Dod's $26.5M Petroleum Refineries Contract Awarded to ERG Raffinerie Mediterranee SPA
Contract Overview
Contract Amount: $26,458,134 ($26.5M)
Contractor: ERG Raffinerie Mediterranee SPA
Awarding Agency: Department of Defense
Start Date: 2008-06-04
End Date: 2009-07-30
Contract Duration: 421 days
Daily Burn Rate: $62.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 15
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: F76
Plain-Language Summary
Department of Defense obligated $26.5 million to ERG RAFFINERIE MEDITERRANEE SPA for work described as: F76 Key points: 1. Contract value of $26.5 million for petroleum refineries. 2. Awarded under full and open competition. 3. Fixed price with economic price adjustment contract type. 4. Duration of 421 days.
Value Assessment
Rating: fair
The contract value of $26.5 million for petroleum refineries appears reasonable given the duration and fixed price with economic price adjustment. Benchmarking against similar contracts for refinery services would provide a more definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to competitive pricing as multiple vendors have the opportunity to bid.
Taxpayer Impact: The use of full and open competition is generally beneficial for taxpayers, as it promotes market competition and can lead to lower prices and better value.
Public Impact
Ensures supply of refined petroleum products for defense operations. Supports the energy sector and related industries. Potential impact on fuel prices due to economic price adjustment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may lead to cost overruns if fuel prices increase significantly.
- Contract duration of 421 days is relatively short for refinery services, potentially leading to frequent re-competition.
- Lack of small business participation noted.
Positive Signals
- Awarded through full and open competition, indicating a competitive bidding process.
- Fixed price contract structure provides some cost certainty.
Sector Analysis
The petroleum refining sector is critical for energy security and national defense. Spending in this sector can fluctuate based on geopolitical events and global commodity prices. This contract falls within the typical range for specialized refinery services.
Small Business Impact
The data indicates no specific allocation or participation for small businesses in this contract. Further analysis would be needed to determine if opportunities were missed or if the nature of the requirement precluded small business involvement.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a component of the Department of Defense, suggesting established oversight mechanisms. However, the effectiveness of oversight for economic price adjustments and delivery orders warrants review.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost increases due to economic price adjustment.
- Limited contract duration may lead to instability.
- No indication of small business participation.
- Lack of detailed pricing comparison data.
Tags
petroleum-refineries, department-of-defense, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.5 million to ERG RAFFINERIE MEDITERRANEE SPA. F76
Who is the contractor on this award?
The obligated recipient is ERG RAFFINERIE MEDITERRANEE SPA.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $26.5 million.
What is the period of performance?
Start: 2008-06-04. End: 2009-07-30.
What was the total cost impact of the economic price adjustment clause over the life of the contract?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic factors, such as the cost of raw materials or labor. Without detailed records of the price changes applied during the contract's 421-day duration, it is impossible to quantify the exact cost impact of the EPA. A review of contract modification logs would be necessary to determine the total increase or decrease in cost attributable to the EPA.
How did the pricing compare to other bids received under the full and open competition?
While the contract was awarded under full and open competition, the provided data does not include details on other bids received. To assess the competitiveness of the final price, a comparison with the bid prices of other offerors would be essential. This would reveal whether the awarded price was indeed the most advantageous to the government, considering both price and other evaluation factors.
What specific petroleum products were procured under this contract and what was their intended use?
The contract specifies 'Petroleum Refineries' (NAICS 324110) and was awarded by the Defense Logistics Agency (DLA). This suggests the procurement likely involved refined petroleum products such as jet fuel, diesel, or gasoline, essential for fueling military aircraft, vehicles, and equipment. The exact products and their specific end-uses would be detailed in the contract's statement of work and delivery orders.
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: SP060008R0033
Offers Received: 15
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: STRADA STATALE EX S S 114 KM 146, PRIOLO GARGALLO
Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $26,458,134
Exercised Options: $26,458,134
Current Obligation: $26,458,134
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060008D0492
IDV Type: IDC
Timeline
Start Date: 2008-06-04
Current End Date: 2009-07-30
Potential End Date: 2009-07-30 00:00:00
Last Modified: 2021-10-31
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