DoD's $70M Alaska Fuel Contract Awarded to Petro Star Inc. Amidst Full and Open Competition

Contract Overview

Contract Amount: $70,055,361 ($70.1M)

Contractor: Petro Star Inc.

Awarding Agency: Department of Defense

Start Date: 2007-11-01

End Date: 2011-09-30

Contract Duration: 1,429 days

Daily Burn Rate: $49.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 11

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: THE PRODUCTS BEING PURCHASED ARE IN ACCORDANCE WITH THE REQUIREMENTS THAT WHERE RECEIVED FROM THE ACTIVITIES UNDER SOLICITATION SP060-07-R-0211. THESE REQUIREMENT REFLECTED NUMEROUS HEATING FUELS, GASOLINE, HIGH/LOW/ ULTRA LOW SULFUR DIESELS AND OTHER FUELS IN THE ALASKA PROGRAM.

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $70.1 million to PETRO STAR INC. for work described as: THE PRODUCTS BEING PURCHASED ARE IN ACCORDANCE WITH THE REQUIREMENTS THAT WHERE RECEIVED FROM THE ACTIVITIES UNDER SOLICITATION SP060-07-R-0211. THESE REQUIREMENT REFLECTED NUMEROUS HEATING FUELS, GASOLINE, HIGH/LOW/ ULTRA LOW SULFUR DIESELS AND OTHER FUELS IN THE ALASKA PROGRAM… Key points: 1. The contract supports the Alaska Program with various heating fuels and diesel. 2. Petro Star Inc. secured the award through full and open competition. 3. The contract spans over four years, indicating a significant long-term need. 4. The fixed-price with economic price adjustment structure aims to manage fuel cost volatility.

Value Assessment

Rating: good

The contract value of $70 million over four years appears reasonable for supplying diverse fuel types across Alaska. Benchmarking against similar fuel supply contracts would provide a more precise assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition after exclusion of sources, suggesting a robust price discovery process. This method typically leads to competitive pricing.

Taxpayer Impact: The competitive nature of the award is expected to yield fair pricing, minimizing unnecessary taxpayer expenditure for essential fuel supplies.

Public Impact

Ensures consistent fuel supply for critical military and government operations in Alaska. Supports regional economic activity through fuel provision. Potential for price fluctuations due to economic price adjustment clause.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment could lead to cost overruns if fuel prices surge.
Geographic remoteness of Alaska may impact delivery costs and logistics.
Dependence on a single awardee for a critical resource.

Positive Signals

Full and open competition generally drives better pricing.
Long-term contract provides supply stability.
Supports critical infrastructure in a challenging environment.

Sector Analysis

This contract falls within the Petroleum and Petroleum Products Merchant Wholesalers sector. Spending in this sector is crucial for national security and operational readiness, especially in remote regions like Alaska.

Small Business Impact

The data indicates that small businesses were not the primary awardee, and there is no explicit mention of small business subcontracting goals. Further analysis would be needed to determine their involvement.

Oversight & Accountability

The contract was awarded by the Defense Logistics Agency, a key entity for managing supply chains. Oversight would focus on delivery performance, price adherence, and compliance with contract terms.

Related Government Programs

Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Potential for cost escalation due to economic price adjustment.
Logistical challenges and higher costs associated with remote Alaskan delivery.
Dependence on a single contractor for critical fuel supplies.
Limited visibility into small business participation.
Potential for price volatility in the petroleum market.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.1 million to PETRO STAR INC.. THE PRODUCTS BEING PURCHASED ARE IN ACCORDANCE WITH THE REQUIREMENTS THAT WHERE RECEIVED FROM THE ACTIVITIES UNDER SOLICITATION SP060-07-R-0211. THESE REQUIREMENT REFLECTED NUMEROUS HEATING FUELS, GASOLINE, HIGH/LOW/ ULTRA LOW SULFUR DIESELS AND OTHER FUELS IN THE ALASKA PROGRAM.

Who is the contractor on this award?

The obligated recipient is PETRO STAR INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $70.1 million.

What is the period of performance?

Start: 2007-11-01. End: 2011-09-30.

What is the historical price performance of the fuels covered under this contract, and how has the economic price adjustment clause impacted costs in previous periods?

Analyzing historical price trends for heating fuels, gasoline, and diesel in Alaska is crucial. The economic price adjustment (EPA) clause allows for modifications based on market fluctuations. Understanding past EPA impacts would reveal the actual cost variability experienced and whether it aligned with projections or led to unexpected increases for taxpayers.

What specific risks are associated with fuel delivery and storage in remote Alaskan locations, and what mitigation strategies are in place?

Remote Alaskan locations present significant logistical challenges, including extreme weather, limited infrastructure, and long transportation routes, all increasing delivery costs and risk of disruption. Mitigation strategies likely involve robust contingency planning, redundant supply chains where possible, and strict adherence to storage safety regulations to prevent spills or contamination.

How effectively does the 'full and open competition after exclusion of sources' method ensure optimal value and prevent potential collusion in this specialized fuel market?

This method aims to maximize competition by allowing all qualified sources to bid after initial exclusions, theoretically leading to better pricing. However, the specialized nature of fuel supply in Alaska might limit the number of viable bidders. Effectiveness hinges on the clarity of solicitation requirements and robust oversight to ensure fair play and prevent collusion.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060007R0211

Offers Received: 11

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Arctic Slope Regional Corporation (UEI: 076637073)

Address: 3900 C ST STE 802, ANCHORAGE, AK, 00

Business Categories: American Indian Owned Business, Category Business, Minority Owned Business, Native American Owned Business, Small Business

Financial Breakdown

Contract Ceiling: $70,055,361

Exercised Options: $70,055,361

Current Obligation: $70,055,361

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060008D1003

IDV Type: IDC

Timeline