DoD's $21M Petroleum Contract with Aloha Petroleum: Fixed Price with Economic Adjustment
Contract Overview
Contract Amount: $21,057,229 ($21.1M)
Contractor: Aloha Petroleum, Ltd.
Awarding Agency: Department of Defense
Start Date: 2006-07-14
End Date: 2009-12-31
Contract Duration: 1,266 days
Daily Burn Rate: $16.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Place of Performance
Location: HONOLULU, HONOLULU County, HAWAII, 96813
State: Hawaii Government Spending
Plain-Language Summary
Department of Defense obligated $21.1 million to ALOHA PETROLEUM, LTD. for work described as: Key points: 1. Contract awarded to Aloha Petroleum, Ltd. for petroleum products. 2. Full and open competition was utilized for this award. 3. The contract duration was 1266 days. 4. The contract type is Fixed Price with Economic Price Adjustment. 5. This contract falls under the Petroleum and Petroleum Products Merchant Wholesalers sector.
Value Assessment
Rating: fair
The contract uses a Fixed Price with Economic Price Adjustment structure, which can lead to cost fluctuations. Benchmarking against similar petroleum contracts is difficult without specific unit pricing details.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was conducted, suggesting a competitive bidding process. However, the economic price adjustment clause introduces potential for price increases beyond initial bids.
Taxpayer Impact: Taxpayer funds are subject to market volatility in fuel prices due to the economic price adjustment clause.
Public Impact
Ensures supply of essential petroleum products to the Department of Defense. Supports a private sector vendor, Aloha Petroleum, Ltd., in Hawaii. Potential for increased costs to taxpayers if fuel prices rise significantly.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may lead to cost overruns.
- Lack of specific unit cost data makes direct comparison challenging.
Positive Signals
- Awarded through full and open competition.
- Ensures critical fuel supply for military operations.
Sector Analysis
This contract is within the Petroleum and Petroleum Products Merchant Wholesalers sector. Spending in this sector is heavily influenced by global commodity prices and geopolitical factors.
Small Business Impact
The award was made to Aloha Petroleum, Ltd., a private company. There is no explicit indication of small business participation or subcontracting in the provided data.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a component of the Department of Defense, indicating established oversight mechanisms for procurement.
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 escalation due to economic price adjustment.
- Lack of detailed unit cost data hinders precise value assessment.
- Dependence on fluctuating global petroleum prices.
- Contract duration is substantial, increasing exposure to market volatility.
Tags
petroleum-and-petroleum-products-merchan, department-of-defense, hi, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.1 million to ALOHA PETROLEUM, LTD.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is ALOHA PETROLEUM, LTD..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $21.1 million.
What is the period of performance?
Start: 2006-07-14. End: 2009-12-31.
What was the average per-unit cost of petroleum products under this contract, and how does it compare to market benchmarks at the time of award and during the contract period?
The provided data does not include specific per-unit cost information, making direct comparison to market benchmarks impossible. The contract's economic price adjustment clause suggests that the final per-unit cost would have varied based on market fluctuations, potentially impacting the overall value proposition for taxpayers.
What specific petroleum products were procured, and were there any quality or delivery issues reported during the contract's performance period?
The data specifies 'Petroleum and Petroleum Products Merchant Wholesalers' but lacks granular detail on the exact products. Without performance reports or issue logs, it's impossible to assess quality or delivery effectiveness. The contract type (Fixed Price with EPA) implies a focus on price stability with adjustments for market conditions.
How did the economic price adjustment mechanism function, and what was the total variance in price compared to the initial fixed price component over the contract's duration?
The exact mechanism and total price variance are not detailed in the provided summary. Economic price adjustment clauses typically tie price changes to an index (e.g., fuel price indices). Understanding this variance is crucial for assessing the true cost to the government and the effectiveness of the pricing strategy.
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: 10
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 1132 BISHOP ST STE 1700, HONOLULU, HI, 01
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $21,057,229
Exercised Options: $21,057,229
Current Obligation: $21,057,229
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060006D1262
IDV Type: IDC
Timeline
Start Date: 2006-07-14
Current End Date: 2009-12-31
Potential End Date: 2009-12-31 00:00:00
Last Modified: 2009-09-17
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