Department of Defense awarded Universal Fuel Inc. a $16.8M contract for fuel storage buildings, spanning over 8 years

Contract Overview

Contract Amount: $16,791,785 ($16.8M)

Contractor: Universal Fuel Inc

Awarding Agency: Department of Defense

Start Date: 2005-05-05

End Date: 2013-12-31

Contract Duration: 3,162 days

Daily Burn Rate: $5.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200611!006160!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060005D5512 !A!N! !Y!B001 !04 !20060301!20131130!061143129!061143129!061143129!N!UNIVERSAL FUEL, INC !929 S DALEVILLE AVE !DALEVILLE !AL!36322!60585!017!24!PATUXENT !CHARLES !MARYLAND !+000001306169!N!N!000000000000!X173!LEASE/FUEL STORAGE BUILDINGS !S1 !SERVICES !000 !NOT DISCERNABLE !484220!E! !3!A!S!C! !C!20131130!B! ! !B! !A!N!J!2!005!K! !C!N!Z! ! !N!B!N!N! ! !A! !B!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: DALEVILLE, DALE County, ALABAMA, 36322

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to UNIVERSAL FUEL INC for work described as: 200611!006160!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060005D5512 !A!N! !Y!B001 !04 !20060301!20131130!061143129!061143129!061143129!N!UNIVERSAL FUEL, INC !929 S DALEVILLE AVE !DALEVILLE !AL!36322!60585!017!24!PATUXENT !CHAR… Key points: 1. The contract's value of $16.8 million over 8 years suggests a significant investment in fuel storage infrastructure. 2. Competition dynamics indicate a 'full and open competition after exclusion of sources,' which may warrant further investigation into the exclusion criteria. 3. The contract duration of over 8 years presents potential risks related to long-term price stability and evolving technological needs. 4. Performance context is limited, but the contract was awarded by the Defense Logistics Agency, a key logistics provider for the DoD. 5. Sector positioning is within the Defense sector, specifically related to energy infrastructure and logistics support. 6. The contract was awarded as a Firm Fixed Price type, which shifts cost risk to the contractor.

Value Assessment

Rating: fair

The contract value of $16.8 million over more than 8 years averages to approximately $2.1 million per year. Benchmarking this against similar contracts for specialized fuel storage facilities is challenging without more specific details on the scope of work, location, and type of storage. However, the duration suggests a need for long-term infrastructure, and the firm fixed price award indicates a defined cost expectation. The absence of detailed performance metrics makes a definitive value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This specific designation suggests that while the competition was broadly open, certain sources were excluded for reasons that would need further clarification. The number of bidders is not explicitly stated in the provided data, but the 'full and open' nature implies multiple potential bidders were considered.

Taxpayer Impact: The 'full and open' competition, even with exclusions, generally aims to foster price discovery and ensure competitive pricing for taxpayers. However, understanding the rationale behind any source exclusions is crucial to confirm that taxpayers received the best possible value.

Public Impact

The primary beneficiaries are likely military installations requiring secure and compliant fuel storage solutions. The services delivered include the provision and maintenance of fuel storage buildings, crucial for operational readiness. The geographic impact is concentrated in Alabama (AL), where the contractor is located, and potentially at various DoD sites requiring these facilities. Workforce implications may include employment opportunities for construction, maintenance, and logistics personnel associated with Universal Fuel, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in a full and open competition warrants scrutiny to ensure no viable competitors were unfairly barred.
The long contract duration (over 8 years) increases the risk of cost overruns if market conditions or requirements change significantly.
Lack of detailed performance metrics makes it difficult to assess the contractor's effectiveness and value delivery over time.

Positive Signals

The firm fixed price contract structure transfers cost risk to the contractor, providing budget certainty for the government.
The Defense Logistics Agency's involvement suggests a strategic need for reliable fuel storage infrastructure.
The contract was awarded to Universal Fuel, Inc., indicating a potentially established provider in this niche market.

Sector Analysis

This contract falls within the Defense sector, specifically addressing critical infrastructure needs for fuel storage. The market for specialized construction and maintenance of such facilities is often characterized by a limited number of highly qualified contractors due to stringent safety and regulatory requirements. Comparable spending benchmarks would depend on the specific type and capacity of the fuel storage buildings, but large-scale infrastructure projects for the DoD can range from millions to tens of millions of dollars.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary impact on the small business ecosystem would be indirect, through potential opportunities if Universal Fuel, Inc. chooses to subcontract, or through competition with larger firms for related services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Mechanisms likely include contract performance reviews, site inspections, and financial audits. Transparency is facilitated through contract award databases like FPDS, but detailed operational oversight information is typically internal to the agency.

