DoD's $74.5M JP8 Turbine Fuel Contract Awarded to Wynnewood Energy Co. LLC Under Full and Open Competition

Contract Overview

Contract Amount: $74,465,821 ($74.5M)

Contractor: Wynnewood Energy CO LLC

Awarding Agency: Department of Defense

Start Date: 2009-03-24

End Date: 2010-04-30

Contract Duration: 402 days

Daily Burn Rate: $185.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 26

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: TURBINE FUEL, JP8

Place of Performance

Location: WYNNEWOOD, GARVIN County, OKLAHOMA, 73098

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $74.5 million to WYNNEWOOD ENERGY CO LLC for work described as: TURBINE FUEL, JP8 Key points: 1. Significant contract value of $74.5 million for turbine fuel. 2. Awarded under full and open competition, suggesting market availability. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces potential price volatility. 4. The Petroleum Refineries sector is critical for defense logistics.

Value Assessment

Rating: fair

The contract value of $74.5 million is substantial. Without specific unit pricing benchmarks for JP8 fuel during the contract period (2009-2010), a direct comparison is difficult. However, the FPEPA clause suggests potential for price increases beyond initial estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing, but the FPEPA clause allows for adjustments that could impact the final price paid.

Taxpayer Impact: The use of full and open competition is generally beneficial for taxpayers by fostering price discovery. However, the economic price adjustment mechanism introduces uncertainty regarding the final cost.

Public Impact

Ensures a critical fuel supply for Department of Defense operations. The FPEPA clause may lead to higher costs for taxpayers if fuel prices rise significantly. Competition in this sector is vital for maintaining stable fuel prices for government agencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic Price Adjustment clause introduces cost uncertainty.
Contract awarded in 2009-2010, historical data may not reflect current market conditions.
No specific mention of small business participation.

Positive Signals

Awarded under full and open competition.
Adequate number of offers (26) received.
Contract type is standard for fuel procurement.

Sector Analysis

The petroleum refineries sector is essential for national security, providing critical fuels like JP8. Spending benchmarks for this sector can vary widely based on global oil prices and geopolitical factors. This contract represents a significant portion of spending within this niche.

Small Business Impact

The data indicates that this contract was not set aside for small businesses and that the awardee is not a small business. Further analysis would be needed to determine if small businesses had opportunities to participate as subcontractors.

Oversight & Accountability

The award was made by the Defense Logistics Agency, a key component for managing supply chains. Oversight would focus on the execution of the FPEPA clause and ensuring fair pricing throughout the contract term.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Potential for cost overruns due to FPEPA.
Lack of current market data for historical comparison.
No explicit mention of small business utilization.
Contract awarded over a decade ago.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.5 million to WYNNEWOOD ENERGY CO LLC. TURBINE 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 $74.5 million.

What is the period of performance?

Start: 2009-03-24. End: 2010-04-30.

What was the actual price range experienced by the government under the FPEPA clause for this contract, and how did it compare to market benchmarks at the time?

Analyzing the specific price adjustments under the FPEPA clause would reveal the true cost impact. Comparing these adjusted prices against contemporaneous market indices for JP8 fuel would determine if the government overpaid or received a fair price despite the price escalation mechanism. This would provide insight into the effectiveness of the contract's pricing structure.

Were there any identified risks related to the supplier's capacity or reliability in fulfilling this large fuel contract?

Given the substantial value and the critical nature of JP8 fuel for military operations, assessing Wynnewood Energy Co. LLC's capacity and reliability would have been a key risk mitigation step. Any concerns regarding their ability to meet demand, maintain quality, or ensure timely delivery could have significantly impacted mission readiness and warranted closer oversight.

How effectively did the full and open competition process ensure the best value for the taxpayer, considering the FPEPA clause?

While full and open competition is a strong indicator of seeking best value, the FPEPA clause introduces a variable. The effectiveness hinges on whether the initial base price was competitive and if the economic adjustment formula accurately reflected market fluctuations without excessive padding. A thorough review would compare the final awarded price against alternative procurement strategies or 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

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: $74,465,821

Exercised Options: $74,465,821

Current Obligation: $74,465,821

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060009D0478

IDV Type: IDC

Timeline