DoD awards $12.7M for petroleum products to Conectiv Energy Supply, Inc. under full and open competition
Contract Overview
Contract Amount: $12,725,707 ($12.7M)
Contractor: Conectiv Energy Supply, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-09-28
End Date: 2010-08-30
Contract Duration: 1,797 days
Daily Burn Rate: $7.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 43
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Place of Performance
Location: ANDREWS AFB, PRINCE GEORGE'S County, MARYLAND, 20762
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $12.7 million to CONECTIV ENERGY SUPPLY, INC. for work described as: Key points: 1. Contract awarded to Conectiv Energy Supply, Inc. for petroleum products. 2. Significant value of $12.7 million over nearly 5 years. 3. Procurement method was full and open competition. 4. Contract type is Fixed Price with Economic Price Adjustment. 5. Sector is Petroleum and Petroleum Products Merchant Wholesalers.
Value Assessment
Rating: fair
The contract value of $12.7 million over almost 5 years averages to approximately $2.5 million annually. Without specific benchmarks for petroleum products of this nature, it's difficult to definitively assess pricing, but it appears within a reasonable range for bulk supply.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing and ensures the government receives the best value. The specific price discovery mechanism is tied to the economic price adjustment clause.
Taxpayer Impact: Taxpayers benefit from competitive bidding, which aims to secure favorable pricing for essential petroleum products. The economic price adjustment clause, however, introduces potential for price fluctuations.
Public Impact
Ensures consistent supply of critical petroleum products for Department of Defense operations. Supports energy security and operational readiness through reliable fuel sourcing. Potential for price volatility due to the economic price adjustment clause impacts budget predictability.
Waste & Efficiency Indicators
Waste Risk Score: 70 / 10
Warning Flags
- Economic price adjustment may lead to cost overruns.
- Dependence on a single supplier for a critical commodity.
Positive Signals
- Full and open competition likely secured competitive pricing.
- Long-term contract provides supply stability.
- Fixed price component offers some cost certainty.
Sector Analysis
This contract falls within the Petroleum and Petroleum Products Merchant Wholesalers sector, specifically for wholesale distribution excluding bulk storage. Spending in this sector is crucial for national defense and infrastructure, with benchmarks varying based on global commodity prices and geopolitical factors.
Small Business Impact
The data indicates this contract was not set aside for small businesses and was awarded to Conectiv Energy Supply, Inc. Further analysis would be needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
The contract duration of nearly 5 years suggests a need for ongoing oversight to ensure performance standards are met and that the economic price adjustment is applied fairly and transparently, aligning with federal procurement regulations.
Related Government Programs
- Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Dependence on market price volatility for a critical commodity.
- Lack of specific unit cost data for detailed benchmarking.
- Limited information on small business participation.
Tags
petroleum-and-petroleum-products-merchan, department-of-defense, md, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.7 million to CONECTIV ENERGY SUPPLY, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is CONECTIV ENERGY SUPPLY, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $12.7 million.
What is the period of performance?
Start: 2005-09-28. End: 2010-08-30.
What was the average annual cost of petroleum products under this contract, and how does it compare to market rates at the time?
The contract's total value of $12.7 million over 1797 days (approx. 4.9 years) averages to roughly $2.59 million per year. Comparing this to market rates would require detailed historical data on petroleum prices during the contract period (2005-2010) and specific product types to assess if the government secured a competitive price.
What specific risks are associated with the 'Fixed Price with Economic Price Adjustment' contract type for petroleum products?
The primary risk is cost escalation due to fluctuations in global oil prices, which can exceed initial budget projections. While the fixed price component offers some stability, the economic adjustment clause means the government is exposed to market volatility, potentially leading to higher-than-anticipated expenditures and impacting budget predictability.
How effectively did the 'full and open competition' method ensure value for money in this petroleum supply contract?
Full and open competition is designed to maximize value by encouraging multiple bids. Assuming a robust bidding process, it likely led to competitive pricing. However, the effectiveness in securing long-term value is also influenced by the contract terms, particularly the economic price adjustment, which could mitigate initial savings if prices rise significantly.
Industry Classification
NAICS: Wholesale Trade › Petroleum and Petroleum Products Merchant Wholesalers › Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 43
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Pepco Holdings LLC (UEI: 105895010)
Address: 180 GORDON DR STE 103, EXTON, PA, 06
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $12,725,707
Exercised Options: $1,248
Current Obligation: $12,725,707
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060005D4061
IDV Type: IDC
Timeline
Start Date: 2005-09-28
Current End Date: 2010-08-30
Potential End Date: 2010-08-30 00:00:00
Last Modified: 2009-10-28
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