DoD spent $14.5M on jet fuel, with Freeman Holdings LLC securing the contract

Contract Overview

Contract Amount: $14,476,090 ($14.5M)

Contractor: Freeman Holdings LLC

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2012-09-30

Contract Duration: 1,460 days

Daily Burn Rate: $9.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 112

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: JET A WITH FSII

Place of Performance

Location: TOPEKA, SHAWNEE County, KANSAS, 66619

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $14.5 million to FREEMAN HOLDINGS LLC for work described as: JET A WITH FSII Key points: 1. Contract awarded to Freeman Holdings LLC for jet fuel supply. 2. The contract duration was 4 years, from October 2008 to September 2012. 3. Awarded under full and open competition, indicating a competitive bidding process. 4. The contract type was Fixed Price with Economic Price Adjustment. 5. The Defense Logistics Agency managed this procurement. 6. The contractor is based in Kansas. 7. The North American Industry Classification System (NAICS) code is 424720.

Value Assessment

Rating: fair

The total value of $14.5 million for four years of jet fuel supply suggests a moderate annual spend. Without specific unit pricing or comparison to contemporary market rates for JET A WITH FSII, a precise value-for-money assessment is challenging. However, the fixed-price with economic price adjustment structure implies some risk mitigation for both parties regarding fuel price volatility. Further analysis would require benchmarking against similar fuel contracts awarded by the DoD or other agencies during the same period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 112 bids indicates a highly competitive environment. This level of competition is generally favorable for price discovery and can lead to more favorable pricing for the government, as contractors vie to win the award.

Taxpayer Impact: The extensive competition for this jet fuel contract likely resulted in taxpayer savings by driving down the price compared to a less competitive or sole-source procurement.

Public Impact

The Department of Defense (DoD) benefits from a reliable supply of jet fuel for its operations. This contract ensures the availability of JET A WITH FSII, a critical aviation fuel. The geographic impact is primarily related to the Defense Logistics Agency's operational footprint and the contractor's delivery capabilities. Workforce implications are tied to the operations of Freeman Holdings LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations due to the economic price adjustment clause.
Reliance on a single contractor for a critical fuel supply.
Limited transparency on specific performance metrics and quality control measures.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
The contract was awarded to a single entity, potentially simplifying logistics and management.
The duration of the contract provided stability for both the government and the contractor.

Sector Analysis

The procurement falls within the Petroleum and Petroleum Products Merchant Wholesalers sector, specifically focusing on aviation fuel. The market for aviation fuel is influenced by global oil prices, geopolitical factors, and demand from commercial and military aviation. The DoD is a significant consumer of aviation fuel, and contracts like this are essential for maintaining operational readiness. Comparable spending benchmarks would involve analyzing other large-scale aviation fuel contracts awarded by military branches or government entities.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses within the provided data. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem through this specific contract is likely minimal unless Freeman Holdings LLC itself is a small business, which is not specified. Further investigation into subcontracting plans would be needed for a complete analysis.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Mechanisms would include contract performance reviews, audits, and compliance checks. Transparency is generally facilitated through contract award databases, though detailed operational performance data may be less accessible to the public.

Related Government Programs

Defense Logistics Agency Fuel Contracts
Department of Defense Aviation Support
Jet Fuel Procurement
Petroleum Product Supply Contracts

Risk Flags

Potential price volatility due to EPA clause
Dependence on a single supplier for critical fuel

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.5 million to FREEMAN HOLDINGS LLC. JET A WITH FSII

Who is the contractor on this award?

The obligated recipient is FREEMAN HOLDINGS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.5 million.

What is the period of performance?

Start: 2008-10-01. End: 2012-09-30.

What was the specific unit price of JET A WITH FSII under this contract, and how did it compare to market rates at the time?

The provided data does not include the specific unit price of JET A WITH FSII. The total award amount of $14,476,090.39 over 1460 days (4 years) suggests an average annual spend of approximately $3.6 million. To determine the unit price, the total quantity of fuel purchased would be required. Benchmarking against market rates would necessitate accessing historical fuel price indices for JET A WITH FSII during the 2008-2012 period and comparing them to the effective prices paid under this contract, considering the economic price adjustment clause. Without this granular data, a precise comparison is not feasible.

What was the track record of Freeman Holdings LLC in fulfilling government contracts prior to and during this award?

Information regarding Freeman Holdings LLC's specific track record with government contracts prior to or during the 2008-2012 period is not detailed in the provided data. A comprehensive assessment would require searching federal procurement databases (like FPDS or SAM.gov) for past performance evaluations, contract awards, and any reported issues or disputes associated with Freeman Holdings LLC. Understanding their history with similar fuel supply contracts, their on-time delivery rates, and any quality control incidents would be crucial for evaluating their reliability as a contractor for this significant DoD requirement.

How did the economic price adjustment (EPA) clause impact the final cost to the government compared to a firm fixed price?

The Economic Price Adjustment (EPA) clause in this Fixed Price with EPA contract allowed for adjustments to the contract price based on fluctuations in specified economic factors, likely related to the cost of crude oil or refined jet fuel. This contrasts with a Firm Fixed Price (FFP) contract, where the price remains constant regardless of market changes. The EPA clause likely protected the contractor from significant losses due to rising fuel costs, potentially leading to a higher initial bid price compared to an FFP. Conversely, if fuel prices had decreased substantially, the government might have paid more than under an FFP. The net impact on the government's cost depends entirely on the actual market price movements of JET A WITH FSII during the contract period and the specific formula used in the EPA.

What was the total quantity of JET A WITH FSII procured under this contract?

The total quantity of JET A WITH FSII procured under this contract is not explicitly stated in the provided data. The contract value is listed as $14,476,090.39. To ascertain the quantity, one would need to know the average price per unit (e.g., per gallon or liter) that Freeman Holdings LLC was paid throughout the contract's duration. This unit price would be influenced by the base fixed price and the economic price adjustments applied over the four-year period. Without the quantity or a consistent unit price, it's impossible to calculate the total volume of fuel supplied.

Were there any performance issues or contract disputes reported for Freeman Holdings LLC during the contract period?

The provided summary data does not contain information regarding performance issues or contract disputes related to Freeman Holdings LLC for this specific contract (DO award number not specified). A thorough review of contract performance reports, payment histories, and any official correspondence or legal actions filed by or against the contractor during the 2008-2012 period would be necessary to identify any such issues. Agencies typically maintain records of contractor performance, which can include ratings and documented problems, but this level of detail is not present here.

How does the $14.5 million spending on jet fuel compare to other similar DoD fuel procurements during the same timeframe?

The $14.5 million spent over four years on JET A WITH FSII by the Defense Logistics Agency represents an average annual expenditure of approximately $3.6 million for this specific contract. To compare this to other similar DoD fuel procurements, one would need to identify other contracts for aviation fuel awarded by the DoD (or its components like the DLA) during the 2008-2012 period. Analyzing the total value, duration, and quantity of fuel in those contracts would allow for benchmarking. For instance, if other contracts for similar fuel types and volumes were significantly higher or lower, it could indicate differences in pricing, competition, or scope. Without access to a broader dataset of comparable contracts, this specific $14.5 million figure is difficult to contextualize in relative terms.

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: SP060008R0200

Offers Received: 112

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Freeman Holdings L.L.C. (UEI: 020206749)

Address: 740 FORBES FLD BLDG 610, TOPEKA, KS, 02

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $14,476,090

Exercised Options: $14,476,090

Current Obligation: $14,476,090

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060008D0057

IDV Type: IDC

Timeline