DoD Spent $19.2M on Turbine Fuel (JA1) from Mercury Air Centers under Full and Open Competition
Contract Overview
Contract Amount: $19,167,842 ($19.2M)
Contractor: Mercury AIR Centers
Awarding Agency: Department of Defense
Start Date: 2005-04-01
End Date: 2009-06-30
Contract Duration: 1,551 days
Daily Burn Rate: $12.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 22
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: TURBINE FUEL, AVIATION (JA1)
Place of Performance
Location: TULSA, TULSA County, OKLAHOMA, 74115
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $19.2 million to MERCURY AIR CENTERS for work described as: TURBINE FUEL, AVIATION (JA1) Key points: 1. Spending on aviation turbine fuel (JA1) reached $19.2 million. 2. Mercury Air Centers was the sole contractor for this period. 3. The contract was awarded under full and open competition. 4. The sector is Petroleum and Petroleum Products Merchant Wholesalers. 5. Fixed Price with Economic Price Adjustment contract type was used.
Value Assessment
Rating: fair
The contract price for turbine fuel (JA1) was subject to economic price adjustments, making direct comparison difficult without specific adjustment data. The base price of $12,358 for a 1551-day duration contract needs further analysis against market rates at the time of award.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the use of Fixed Price with Economic Price Adjustment may have limited the price certainty and potential savings compared to a firm fixed price.
Taxpayer Impact: Taxpayers likely paid a fair market price due to competition, but the economic price adjustment clause could have led to higher costs than anticipated if fuel prices rose significantly.
Public Impact
Ensures critical aviation fuel supply for Department of Defense operations. Supports the petroleum products wholesale sector. Price fluctuations could impact budget predictability for the DoD. Competition mechanism aims for cost-effectiveness for taxpayers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may obscure true cost.
- Limited data on specific unit pricing and market comparison.
- Contract duration of 1551 days is substantial.
Positive Signals
- Awarded under full and open competition.
- Contract awarded to a single entity, potentially simplifying logistics.
- Standard fuel type (JA1) for aviation.
Sector Analysis
The Department of Defense's procurement of aviation turbine fuel falls within the broader Petroleum and Petroleum Products Merchant Wholesalers sector. Spending benchmarks for this specific fuel type are highly dependent on market conditions, geopolitical factors, and military operational tempo.
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 under full and open competition, suggesting a standard procurement process. Oversight would focus on the administration of the economic price adjustment clause and ensuring compliance with contract terms.
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 adjustments.
- Lack of detailed unit cost data for precise benchmarking.
- Long contract duration may not reflect current market conditions.
- Sole contractor for the period limits competitive pressure on pricing.
Tags
petroleum-and-petroleum-products-merchan, department-of-defense, ok, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.2 million to MERCURY AIR CENTERS. TURBINE FUEL, AVIATION (JA1)
Who is the contractor on this award?
The obligated recipient is MERCURY AIR CENTERS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $19.2 million.
What is the period of performance?
Start: 2005-04-01. End: 2009-06-30.
What was the average per-gallon price paid under this contract, considering the economic price adjustments?
Determining the exact average per-gallon price requires access to the specific economic price adjustment indices and calculations applied throughout the contract's 1551-day duration. Without this detailed data, only the base price can be referenced, which is not representative of the final cost paid by the government.
How did the final cost compare to market benchmarks for JA1 fuel during the contract period?
A comprehensive comparison to market benchmarks would necessitate analyzing historical fuel price data for JA1 during the 2005-2009 period and applying the contract's specific economic price adjustment formula. This would reveal if the adjustments led to costs significantly above or below prevailing market rates.
What was the impact of the Fixed Price with Economic Price Adjustment (FPEPA) clause on the overall cost-effectiveness of this procurement?
The FPEPA clause aimed to protect both the contractor from price volatility and the government from excessive fixed prices. However, it introduces uncertainty in final costs. If fuel prices rose substantially, the government might have paid more than with a firm fixed price contract, but it also avoided potentially higher initial bids.
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: SP060004R0042
Offers Received: 22
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Macquarie Infrastructure Corporation (UEI: 177487654)
Address: 7500 E APACHE ST HNGR 18, TULSA, OK, 01
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $19,167,842
Exercised Options: $19,167,842
Current Obligation: $19,167,842
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060005D4545
IDV Type: IDC
Timeline
Start Date: 2005-04-01
Current End Date: 2009-06-30
Potential End Date: 2009-06-30 00:00:00
Last Modified: 2009-10-30
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