DoD's $42M Petroleum Contract with PRO PETROLEUM INC. Awarded via Full and Open Competition
Contract Overview
Contract Amount: $42,094,091 ($42.1M)
Contractor: PRO Petroleum Incorporated
Awarding Agency: Department of Defense
Start Date: 2005-04-04
End Date: 2009-09-30
Contract Duration: 1,640 days
Daily Burn Rate: $25.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 33
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: LSS, LS2, MRR, DL1, DL2, MUR
Place of Performance
Location: LAGUNA HILLS, ORANGE County, CALIFORNIA, 92653
Plain-Language Summary
Department of Defense obligated $42.1 million to PRO PETROLEUM INCORPORATED for work described as: LSS, LS2, MRR, DL1, DL2, MUR Key points: 1. Contract awarded to PRO PETROLEUM INC. for petroleum products. 2. Significant value of $42,094,090.65 over its duration. 3. Procurement method was 'Full and Open Competition'. 4. Sector is Petroleum and Petroleum Products Merchant Wholesalers. 5. Contract type is Fixed Price with Economic Price Adjustment.
Value Assessment
Rating: fair
The contract value of $42M is substantial. Without specific benchmarks for petroleum products under similar fixed-price with economic adjustment contracts, a precise value assessment is difficult. However, the duration and scope suggest a significant expenditure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition', indicating a broad solicitation process. This method is generally expected to yield competitive pricing, though the specific price discovery mechanisms and outcomes require further analysis.
Taxpayer Impact: Taxpayer funds are being utilized for the procurement of essential petroleum products for the Department of Defense. The competitive nature of the award aims to ensure reasonable pricing.
Public Impact
Ensures supply of critical petroleum products for military operations. Potential for price fluctuations due to economic price adjustment clause. Supports the wholesale petroleum distribution sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may lead to cost overruns.
- Lack of small business participation noted.
Positive Signals
- Awarded through full and open competition.
- Contract duration of over 4 years.
Sector Analysis
The petroleum and petroleum products merchant wholesalers sector is vital for logistics and energy supply chains. This contract represents a significant portion of spending within this niche, supporting national defense needs.
Small Business Impact
The data indicates that small business participation was not a factor in this contract award (ss: false, sb: false). This suggests the prime contractor is likely a larger entity, and there's no indication of subcontracting to small businesses.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a key component of the Department of Defense responsible for logistics support. Oversight would typically involve contract management and performance monitoring by the DLA.
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 increases due to EPA.
- No small business participation.
- Long contract duration increases exposure to market volatility.
- Reliance on a single prime contractor for a critical commodity.
Tags
petroleum-and-petroleum-products-merchan, department-of-defense, ca, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.1 million to PRO PETROLEUM INCORPORATED. LSS, LS2, MRR, DL1, DL2, MUR
Who is the contractor on this award?
The obligated recipient is PRO PETROLEUM INCORPORATED.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $42.1 million.
What is the period of performance?
Start: 2005-04-04. End: 2009-09-30.
What is the typical price range for similar petroleum products under fixed-price with economic adjustment contracts to assess value?
Assessing the value requires comparing the awarded prices against market benchmarks for similar petroleum products procured under fixed-price contracts with economic price adjustment clauses. Factors like volume, delivery locations, and specific product grades influence pricing. Without access to detailed pricing data and market analysis for this specific period, it's challenging to definitively state if the $42M represents optimal value.
What are the specific risks associated with the economic price adjustment clause in this contract?
The primary risk of an economic price adjustment (EPA) clause is cost escalation for the government. Fluctuations in fuel prices, raw material costs, or other economic factors can lead to increased contract costs beyond initial projections. This necessitates careful monitoring of market trends and the EPA's application to mitigate potential overspending and ensure budget predictability.
How effectively did the 'Full and Open Competition' process ensure competitive pricing for these petroleum products?
Full and Open Competition is designed to maximize the number of potential bidders, thereby fostering a competitive environment that should lead to favorable pricing. However, the effectiveness depends on the specific market conditions, the clarity of the solicitation, and the number of qualified bidders who responded. Without bid data, it's presumed competitive, but the actual price discovery outcome requires deeper analysis.
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
Solicitation ID: SP060004R0094
Offers Received: 33
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 26072 MERIT CIRCLE, SUITE, LAGUNA HILLS, CA, 40
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $42,094,091
Exercised Options: $42,094,091
Current Obligation: $42,094,091
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060005D4535
IDV Type: IDC
Timeline
Start Date: 2005-04-04
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2010-09-20
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