DoD spent $18.1M on jet fuel, with 70% of contract value awarded to a single vendor

Contract Overview

Contract Amount: $18,086,028 ($18.1M)

Contractor: Freeman Holdings of Washington, L.L.C

Awarding Agency: Department of Defense

Start Date: 2010-04-01

End Date: 2014-03-31

Contract Duration: 1,460 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 70

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: JET A W/O FSII

Place of Performance

Location: MOSES LAKE, GRANT County, WASHINGTON, 98837

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $18.1 million to FREEMAN HOLDINGS OF WASHINGTON, L.L.C for work described as: JET A W/O FSII Key points: 1. Contract awarded through full and open competition, suggesting a broad market search. 2. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces potential for cost fluctuations. 3. The contract duration of 1460 days (4 years) indicates a long-term need for the specified fuel. 4. The North American Industry Classification System (NAICS) code 424720 points to wholesale distribution of petroleum products. 5. The contract was awarded in April 2010, with an end date in March 2014, reflecting historical spending. 6. The award was a Delivery Order (DO), suggesting it was part of a larger contract vehicle or program.

Value Assessment

Rating: fair

The total award amount of $18.1 million for jet fuel over four years averages to approximately $4.5 million annually. Without specific benchmarks for jet fuel pricing during the 2010-2014 period, a precise value-for-money assessment is challenging. However, the FPEPA clause suggests that the government accepted some risk of price increases, which could impact the final cost compared to a fixed-price contract. The significant portion awarded to a single entity warrants further scrutiny regarding competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. With 70% of the contract value going to FREEMAN HOLDINGS OF WASHINGTON, L.L.C, it suggests that while competition was allowed, this vendor was the most competitive or capable for the majority of the requirement. The number of bidders is not explicitly stated, but the award distribution implies that other bidders may have received smaller portions or were not selected for the bulk of the work.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best prices through market forces. However, the concentration of the award value on one vendor could indicate potential market limitations or specific capabilities that reduced the overall competitive pressure for the entire contract amount.

Public Impact

The Department of Defense (DoD) benefits from a reliable supply of jet fuel essential for military operations. This contract ensures the availability of 'JET A W/O FSII' (Jet A fuel without Fuel System Icing Inhibitor), a specific type of aviation fuel. The geographic impact is primarily within Washington state, as indicated by the vendor's location. The contract supports the logistics and supply chain workforce involved in fuel distribution and delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility due to the Economic Price Adjustment clause.
Concentration of award value to a single vendor may limit future competitive opportunities.
Lack of specific competition details (number of bidders) hinders a full assessment of price discovery.

Positive Signals

Awarded through full and open competition, maximizing potential bidder pool.
Long-term contract provides supply chain stability for essential fuel.
Vendor is located within the state of award, potentially streamlining logistics.

Sector Analysis

The petroleum and petroleum products wholesale distribution sector is critical for supplying fuel to various industries, including transportation and defense. This contract falls within the broader energy and logistics markets. The total spending on this specific type of fuel by the DoD over the contract period represents a portion of the agency's overall energy procurement budget. Benchmarking this contract's value would require comparing the price per gallon of JET A fuel during the 2010-2014 period against market indices and similar government contracts.

Small Business Impact

The contract details indicate that small business participation was not a primary focus, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. This suggests that the contract was not specifically set aside for small businesses, nor was the prime contractor a small business. There is no explicit information on subcontracting plans for small businesses within the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. The Defense Contract Management Agency (DCMA) often plays a role in monitoring contract performance and compliance. Transparency is facilitated through contract databases like FPDS-NG (Federal Procurement Data System - Next Generation), where this award is recorded. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Fuel Supply Center contracts
Aviation fuel procurement
Petroleum product wholesale distribution
Department of Defense logistics contracts

Risk Flags

Potential price volatility due to EPA clause
Concentration of award value to a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.1 million to FREEMAN HOLDINGS OF WASHINGTON, L.L.C. JET A W/O FSII

Who is the contractor on this award?

The obligated recipient is FREEMAN HOLDINGS OF WASHINGTON, L.L.C.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.1 million.

What is the period of performance?

Start: 2010-04-01. End: 2014-03-31.

What was the average price per gallon of JET A fuel under this contract, and how does it compare to market rates during the 2010-2014 period?

The provided data does not include the quantity of fuel purchased, making it impossible to calculate the average price per gallon. To determine this, one would need access to the delivery order details specifying the volume of fuel procured against the total award amount of $18.1 million. Comparing this to market rates would require accessing historical fuel price indices for JET A fuel, such as those published by the Energy Information Administration (EIA) or industry-specific market reports, for the period between April 1, 2010, and March 31, 2014. Without the quantity, a per-unit cost analysis is not feasible.

What specific economic factors were considered in the Economic Price Adjustment (EPA) clause for this contract?

The provided data does not specify the exact economic factors included in the Economic Price Adjustment (EPA) clause for this contract. Typically, EPA clauses are tied to objective economic indicators such as fluctuations in the price of crude oil, refined fuel products, or transportation costs. These indices are usually defined in the contract's terms and conditions. To understand the specific triggers and adjustments, one would need to review the full contract document, specifically the 'Economic Price Adjustment' section, which would detail the baseline prices and the formulas or indices used for adjustments.

How many bids were received for this contract, and what was the distribution of award amounts among bidders?

The data indicates that the contract was awarded under 'full and open competition' and that FREEMAN HOLDINGS OF WASHINGTON, L.L.C received 70% of the total award value ($12,660,219.68 based on $18,086,028.11 total). However, the specific number of bids received is not provided in the summary data. The remaining 30% of the award value ($5,425,808.43) was distributed among other vendors, but their identities and the number of distinct awards are not detailed. A full analysis would require examining the detailed award data to identify all recipients and the number of competing offers.

What is the significance of the NAICS code 424720 (Petroleum and Petroleum Products Merchant Wholesalers) in the context of this contract?

The North American Industry Classification System (NAICS) code 424720 signifies that the primary business activity of the vendors involved in this contract is the wholesale distribution of petroleum and petroleum products. This includes businesses that wholesale fuels, lubricants, and other petroleum products, operating bulk storage facilities or terminals. For this contract, it means the Department of Defense was procuring jet fuel through established wholesale distribution channels, rather than directly from a refinery or producer. This code helps categorize the type of industry and market the contract operates within.

What is the historical spending trend for JET A fuel by the Department of Defense, and how does this $18.1M contract fit into that trend?

The provided data only offers details for a single contract awarded from 2010 to 2014. To establish a historical spending trend for JET A fuel by the DoD, a comprehensive analysis of procurement data across multiple fiscal years and contract vehicles would be necessary. This would involve aggregating spending on similar fuel types (e.g., JP-8, JP-5) and identifying patterns in contract awards, quantities, and pricing. This specific $18.1 million contract represents a snapshot of spending during that four-year period, likely contributing to the DoD's overall aviation fuel budget, but its place within a larger trend cannot be determined from this isolated data point.

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: SP060009R0227

Offers Received: 70

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

Evaluated Preference: NONE

Contractor Details

Address: 7810 ANDREWS ST NE STE 134, MOSES LAKE, WA, 04

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $18,086,028

Exercised Options: $18,086,028

Current Obligation: $18,086,028

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060010D0023

IDV Type: IDC

Timeline