DoD's $120M Petroleum Contract Awarded to PETROLEUM TRADERS CORP Amidst Full and Open Competition
Contract Overview
Contract Amount: $119,814,582 ($119.8M)
Contractor: Petroleum Traders Corp
Awarding Agency: Department of Defense
Start Date: 2010-08-24
End Date: 2013-08-30
Contract Duration: 1,102 days
Daily Burn Rate: $108.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 52
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: BD1, DS1, DS2, E85, FL2, FS2, GUM, GUR, MMR, MRR
Place of Performance
Location: FORT WAYNE, ALLEN County, INDIANA, 46804
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $119.8 million to PETROLEUM TRADERS CORP for work described as: BD1, DS1, DS2, E85, FL2, FS2, GUM, GUR, MMR, MRR Key points: 1. Contract value of $119.8M for petroleum products. 2. Awarded by the Department of Defense to PETROLEUM TRADERS CORP. 3. Utilized full and open competition after exclusion of sources. 4. Contract duration of 1102 days. 5. Fixed Price with Economic Price Adjustment contract type.
Value Assessment
Rating: good
The contract value of $119.8M appears reasonable for the scope of petroleum products and services provided over a nearly three-year period. Benchmarking against similar large-scale fuel procurement contracts would offer further validation.
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, indicating a competitive bidding process. This method generally promotes price discovery and ensures fair market value.
Taxpayer Impact: The competitive nature of the award suggests taxpayers received a fair price for the petroleum products procured by the Department of Defense.
Public Impact
Ensures a steady supply of essential petroleum products for military operations. Supports national energy security by maintaining strategic fuel reserves. Impacts the broader energy market through significant procurement volume. Potential for price fluctuations due to economic price adjustment clause.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may lead to cost overruns.
- Reliance on a single supplier for critical petroleum products.
- Geopolitical risks affecting global petroleum prices.
Positive Signals
- Competitive bidding process likely secured favorable pricing.
- Contract duration provides stability in supply chain.
- Award to established company suggests reliability.
Sector Analysis
The petroleum and petroleum products merchant wholesalers sector is critical for national defense and economic stability. Spending benchmarks for fuel procurement vary significantly based on geopolitical factors and market demand.
Small Business Impact
The contract was awarded to PETROLEUM TRADERS CORP, and there is no indication of small business participation or subcontracting requirements in the provided data. Further investigation into subcontracting opportunities would be beneficial.
Oversight & Accountability
The Department of Defense's procurement process, including full and open competition, is subject to oversight by various government agencies and inspectors general to ensure accountability and prevent waste.
Related Government Programs
- Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) clause introduces cost uncertainty.
- Potential for limited competition if 'exclusion of sources' was broad.
- Dependence on a single contractor for critical fuel supply.
- Vulnerability to global petroleum market price volatility.
Tags
petroleum-and-petroleum-products-merchan, department-of-defense, in, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $119.8 million to PETROLEUM TRADERS CORP. BD1, DS1, DS2, E85, FL2, FS2, GUM, GUR, MMR, MRR
Who is the contractor on this award?
The obligated recipient is PETROLEUM TRADERS CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $119.8 million.
What is the period of performance?
Start: 2010-08-24. End: 2013-08-30.
What is the potential impact of the economic price adjustment clause on the final cost to taxpayers?
The economic price adjustment (EPA) clause allows for changes in contract price based on fluctuations in specific economic factors, such as the cost of raw materials or labor. For petroleum contracts, this often means the price can increase if global oil prices rise. While intended to protect contractors from unforeseen cost increases and ensure supply, it introduces uncertainty for taxpayers, as the final cost could exceed the initial fixed price estimate, especially in volatile market conditions.
How does the 'exclusion of sources' in the competition method affect the overall competitiveness and taxpayer value?
The 'full and open competition after exclusion of sources' method implies that while the competition was broadly open, certain potential sources were intentionally excluded, possibly due to specific requirements or prior performance issues. This could potentially limit the number of bidders compared to a purely open competition. However, if the exclusions were justified and the remaining pool of bidders was still robust, it could still lead to competitive pricing. The key is understanding the rationale for exclusion to assess if it unduly restricted competition and potentially impacted taxpayer value.
What are the risks associated with relying on a single primary awardee for such a significant volume of petroleum products?
Relying on a single awardee, even with competition in the award process, carries inherent risks. Supply chain disruptions due to unforeseen events (e.g., natural disasters, geopolitical conflicts affecting the contractor's operations) could impact delivery. Furthermore, a lack of ongoing competition for follow-on needs might reduce future price leverage. While the contract duration provides stability, contingency plans for alternative sourcing or surge capacity should be considered to mitigate potential supply interruptions.
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 AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 52
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 7120 POINTE INVERNESS WY, FORT WAYNE, IN, 03
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $119,814,582
Exercised Options: $119,814,582
Current Obligation: $119,814,582
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060010D4025
IDV Type: IDC
Timeline
Start Date: 2010-08-24
Current End Date: 2013-08-30
Potential End Date: 2013-08-30 00:00:00
Last Modified: 2013-09-03
More Contracts from Petroleum Traders Corp
- Federal Contract — $173.1M (Department of Defense)
- 200611!002690!97as!sp0600!defense Energy Support Center !SP060004D4532 !A!N! !N!B001 !29 !20060302!20090630!021640487!021640487!021640487!n!petroleum Traders Corporation !7110 Pointe Inverness WAY !fort Wayne !in!46804!25000!003!18!fort Wayne !allen !indiana !+000000351115!n!y!000000000000!9130!liquid Propellants & Fuel, Petroleum Base !a8a!petroleum !000 !NOT Discernable !424720!E! !3!A!S!A! ! !99990909!B! ! !A! !a!u!k!2!002!b! !Z!N!Z! ! !y!b!n!n! ! !C! !a!a!000!a!b!n! ! ! ! ! ! !0001! ! — $107.8M (Department of Defense)
- Petroleum — $86.5M (Department of Defense)
- Ultra LOW Sulfur Diesel, Gasoline, Biodiesel and Ethanol Delivered to Various Installations and Federal Civilian Activities in the Southeast US — $63.6M (Department of Defense)
- COG3 Deliveries for RFG REG UNL, Gasoline REG UNL, Ethanol, Winter Ulsd, Summer Ulsd, Fuel OIL Burner #2, Red-Dyed Ulsd #2, Biodiesel, RFG Prem UNL, Gasohol REG UNL, Gasohol MID UNL Fuel — $46.9M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)