DoD's $32.5M JP8 Fuel Contract Awarded to HD Hyundai Oilbank Amidst Fixed Price with EPA

Contract Overview

Contract Amount: $32,559,232 ($32.6M)

Contractor: HD Hyundai Oilbank CO., Ltd

Awarding Agency: Department of Defense

Start Date: 2007-12-13

End Date: 2009-01-30

Contract Duration: 414 days

Daily Burn Rate: $78.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: JP8

Plain-Language Summary

Department of Defense obligated $32.6 million to HD HYUNDAI OILBANK CO., LTD for work described as: JP8 Key points: 1. The contract value stands at $32,559,232. 2. Full and open competition was utilized. 3. The contract type is Fixed Price with Economic Price Adjustment. 4. The award was made by the Defense Logistics Agency for Petroleum Refineries.

Value Assessment

Rating: fair

The fixed price with economic price adjustment (EPA) contract type allows for price fluctuations based on market conditions, potentially impacting the final cost. Benchmarking against similar fuel 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 employed, suggesting a robust price discovery process. However, the EPA clause introduces variability, making it challenging to definitively assess if the lowest possible price was achieved at the outset.

Taxpayer Impact: The use of EPA introduces potential for increased costs to taxpayers if fuel prices rise significantly beyond initial projections.

Public Impact

Ensures supply of essential JP8 fuel for military operations. Price volatility is a key concern due to the EPA clause. Competition aims for cost-effectiveness, but EPA can offset savings. Contract duration of 414 days indicates a medium-term supply need.

Waste & Efficiency Indicators

Waste Risk Score: 78 / 10

Warning Flags

Economic Price Adjustment (EPA) introduces cost uncertainty.
Lack of specific unit cost data hinders detailed analysis.
Contract duration is relatively short, requiring future procurements.

Positive Signals

Full and open competition utilized.
Awarded by a major defense agency.
Addresses critical fuel supply needs.

Sector Analysis

This contract falls within the energy sector, specifically the procurement of refined petroleum products. Spending benchmarks for fuel contracts can vary widely based on volume, type of fuel, and geopolitical factors affecting global oil prices.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. The prime contractor, HD Hyundai Oilbank Co., Ltd., is a large entity, suggesting limited direct opportunities for small businesses in this prime award.

Oversight & Accountability

The Defense Logistics Agency is responsible for overseeing this contract. Standard oversight mechanisms for fuel procurement and delivery would apply, focusing on quality, quantity, and timely delivery.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Economic Price Adjustment (EPA) clause.
Potential for cost overruns due to market volatility.
Lack of detailed unit pricing for benchmarking.
Dependence on global oil market fluctuations.
Contract awarded to a large foreign entity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.6 million to HD HYUNDAI OILBANK CO., LTD. JP8

Who is the contractor on this award?

The obligated recipient is HD HYUNDAI OILBANK CO., LTD.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $32.6 million.

What is the period of performance?

Start: 2007-12-13. End: 2009-01-30.

What is the projected maximum cost of this contract considering potential economic price adjustments?

Without specific indices and adjustment formulas outlined in the contract, it's impossible to project the maximum cost. The Economic Price Adjustment (EPA) clause allows for increases based on market fluctuations in crude oil and refined product prices. The initial award value is $32.56 million, but the final expenditure could be higher depending on market dynamics over the 414-day contract period.

How does the EPA clause mitigate or exacerbate risks associated with fluctuating fuel prices?

The EPA clause is designed to protect both the government and the contractor from extreme price volatility. It allows the contract price to adjust upwards or downwards with market prices, preventing the government from overpaying if prices drop significantly and ensuring the contractor remains whole if prices surge. However, it shifts the risk of price increases to the government.

What is the historical performance of HD Hyundai Oilbank Co., Ltd. in fulfilling similar defense contracts?

This specific data set does not provide historical performance information for HD Hyundai Oilbank Co., Ltd. A comprehensive assessment would require reviewing past contract awards, performance reviews, and any reported issues or successes with previous government procurements by this contractor.

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: SP060007R0077

Offers Received: 10

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

Evaluated Preference: NONE

Contractor Details

Address: 640 - 6 DAEJOOK-RI, DAESAN-EUP, SOSAN

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $32,559,232

Exercised Options: $32,559,232

Current Obligation: $32,559,232

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060008D0458

IDV Type: IDC

Timeline