DoD Spent $9.6M on Fuel Oils from Truman Arnold Companies, Raising Questions on Value and Competition

Contract Overview

Contract Amount: $10,589,723 ($10.6M)

Contractor: Truman Arnold Companies

Awarding Agency: Department of Defense

Start Date: 2005-10-14

End Date: 2009-06-30

Contract Duration: 1,355 days

Daily Burn Rate: $7.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 42

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: 200611!002511!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060004D4537 !A!N! !N!B001 !13 !20051014!20090630!958992265!958992265!027139807!N!TRUMAN ARNOLD COMPANIES !701 SOUTH ROBISON ROAD !TEXARKANA !TX!75501!72176!027!48!TEMPLE !BELL !TEXAS !+000000054034!N!Y!000000000000!9140!FUEL OILS !A8A!PETROLEUM !000 !NOT DISCERNABLE !424720!E! !3!A!S!C! ! !99990909!B! ! !A! !A!U!K!2!042!B! !Z!N!Z! ! !Y!B!N!N! ! !D! !A!A!000!A!B!N! ! ! ! !5700! !0001! !

Place of Performance

Location: TEXARKANA, BOWIE County, TEXAS, 75501

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $10.6 million to TRUMAN ARNOLD COMPANIES for work described as: 200611!002511!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060004D4537 !A!N! !N!B001 !13 !20051014!20090630!958992265!958992265!027139807!N!TRUMAN ARNOLD COMPANIES !701 SOUTH ROBISON ROAD !TEXARKANA !TX!75501!72176!027!48!TEMPLE !BELL… Key points: 1. Significant spending on fuel oils highlights reliance on specific suppliers. 2. The contract's fixed-price with economic adjustment structure may expose taxpayers to price volatility. 3. Limited competition raises concerns about potential overpayment and lack of market responsiveness. 4. The sector is critical for defense operations, making supply chain resilience a key factor.

Value Assessment

Rating: questionable

The contract value of $9.6M over 4 years for fuel oils appears high, especially given the fixed-price with economic adjustment terms. Benchmarking against similar fuel contracts is difficult without more granular data, but the scale suggests potential for cost savings through competitive bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While listed as 'full and open competition,' the award to a single entity, Truman Arnold Companies, suggests potential limitations in the bidding process or a lack of responsive bidders. This could lead to less favorable pricing than a truly competitive environment.

Taxpayer Impact: The economic price adjustment clause could increase the final cost to taxpayers if fuel prices rise significantly during the contract period, without a corresponding increase in the value or quantity of fuel provided.

Public Impact

Taxpayers may have overpaid for fuel due to potentially limited competition and price adjustment clauses. The Department of Defense's reliance on a single supplier for a critical commodity like fuel oils could pose a supply chain risk. The contract duration and value warrant scrutiny to ensure efficient use of public funds.

Waste & Efficiency Indicators

Waste Risk Score: 70 / 10

Warning Flags

Potential for overpayment due to limited competition.
Economic price adjustment clause introduces cost uncertainty.
Lack of transparency in the 'full and open' competition process.

Positive Signals

Contract awarded to a known entity in the petroleum sector.
Ensured supply of critical fuel oils for defense operations.

Sector Analysis

This contract falls within the petroleum products wholesale sector, crucial for supporting military operations. Spending benchmarks for fuel procurement can vary widely based on geopolitical factors, market conditions, and contract terms. The $9.6M value is substantial for a single contract in this category.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or if the prime contractor is a small business. Further investigation would be needed to assess small business participation.

Oversight & Accountability

The contract was awarded by the Defense Logistics Agency, a component of the Department of Defense, which typically has established oversight mechanisms. However, the specifics of oversight for this particular contract, especially regarding the price adjustment and competition fairness, are not detailed.

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 inflated costs due to limited competition.
Exposure to market volatility through economic price adjustments.
Lack of detailed cost breakdown and per-unit pricing.
Unclear effectiveness of the 'full and open competition' process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.6 million to TRUMAN ARNOLD COMPANIES. 200611!002511!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060004D4537 !A!N! !N!B001 !13 !20051014!20090630!958992265!958992265!027139807!N!TRUMAN ARNOLD COMPANIES !701 SOUTH ROBISON ROAD !TEXARKANA !TX!75501!72176!027!48!TEMPLE !BELL !TEXAS !+000000054034!N!Y!000000000000!9140!FUEL OILS !A8A!PETROLEUM !000 !NOT DISCERNABLE !424720!E! !3!A!S!C! ! !999

Who is the contractor on this award?

The obligated recipient is TRUMAN ARNOLD COMPANIES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $10.6 million.

What is the period of performance?

Start: 2005-10-14. End: 2009-06-30.

What was the actual price paid per unit of fuel oil, and how does it compare to market rates during the contract period?

The provided data does not include the per-unit price paid for fuel oils. To assess value, a detailed analysis of the economic price adjustments and the base price against prevailing market rates during the 2005-2009 period would be necessary. This would reveal if the government paid a premium or secured a favorable rate despite the contract's structure.

Were there genuine market limitations that restricted competition, or were there procedural issues that deterred potential bidders?

The 'full and open competition' designation alongside a single awardee suggests a potential disconnect. Investigations could explore if specific requirements, delivery locations, or contract terms inadvertently limited the bidder pool. Alternatively, a review of the solicitation and award process might reveal procedural shortcomings that discouraged broader participation, impacting price discovery.

How effectively did the economic price adjustment clause protect the government from excessive price increases while allowing for necessary adjustments?

The effectiveness of the economic price adjustment clause hinges on the specific index used and the caps or floors in place. Without these details, it's difficult to assess. A review would need to compare the actual price fluctuations against the index and determine if the government bore undue risk or benefited from legitimate market corrections.

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: 42

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 3513 S W HK DODGEN LOOP, TEMPLE, TX, 31

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060004D4537

IDV Type: IDC

Timeline