DoD spent $19.6M on jet fuel, with Signature Flight Support LLC winning a fixed-price contract

Contract Overview

Contract Amount: $19,614,659 ($19.6M)

Contractor: Signature Flight Support LLC

Awarding Agency: Department of Defense

Start Date: 2009-05-01

End Date: 2013-05-31

Contract Duration: 1,491 days

Daily Burn Rate: $13.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 99

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: JET A W/O FSII JET A W/FSII

Place of Performance

Location: SAVANNAH, CHATHAM County, GEORGIA, 31408

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $19.6 million to SIGNATURE FLIGHT SUPPORT LLC for work described as: JET A W/O FSII JET A W/FSII Key points: 1. Contract awarded to a single vendor, raising questions about competition. 2. Fixed-price contract with economic price adjustment introduces potential cost volatility. 3. Contract duration of nearly 5 years suggests a significant, ongoing need. 4. Awarded under full and open competition, but only one bid was received. 5. The contract's value is substantial for a single vendor supply agreement. 6. Geographic coverage is limited to Georgia, indicating a localized need.

Value Assessment

Rating: fair

The contract value of $19.6 million over approximately four years for jet fuel is a significant expenditure. Benchmarking this against similar fuel contracts is challenging without more specific details on fuel types and delivery locations. The fixed-price with economic price adjustment structure can lead to costs exceeding initial estimates if fuel prices fluctuate significantly. The single bid received, despite full and open competition, suggests potential issues with market interest or the attractiveness of the contract terms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was advertised as full and open competition, which is the preferred method for maximizing market participation. However, only one bid was received from SIGNATURE FLIGHT SUPPORT LLC. This low level of competition could indicate several factors, including a lack of interested vendors, restrictive contract requirements, or insufficient notice. The absence of multiple bids limits the government's ability to leverage competitive pricing and potentially secure better terms.

Taxpayer Impact: When only one bid is received in a full and open competition, taxpayers may not be getting the best possible price. The government loses the opportunity to negotiate based on multiple offers, potentially leading to higher costs than if several companies had competed.

Public Impact

The Department of Defense benefits from a reliable supply of jet fuel for its operations. This contract ensures the availability of essential fuel for military aircraft stationed or operating in Georgia. The contract supports the logistics and operational readiness of military forces within the specified region. It indirectly supports the aviation services sector through the provision of fuel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpayment and lack of vendor innovation.
Economic price adjustment clause introduces uncertainty and potential for cost overruns.
Contract duration may lock the government into a specific vendor relationship, limiting future flexibility.

Positive Signals

Awarded under full and open competition, indicating an attempt to solicit broad market interest.
The vendor, Signature Flight Support LLC, is a known entity in the aviation support industry.
The contract specifies fixed price with economic price adjustment, which can provide some cost certainty while allowing for market fluctuations.

Sector Analysis

The market for aviation fuel is a critical component of the broader energy and transportation sectors. This contract falls under the Petroleum and Petroleum Products Merchant Wholesalers category. The Defense Logistics Agency (DLA) is a major procurer of fuel for military operations globally. Spending on aviation fuel by the DoD is substantial, driven by the extensive operational tempo of its aircraft fleet. Comparable spending benchmarks would typically involve analyzing fuel prices across different military branches and geographic regions, as well as comparing government contract prices to commercial aviation fuel rates.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a small business set-aside. There is no indication of specific subcontracting requirements for small businesses within the provided data. The primary awardee, Signature Flight Support LLC, is a large business. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the fuel supply chain itself may involve small businesses.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The Defense Contract Audit Agency (DCAA) may conduct audits to ensure compliance with contract terms and pricing. The Defense Contract Management Agency (DCMA) would likely be responsible for contract administration. Transparency is facilitated through contract databases like FPDS. Inspector General oversight from the Department of Defense would apply to any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Defense Logistics Agency Fuel Contracts
Department of Defense Aviation Fuel Procurement
Jet Fuel Supply Agreements
Fixed Price with Economic Price Adjustment Contracts

Risk Flags

Low Competition
Economic Price Adjustment Clause
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to SIGNATURE FLIGHT SUPPORT LLC. JET A W/O FSII JET A W/FSII

Who is the contractor on this award?

The obligated recipient is SIGNATURE FLIGHT SUPPORT LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2009-05-01. End: 2013-05-31.

