DoD's $286.5M JP8 Turbine Fuel Contract Awarded to Equilon Enterprises LLC
Contract Overview
Contract Amount: $286,532,940 ($286.5M)
Contractor: Equilon Enterprises LLC
Awarding Agency: Department of Defense
Start Date: 2008-09-17
End Date: 2009-09-30
Contract Duration: 378 days
Daily Burn Rate: $758.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 16
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: TURBINE FUEL, AVIATION, JP8
Place of Performance
Location: MARTINEZ, CONTRA COSTA County, CALIFORNIA, 94553
Plain-Language Summary
Department of Defense obligated $286.5 million to EQUILON ENTERPRISES LLC for work described as: TURBINE FUEL, AVIATION, JP8 Key points: 1. Significant expenditure on aviation fuel highlights defense operational needs. 2. Equilon Enterprises LLC secured the contract, indicating a competitive market for fuel supply. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces price volatility risk. 4. The Defense Logistics Agency manages this critical fuel procurement for military readiness.
Value Assessment
Rating: good
The contract value of $286.5 million for aviation fuel is substantial. Benchmarking against similar fuel procurements would be necessary to fully assess value, but the FPEPA clause suggests potential for cost fluctuations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust bidding process. This method generally promotes competitive pricing, though the economic price adjustment clause can impact the final cost.
Taxpayer Impact: Taxpayer funds are utilized for essential military fuel. Competitive bidding aims to secure the best possible price, but economic adjustments mean actual costs could exceed initial estimates.
Public Impact
Ensures availability of critical fuel for military aircraft operations. Supports national defense readiness by maintaining fuel supply chains. Impacts the aviation fuel market through a large government procurement. Potential for price fluctuations affects budget predictability for taxpayers.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Economic price adjustment clause may lead to higher than anticipated costs.
- Dependence on a single supplier for a critical resource.
Positive Signals
- Awarded through full and open competition.
- Procurement supports essential defense operations.
Sector Analysis
This contract falls within the energy sector, specifically petroleum refining and distribution. Government fuel procurements are substantial and influence market dynamics, with pricing often subject to global commodity fluctuations and economic adjustments.
Small Business Impact
The data does not indicate specific involvement of small businesses in this contract. Large-scale fuel procurements often involve major energy corporations, potentially limiting direct small business participation unless they are subcontractors.
Oversight & Accountability
The Defense Logistics Agency is responsible for managing this contract, ensuring compliance with procurement regulations and overseeing delivery. Oversight is crucial to monitor fuel quality and adherence to contract terms.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) clause introduces cost uncertainty.
- Potential for supply chain disruptions affecting military readiness.
- Dependence on a single awardee for a critical commodity.
- Lack of specific small business participation noted.
Tags
petroleum-refineries, department-of-defense, ca, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $286.5 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 $286.5 million.
What is the period of performance?
Start: 2008-09-17. End: 2009-09-30.
What is the historical price trend for JP8 fuel under similar FPEPA contracts?
Analyzing historical price data for JP8 under similar Fixed Price with Economic Price Adjustment (FPEPA) contracts would reveal the volatility experienced and the actual impact of the adjustment clauses. This analysis helps in understanding the risk associated with price fluctuations and provides a basis for future contract negotiations or alternative pricing structures.
What is the potential risk of supply disruption given the contract structure?
While awarded under full and open competition, the contract's duration and reliance on Equilon Enterprises LLC present a potential risk of supply disruption if the supplier faces unforeseen operational issues. The FPEPA clause, while allowing for market price changes, doesn't inherently mitigate supply chain risks. Contingency planning and monitoring supplier stability are key.
How does the unit cost compare to commercial aviation fuel prices?
Comparing the unit cost of JP8 under this contract to prevailing commercial aviation fuel prices requires access to specific market data at the time of award and during the contract period. Factors like bulk purchasing, delivery logistics, and specific fuel additives for military use can cause deviations. A detailed cost-benefit analysis would be needed.
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: SP060008R0161
Offers Received: 16
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Shell Deutschland Gmbh (UEI: 423792808)
Address: 910 LOUISIANA ST, HOUSTON, TX, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $286,532,940
Exercised Options: $286,532,940
Current Obligation: $286,532,940
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060008D0506
IDV Type: IDC
Timeline
Start Date: 2008-09-17
Current End Date: 2009-09-30
Potential End Date: 2009-10-30 00:00:00
Last Modified: 2011-07-20
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