DoD Awards $93.7M for Jet Fuel to Petro Star Inc. Under Full and Open Competition

Contract Overview

Contract Amount: $93,669,179 ($93.7M)

Contractor: Petro Star Inc.

Awarding Agency: Department of Defense

Start Date: 2009-08-21

End Date: 2010-10-30

Contract Duration: 435 days

Daily Burn Rate: $215.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 19

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: JP4, JP5, JP8

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $93.7 million to PETRO STAR INC. for work described as: JP4, JP5, JP8 Key points: 1. Significant contract value of $93.7 million for essential jet fuels. 2. Petro Star Inc. secured the award, indicating strong market presence. 3. Risk is moderate, tied to fuel price volatility and supply chain disruptions. 4. Spending falls within the Defense sector, specifically logistics and fuel supply.

Value Assessment

Rating: good

The contract value of $93.7 million for jet fuel appears reasonable given the commodity's market fluctuations and the fixed-price with economic price adjustment structure. Benchmarking against similar fuel contracts would provide a more precise assessment.

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, suggesting a robust price discovery process. This method typically leads to competitive pricing by allowing all eligible sources to bid.

Taxpayer Impact: Taxpayer funds are utilized efficiently through competitive bidding, ensuring fair market value for critical defense fuel supplies.

Public Impact

Ensures a steady supply of vital jet fuels (JP4, JP5, JP8) for Department of Defense operations. Supports national security by maintaining readiness of military aviation assets. Economic impact on the fuel refining sector and associated supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for economic price adjustments to increase final cost.
Geopolitical factors impacting global fuel prices.
Dependence on a single supplier for a critical commodity.

Positive Signals

Awarded through full and open competition.
Contract ensures supply chain continuity for defense needs.
Fixed-price elements provide some cost control.

Sector Analysis

This contract falls within the energy and defense logistics sectors, focusing on the procurement of specialized jet fuels. Spending benchmarks for similar fuel procurements by the DoD are typically in the tens to hundreds of millions of dollars.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as Petro Star Inc. is a large entity. There is no direct small business set-aside or subcontracting information provided.

Oversight & Accountability

The Department of Defense, through the Defense Logistics Agency, is responsible for oversight. The contract's fixed-price with economic price adjustment terms require careful monitoring to manage cost escalations and ensure value for money.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Price volatility of petroleum products.
Potential for cost overruns due to economic price adjustments.
Dependence on a single contractor for critical fuel supply.
Geopolitical risks affecting global fuel markets.
Supply chain disruptions impacting delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $93.7 million to PETRO STAR INC.. JP4, JP5, JP8

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 $93.7 million.

What is the period of performance?

Start: 2009-08-21. End: 2010-10-30.

What is the historical price trend for JP4, JP5, and JP8 fuels during the contract period?

Analyzing historical price trends for these specific jet fuels during the 2009-2010 contract period is crucial. Understanding market volatility and the impact of economic price adjustments would reveal whether the final cost was significantly higher than initial projections and if the EPA mechanism effectively shielded the government from extreme price spikes or benefited it during price drops.

What were the specific reasons for excluding other sources during the 'full and open competition after exclusion of sources' process?

The exclusion of sources in a 'full and open competition after exclusion of sources' scenario typically arises from specific technical requirements, unique capabilities, or logistical necessities that only a limited number of entities can meet. Understanding these reasons is vital to assess if the competition was genuinely broad or if the exclusion criteria inadvertently limited viable bidders, potentially impacting price discovery and overall value.

How does the per-unit cost of this fuel contract compare to other similar DoD fuel procurements during the same period?

Comparing the per-unit cost of this contract against similar Department of Defense fuel procurements from the same timeframe is essential for evaluating value. Without this benchmark, it's difficult to ascertain if Petro Star Inc.'s pricing was competitive. Factors like delivery location, specific fuel grade, and contract terms (like EPA) need to be considered for a fair comparison.

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: SP060009R0161

Offers Received: 19

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: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Minority Owned Business, Native American Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $93,669,179

Exercised Options: $93,669,179

Current Obligation: $93,669,179

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060009D0513

IDV Type: IDC

Timeline