What is the historical spending pattern for jet fuel by the Defense Logistics Agency in Georgia?

Analyzing historical spending for jet fuel by the DLA in Georgia requires access to detailed procurement data beyond this single contract. However, general trends indicate a consistent need for aviation fuel to support military operations. The DLA manages a vast global supply chain, and spending in specific regions like Georgia would fluctuate based on base operations, training exercises, and deployment schedules. Without specific historical data for this region, it's difficult to provide precise figures, but the $19.6 million awarded to Signature Flight Support LLC over nearly five years suggests a significant and ongoing requirement that aligns with typical military fuel demands in a state with substantial military aviation presence.

How does the pricing of this contract compare to commercial jet fuel rates in Georgia during the contract period?

Comparing the pricing of this DoD contract to commercial jet fuel rates requires detailed market data for the period of May 2009 to May 2013. Commercial jet fuel prices are influenced by global oil markets, refinery capacity, and regional demand. The contract's 'Fixed Price with Economic Price Adjustment' (FPEPA) clause means the final price could vary. While FPEPA aims to protect both parties from extreme market volatility, it can sometimes result in prices higher than fixed-price contracts or spot market rates if the economic adjustments are significant. A thorough comparison would involve accessing historical commercial fuel price indices for the southeastern US and analyzing the specific economic adjustment factors applied to this contract.

What are the risks associated with a fixed-price contract with economic price adjustment for fuel procurement?

The primary risk associated with a Fixed Price with Economic Price Adjustment (FPEPA) contract for fuel procurement lies in cost uncertainty for the government. While it allows for adjustments based on market fluctuations (e.g., oil prices), it can lead to higher overall expenditures than a firm fixed-price contract if market prices rise significantly. The government bears the risk of these upward price movements, potentially exceeding budget allocations. Conversely, the contractor is protected from losses due to price increases. This structure requires robust monitoring of economic indicators and clear definitions of adjustment mechanisms to prevent excessive cost growth and ensure fair pricing.

What is the track record of Signature Flight Support LLC in fulfilling government contracts, particularly for fuel supply?

Signature Flight Support LLC is a major provider of aviation ground support services, including fuel. While this specific contract was for $19.6 million over nearly five years, their broader experience includes numerous contracts with government entities, often at airports where they provide FBO (Fixed-Base Operator) services. Their track record generally indicates capability in handling large-scale fuel supply operations. However, the fact that this contract received only one bid warrants further investigation into whether there were past performance issues or specific contract terms that deterred other potential bidders. A deeper dive into past performance evaluations and any disputes or contract terminations would provide a more complete picture.

What does the low competition (one bid) for this contract imply about the market for military jet fuel in Georgia?

The receipt of only one bid for this full and open competition contract suggests potential challenges within the specific market for military jet fuel supply in Georgia. This could stem from several factors: the geographic scope might be too limited or too specific for multiple large suppliers to find profitable, the contract requirements (e.g., delivery methods, volume, specific fuel types) might be highly specialized, or the anticipated profit margins may not have been attractive enough to warrant bids from multiple competitors. It could also indicate a consolidation within the market or that competitors were otherwise engaged. This lack of competition limits the government's leverage in price negotiation and potentially reduces the incentive for vendors to offer their best pricing.

How does the contract's duration (1491 days) impact the government's flexibility and potential for cost savings?

A contract duration of 1491 days (approximately four years) provides the government with supply stability and reduces the administrative burden associated with frequent re-competitions. This is particularly valuable for essential commodities like jet fuel. However, it also reduces flexibility. If market prices were to drop significantly or if a more advantageous contract structure became available, the government would be locked into the current terms until expiration. For a volatile commodity like fuel, a longer duration increases the risk of paying above-market rates if prices fall, although the economic price adjustment clause aims to mitigate this. Shorter contract durations might allow for more frequent price adjustments and competition, potentially leading to savings, but at the cost of increased administrative effort and potential supply disruptions.

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: SP060008R0229

Offers Received: 99

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Standardaero Aviation Holdings, Inc. (UEI: 212078364)

Address: 1001 DAVIDSON DR STE 150, SAVANNAH, GA, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,614,659

Exercised Options: $19,614,659

Current Obligation: $19,614,659

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060009D0125

IDV Type: IDC

Timeline