location: CHELSEA, SUFFOLK County, MASSACHUSETTS, 02150
Plain-Language Summary
Department of Energy obligated $5.0 million to GLOBAL COMPANIES LLC for work described as: THE NORTHEAST HOME HEATING OIL RESERVE (NEHHOR) STORAGE OF 200,000 ULSD IN CHELSEA, MA. Key points: 1. The contract supports the Northeast Home Heating Oil Reserve (NEHHOR) with a significant volume of ultra-low sulfur diesel (ULSD). 2. Global Companies LLC secured the award, indicating a competitive procurement process. 3. The fixed-price contract structure aims to control costs for this essential energy reserve. 4. This initiative addresses regional energy security and potential supply disruptions.
Value Assessment
Rating: good
The contract value of $5,025,828 for 200,000 barrels of ULSD appears reasonable given market prices for refined petroleum products. Benchmarking against similar storage or supply contracts would provide a more precise assessment.
Cost Per Unit: $25.13 per barrel
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing as multiple qualified vendors can bid.
Taxpayer Impact: The firm fixed-price contract aims to protect taxpayers from potential price volatility in the diesel market, ensuring a predictable cost for the reserve.
Public Impact
Ensures energy security for the Northeast region during winter months. Provides a buffer against potential supply chain disruptions or price spikes. Supports the Department of Energy's strategic petroleum reserve initiatives. Contributes to economic stability by mitigating heating fuel shortages.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price fluctuations impacting long-term reserve costs.
- Dependence on a single supplier for a critical resource.
- Logistical challenges in distribution during an emergency.
Positive Signals
- Strategic importance for regional energy security.
- Competitive bidding process likely secured favorable pricing.
- Fixed-price contract provides cost certainty.
Sector Analysis
The energy sector, particularly refined products storage and distribution, is critical for national infrastructure. This contract falls within the broader warehousing and storage sub-sector, supporting essential energy commodities.
Small Business Impact
The contract was awarded to Global Companies LLC, a large entity. There is no indication that small businesses were involved as prime contractors or significant subcontractors in this specific award.
Oversight & Accountability
The Department of Energy is responsible for managing the NEHHOR. Oversight would involve monitoring contract performance, ensuring compliance with terms, and verifying the quality and quantity of stored fuel.
Related Government Programs
- Other Warehousing and Storage
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Geographic concentration of reserve storage.
- Potential for fuel degradation over the contract period.
- Reliance on specific transportation infrastructure for delivery.
- Market volatility impacting the value of stored fuel.
Tags
other-warehousing-and-storage, department-of-energy, ma, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $5.0 million to GLOBAL COMPANIES LLC. THE NORTHEAST HOME HEATING OIL RESERVE (NEHHOR) STORAGE OF 200,000 ULSD IN CHELSEA, MA.
Who is the contractor on this award?
The obligated recipient is GLOBAL COMPANIES LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $5.0 million.
What is the period of performance?
Start: 2024-03-29. End: 2027-03-31.
What is the long-term cost-effectiveness of maintaining this reserve compared to alternative energy security measures?
Assessing long-term cost-effectiveness requires analyzing storage costs, potential price hedging strategies, and the economic impact of averted shortages. Comparing this to investments in diversified energy sources or enhanced grid resilience would provide a comprehensive view of value.
What are the specific risks associated with the physical storage of 200,000 barrels of ULSD in Chelsea, MA?
Risks include potential environmental hazards (spills, leaks), security threats (theft, sabotage), and degradation of fuel quality over time. Mitigation strategies involve robust safety protocols, regular inspections, and adherence to environmental regulations.
How effectively does this reserve mitigate the impact of extreme weather events on regional heating oil availability?
The reserve provides a critical buffer against immediate supply disruptions caused by extreme weather impacting transportation or production. Its effectiveness depends on the duration of the disruption, the volume available, and the speed of distribution to end-users.
Industry Classification
NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage
Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 89243524RCR000014
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 800 SOUTH ST STE 500, WALTHAM, MA, 02453
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $6,802,620
Exercised Options: $5,025,828
Current Obligation: $5,025,828
Actual Outlays: $3,021,660
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2024-03-29
Current End Date: 2027-03-31
Potential End Date: 2028-03-31 00:00:00
Last Modified: 2026-03-27
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