DoD awards $32.3M for JP8 aviation fuel in Hawaii, with full and open competition
Contract Overview
Contract Amount: $32,269,428 ($32.3M)
Contractor: PAR Hawaii Refining LLC
Awarding Agency: Department of Defense
Start Date: 2010-09-29
End Date: 2010-12-31
Contract Duration: 93 days
Daily Burn Rate: $347.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 13
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: TURBINE FUEL AVIATION, JP8. ROCKY MOUNTAIN WEST SUPPLEMENTAL. SOLICITATION SP0600-09-R-0161-0002.
Place of Performance
Location: KAPOLEI, HONOLULU County, HAWAII, 96707
State: Hawaii Government Spending
Plain-Language Summary
Department of Defense obligated $32.3 million to PAR HAWAII REFINING LLC for work described as: TURBINE FUEL AVIATION, JP8. ROCKY MOUNTAIN WEST SUPPLEMENTAL. SOLICITATION SP0600-09-R-0161-0002. Key points: 1. Contract awarded to PAR Hawaii Refining LLC for essential aviation fuel. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract value is substantial, reflecting significant fuel demand. 4. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces price volatility risk.
Value Assessment
Rating: good
The contract value of $32.3M for a 93-day period appears reasonable given the nature of fuel procurement. Benchmarking against similar fuel contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, indicating that multiple bidders were likely solicited. This method generally promotes competitive pricing and ensures the government receives fair market value.
Taxpayer Impact: The competitive nature of the award suggests taxpayers benefited from a market-driven price, though the economic price adjustment clause could lead to higher costs if fuel prices rise.
Public Impact
Ensures critical aviation fuel supply for Department of Defense operations in the Rocky Mountain West region. Supports military readiness by providing necessary fuel for aircraft. Potential for price fluctuations due to the economic price adjustment clause impacts budget predictability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) clause introduces price risk.
- Short contract duration (93 days) may necessitate frequent re-solicitation and potential price increases.
Positive Signals
- Full and open competition utilized.
- Awarded to a single, established refiner, potentially ensuring reliable supply.
Sector Analysis
This contract falls within the petroleum refining sector, specifically for aviation fuel. Spending benchmarks for fuel procurement vary widely based on volume, type, and geopolitical factors.
Small Business Impact
The data indicates this contract was not awarded to a small business. The large value and specific nature of fuel refining likely favor larger, established companies.
Oversight & Accountability
The Department of Defense, through the Defense Logistics Agency, managed this procurement. Standard oversight mechanisms for fuel contracts would apply, focusing on delivery, quality, and price adherence.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) clause.
- Short contract duration.
- Potential for price volatility in the fuel market.
- Dependence on a single supplier for this specific award.
Tags
petroleum-refineries, department-of-defense, hi, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.3 million to PAR HAWAII REFINING LLC. TURBINE FUEL AVIATION, JP8. ROCKY MOUNTAIN WEST SUPPLEMENTAL. SOLICITATION SP0600-09-R-0161-0002.
Who is the contractor on this award?
The obligated recipient is PAR HAWAII REFINING LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $32.3 million.
What is the period of performance?
Start: 2010-09-29. End: 2010-12-31.
What is the historical price trend for JP8 fuel in the Hawaii region during the contract period?
Analyzing historical JP8 fuel prices in Hawaii during the contract period (September-December 2010) would reveal the impact of the economic price adjustment. Understanding market volatility and any specific supply chain disruptions would clarify whether the EPA clause protected or harmed the government's financial interests.
How did the awarded price compare to other bids received under the full and open competition?
Comparing the awarded price to other bids submitted during the full and open competition is crucial for assessing value. If the awarded price was significantly higher than competing offers, it might indicate an issue with the price discovery mechanism or the specific terms negotiated, despite the competitive process.
What is the typical lead time and cost associated with securing aviation fuel contracts of this magnitude?
The typical lead time and cost for securing aviation fuel contracts of this size are influenced by market conditions, refinery capacity, and logistical challenges. A shorter-than-usual procurement cycle or unusually high costs could signal underlying risks in the supply chain or competitive landscape.
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: SP060009R0161
Offers Received: 13
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Tesoro Corporation (UEI: 008133480)
Address: 91-325 KOMOHANA STREET, KAPOLEI, HI, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,269,428
Exercised Options: $32,269,428
Current Obligation: $32,269,428
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060010D0500
IDV Type: IDC
Timeline
Start Date: 2010-09-29
Current End Date: 2010-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2010-10-28
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