DoD awards $36.4M for JP-8 aviation fuel to Petro Star Inc. under full and open competition
Contract Overview
Contract Amount: $36,398,504 ($36.4M)
Contractor: Petro Star Inc.
Awarding Agency: Department of Defense
Start Date: 2010-09-29
End Date: 2011-01-30
Contract Duration: 123 days
Daily Burn Rate: $295.9K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 13
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: TURBINE FUEL, AVIATION, GRADE JP-8
Place of Performance
Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503
State: Alaska Government Spending
Plain-Language Summary
Department of Defense obligated $36.4 million to PETRO STAR INC. for work described as: TURBINE FUEL, AVIATION, GRADE JP-8 Key points: 1. Significant contract value for aviation fuel. 2. Petro Star Inc. is the sole awardee. 3. Fixed Price with Economic Price Adjustment contract type introduces price volatility risk. 4. Spending falls within the Petroleum Refineries sector.
Value Assessment
Rating: fair
The contract value of $36.4M is substantial. Benchmarking against similar JP-8 fuel contracts is difficult without more specific volume and delivery terms, but the fixed price with economic adjustment suggests potential for cost overruns if market prices rise significantly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This suggests that while competition was sought, specific circumstances or prior exclusions limited the pool of potential bidders, potentially impacting price discovery.
Taxpayer Impact: The economic price adjustment clause means taxpayers are exposed to fluctuations in fuel prices, potentially increasing the final cost beyond initial projections.
Public Impact
Ensures supply of critical aviation fuel for Department of Defense operations. Potential for increased costs to taxpayers due to economic price adjustment. Limited competition may have resulted in a higher price than if broader competition was achieved.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment clause
- Limited competition (exclusion of sources)
- Sole awardee
Positive Signals
- Ensures critical fuel supply
- Awarded by Defense Logistics Agency
Sector Analysis
This contract falls under the Petroleum Refineries sector, specifically for aviation fuel (JP-8). Spending in this sector is highly sensitive to global oil prices and geopolitical events. Benchmarks for fuel contracts vary widely based on type, volume, and delivery location.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a key agency for managing supply chains. Oversight would focus on ensuring fuel quality, timely delivery, and appropriate application of the economic price adjustment clause.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment clause introduces cost uncertainty.
- Limited competition due to source exclusion.
- Sole awardee may indicate lack of robust competition.
- Geographic location (Alaska) may increase logistical costs and limit bidder pool.
- Contract duration is relatively short, potentially leading to frequent re-competition and associated administrative costs.
Tags
petroleum-refineries, department-of-defense, ak, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $36.4 million to PETRO STAR INC.. TURBINE FUEL, AVIATION, GRADE JP-8
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 $36.4 million.
What is the period of performance?
Start: 2010-09-29. End: 2011-01-30.
What was the rationale for excluding sources in the full and open competition?
The exclusion of sources in a 'full and open competition after exclusion of sources' award typically implies that certain pre-qualified vendors met specific technical, security, or logistical requirements that others did not. Understanding the specific criteria for exclusion is crucial to assessing whether the competition was truly as broad as possible and if the selected vendor offered the best value under those constraints.
How does the economic price adjustment clause impact the final cost compared to a fixed-price contract?
An economic price adjustment (EPA) clause allows for changes in contract price based on fluctuations in specified economic factors, such as commodity prices or labor rates. Unlike a firm fixed-price contract, an EPA exposes the government to potential cost increases if these factors rise. This can protect the contractor from unforeseen market volatility but shifts that risk to the taxpayer, potentially leading to higher final expenditures.
What is the typical market price range for JP-8 fuel in Alaska during the contract period?
Determining the precise market price range for JP-8 fuel in Alaska during 2010-2011 requires specialized market data and analysis. Factors like transportation costs to remote locations, regional supply and demand, and global crude oil prices significantly influence pricing. Without access to historical fuel market reports specific to Alaska, it's challenging to benchmark the contract's price effectively against 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: SP060009R0161
Offers Received: 13
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: $36,398,504
Exercised Options: $36,398,504
Current Obligation: $36,398,504
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060010D0494
IDV Type: IDC
Timeline
Start Date: 2010-09-29
Current End Date: 2011-01-30
Potential End Date: 2011-01-30 00:00:00
Last Modified: 2011-01-06
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