DLA awards $226.8M for Turbine Fuel (JP8) to Equilon Enterprises LLC under full and open competition

Contract Overview

Contract Amount: $226,781,008 ($226.8M)

Contractor: Equilon Enterprises LLC

Awarding Agency: Department of Defense

Start Date: 2007-03-21

End Date: 2008-04-30

Contract Duration: 406 days

Daily Burn Rate: $558.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 21

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: TURBINE FUEL, AVIATION (JP8)

Place of Performance

Location: SARALAND, MOBILE County, ALABAMA, 36571

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $226.8 million to EQUILON ENTERPRISES LLC for work described as: TURBINE FUEL, AVIATION (JP8) Key points: 1. Significant contract value of over $226 million for aviation fuel. 2. Equilon Enterprises LLC is the sole awardee, indicating a single primary supplier. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces price volatility risk. 4. The contract falls under the Petroleum Refineries sector, crucial for defense logistics.

Value Assessment

Rating: good

The contract value of $226.8M is substantial. Benchmarking against similar aviation fuel contracts would be necessary to fully assess pricing, but the FPEPA clause suggests potential for price fluctuations beyond initial estimates.

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 single awardee implies that only one entity met the requirements or offered the best value at the time of award.

Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers, aiming to secure the best possible price. However, the economic price adjustment clause could lead to higher costs than initially projected.

Public Impact

Ensures a critical fuel supply for military aviation operations. Potential for price increases due to economic adjustments impacts budget predictability. Supports the defense logistics infrastructure through fuel provision.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause may lead to cost overruns.
Single awardee raises questions about the breadth of competition achieved.
Contract duration and potential for follow-on awards.

Positive Signals

Awarded under full and open competition.
Addresses a critical defense need for aviation fuel.
Established contract with a known supplier.

Sector Analysis

This contract for Turbine Fuel (JP8) falls within the Petroleum Refineries sector. Spending in this sector is vital for national security and defense operations, particularly for aviation fuel. Benchmarks for similar fuel contracts would typically consider volume, type of fuel, and delivery terms.

Small Business Impact

The data indicates that small businesses were not directly awarded this contract, as it went to Equilon Enterprises LLC. Further analysis would be needed to determine if small businesses were involved as subcontractors.

Oversight & Accountability

The contract was awarded by the Defense Logistics Agency, a key component of the Department of Defense responsible for logistics. Oversight would focus on ensuring timely delivery, adherence to specifications, and proper application of the economic price adjustment clause.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Economic Price Adjustment (EPA) clause.
Single awardee for a large value contract.
Contract duration of 406 days.
Potential for price volatility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $226.8 million to EQUILON ENTERPRISES LLC. TURBINE FUEL, AVIATION (JP8)

Who is the contractor on this award?

The obligated recipient is EQUILON ENTERPRISES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $226.8 million.

What is the period of performance?

Start: 2007-03-21. End: 2008-04-30.

What was the actual price escalation experienced under the economic price adjustment clause during the contract period?

To determine the actual price escalation, one would need to access contract performance data and compare the initial fixed price components with the adjusted prices over the contract's duration. This would reveal the extent to which market fluctuations impacted the final cost to the government and assess the effectiveness of the FPEPA clause in balancing supplier risk with taxpayer cost.

Were there any identified risks or performance issues associated with Equilon Enterprises LLC during the contract execution?

Assessing risks and performance would involve reviewing contract performance reports, any issued cure notices or show-cause letters, and contractor past performance evaluations. Without access to these specific documents, it's difficult to ascertain if any issues arose. However, the FPEPA clause itself introduces a risk of price volatility that requires careful monitoring.

How did the final cost compare to the initial bid price, considering the economic price adjustments?

Comparing the final cost to the initial bid requires detailed financial data from the contract's lifecycle. The FPEPA clause is designed to allow for price changes based on specific economic indicators. Analyzing the difference between the initial fixed price elements and the final invoiced amounts would reveal the total impact of these adjustments and whether the contract ultimately represented good value.

Industry Classification

NAICS: Manufacturing › Petroleum and Coal Products Manufacturing › Petroleum Refineries

Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060007R0061

Offers Received: 21

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Shell Deutschland Gmbh (UEI: 423792808)

Address: 1100 LOUISIANA ST, HOUSTON, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $226,820,608

Exercised Options: $226,781,008

Current Obligation: $226,781,008

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060007D0482

IDV Type: IDC

Timeline