DLA Awards $139M for JP8 Fuel to Wynnewood Energy Co. LLC Under Full and Open Competition

Contract Overview

Contract Amount: $139,029,859 ($139.0M)

Contractor: Wynnewood Energy CO LLC

Awarding Agency: Department of Defense

Start Date: 2009-03-25

End Date: 2010-04-30

Contract Duration: 401 days

Daily Burn Rate: $346.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 26

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: TRUBINE FUEL, JP8

Place of Performance

Location: WYNNEWOOD, GARVIN County, OKLAHOMA, 73098

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $139.0 million to WYNNEWOOD ENERGY CO LLC for work described as: TRUBINE FUEL, JP8 Key points: 1. Significant contract value of $139 million for a critical fuel commodity. 2. Competition was full and open after exclusion of sources, suggesting a competitive process. 3. Risk is moderate due to fuel price volatility and fixed-price with economic adjustment terms. 4. The sector is energy/defense logistics, vital for military operations.

Value Assessment

Rating: good

The contract value of $139 million for JP8 fuel appears reasonable given the quantity and duration. Benchmarking against similar fuel contracts would provide a more precise assessment of pricing effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition after exclusion of sources. This method generally promotes price discovery and competitive pricing, though the specific exclusion criteria warrant review.

Taxpayer Impact: The competitive nature of the award is intended to ensure taxpayer funds are used efficiently for essential fuel procurement.

Public Impact

Ensures a stable supply of JP8 fuel for Department of Defense operations. Supports the energy sector through a large procurement contract. Potential impact on fuel prices for other government agencies and commercial markets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clauses can lead to cost overruns if fuel prices spike unexpectedly.
Dependence on a single supplier for a critical commodity carries inherent risk.
The exclusion of sources in the competition, even if justified, warrants scrutiny.

Positive Signals

Full and open competition generally leads to better pricing.
The contract duration and value indicate a significant and stable demand.
Award to a domestic refiner supports national energy infrastructure.

Sector Analysis

This contract falls within the energy and defense logistics sector, specifically the procurement of aviation fuel. Spending benchmarks for fuel procurement vary widely based on market conditions and geopolitical factors.

Small Business Impact

The contract was awarded to Wynnewood Energy Co. LLC, a refiner. Analysis of subcontracting opportunities for small businesses is not provided in the data, but large fuel contracts often have limited direct small business participation.

Oversight & Accountability

The Department of Defense, through the Defense Logistics Agency, is responsible for this procurement. Standard oversight mechanisms for fuel contracts would apply, including performance monitoring and financial audits.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Potential for cost overruns due to economic price adjustment.
Dependence on a single supplier for a critical commodity.
Lack of detail on small business participation.
Justification for source exclusion needs further review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $139.0 million to WYNNEWOOD ENERGY CO LLC. TRUBINE FUEL, JP8

Who is the contractor on this award?

The obligated recipient is WYNNEWOOD ENERGY CO LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $139.0 million.

What is the period of performance?

Start: 2009-03-25. End: 2010-04-30.

What was the specific justification for excluding sources prior to the full and open competition, and did this exclusion impact the final price?

The justification for excluding sources prior to the full and open competition is not detailed in the provided data. Typically, such exclusions are based on technical requirements, national security concerns, or prior performance issues. Understanding this rationale is crucial to assess if it limited the competitive pool and potentially influenced the final price achieved, even within a full and open framework.

How volatile has the price of JP8 fuel been during the contract period, and what was the actual impact of the economic price adjustment clause on the total cost?

The volatility of JP8 fuel prices during the contract period (March 2009 - April 2010) directly influenced the total expenditure due to the economic price adjustment clause. Analyzing historical fuel price data for JP8 during this timeframe would reveal the extent of price fluctuations. Quantifying the difference between a fixed price and the actual cost paid under the adjustment clause would highlight the financial impact on the government.

What is the benchmark cost per gallon for JP8 fuel during the contract period, and how does Wynnewood Energy Co. LLC's pricing compare?

Establishing a precise benchmark cost per gallon for JP8 fuel during the contract period requires access to market data specific to that time and region. Without this external data, a direct comparison is difficult. However, the contract's economic price adjustment mechanism suggests that the pricing was intended to track market rates, implying it was likely competitive within the prevailing market conditions.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060009R0061

Offers Received: 26

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

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Gary-Williams Company (UEI: 836503003)

Address: 370 17TH ST STE 5300, DENVER, CO, 90

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

Financial Breakdown

Contract Ceiling: $139,029,859

Exercised Options: $139,029,859

Current Obligation: $139,029,859

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060009D0462

IDV Type: IDC

Timeline