Related Government Programs

Defense Logistics Agency Fuel Contracts
DoD Infrastructure and Facilities Management
Energy Security Contracts
Specialized Construction Services
Government Fuel Storage Solutions

Risk Flags

Potential lack of robust competition due to source exclusion.
Long contract duration increases risk of cost escalation or obsolescence.
Limited transparency on specific performance metrics and building details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to UNIVERSAL FUEL INC. 200611!006160!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060005D5512 !A!N! !Y!B001 !04 !20060301!20131130!061143129!061143129!061143129!N!UNIVERSAL FUEL, INC !929 S DALEVILLE AVE !DALEVILLE !AL!36322!60585!017!24!PATUXENT !CHARLES !MARYLAND !+000001306169!N!N!000000000000!X173!LEASE/FUEL STORAGE BUILDINGS !S1 !SERVICES !000 !NOT DISCERNABLE !484220!E! !3!A!S!C! !C!201

Who is the contractor on this award?

The obligated recipient is UNIVERSAL FUEL INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2005-05-05. End: 2013-12-31.

What specific types of fuel storage buildings were procured under this contract, and what are their capacities?

The contract description mentions 'LEASE/FUEL STORAGE BUILDINGS' (PSC: 484220). However, the specific types (e.g., above-ground, underground, type of fuel stored) and their capacities are not detailed in the provided data. This information is crucial for understanding the scope of the requirement and for accurate benchmarking. Without these specifics, it's difficult to assess if the $16.8 million award represents a fair price for the quantity and quality of storage provided.

What were the specific reasons for excluding certain sources in this 'full and open competition after exclusion of sources' award?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that while the solicitation was broadly advertised, specific potential bidders were intentionally excluded. The reasons for exclusion are not provided in the data but typically relate to factors such as failure to meet minimum qualifications, past performance issues, or specific security requirements. Understanding these exclusions is vital to ensure that the competition was fair and that the government did not forgo potentially better offers due to arbitrary or unjustified exclusions.

How does the average annual cost of approximately $2.1 million compare to market rates for similar fuel storage building leases or construction?

Benchmarking the average annual cost of approximately $2.1 million requires detailed information on the specific type, size, capacity, and location of the fuel storage buildings. Market rates can vary significantly based on these factors, as well as regulatory compliance requirements (e.g., EPA, OSHA). Without comparative data on similar DoD or commercial contracts for specialized fuel storage infrastructure, it is difficult to definitively state whether this represents a competitive market rate. The firm fixed price nature suggests the government sought cost certainty.

What performance metrics were established for Universal Fuel, Inc. under this contract, and how was their performance tracked?

The provided data does not include specific performance metrics or details on how Universal Fuel, Inc.'s performance was tracked. For a contract of this duration and value, performance would typically be monitored through regular progress reports, site inspections, adherence to delivery schedules, and compliance with safety and environmental regulations. The Defense Logistics Agency would be responsible for this oversight, but the absence of this information in the summary data limits our ability to assess the contractor's track record on this specific award.

What is the historical spending pattern for fuel storage buildings by the Department of Defense, and how does this contract fit within that pattern?

Historical spending data for fuel storage buildings by the DoD is not provided. However, the award to Universal Fuel, Inc. for over $16 million suggests a significant, long-term investment in critical infrastructure. Such contracts are often driven by the need to maintain or upgrade aging facilities, meet new regulatory standards, or support evolving operational requirements. This contract likely represents a substantial portion of spending in this specific niche over its performance period.

What are the potential risks associated with a firm fixed price contract for a lease/building project spanning over 8 years?

A firm fixed price (FFP) contract for a long-term project like this carries several risks. While it provides cost certainty for the government, it places the burden of cost overruns on the contractor. If material costs, labor rates, or unforeseen site conditions escalate significantly over the 8+ year period, Universal Fuel, Inc. might face financial strain, potentially impacting performance or leading to claims. Conversely, if costs decrease, the contractor benefits. The long duration also increases the risk of the facility becoming technologically obsolete or no longer meeting evolving DoD requirements, potentially necessitating costly modifications or early termination.

Industry Classification

NAICS: Transportation and Warehousing › Specialized Freight Trucking › Specialized Freight (except Used Goods) Trucking, Local

Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060004R0103

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 S DALEVILLE AVE, DALEVILLE, AL, 01

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $16,791,785

Exercised Options: $16,791,785

Current Obligation: $16,791,785

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060005D5512

IDV Type: IDC

Timeline