DoD's $23.8M Natural Gas Contract with Colonial Energy Inc. Awarded Under Full and Open Competition
Contract Overview
Contract Amount: $23,776,218 ($23.8M)
Contractor: Colonial Energy Inc
Awarding Agency: Department of Defense
Start Date: 2010-10-01
End Date: 2012-09-30
Contract Duration: 730 days
Daily Burn Rate: $32.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 29
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: A-DIRECT SUPPLY OF NATURAL GAS
Place of Performance
Location: FORT BRAGG, CUMBERLAND County, NORTH CAROLINA, 28310
Plain-Language Summary
Department of Defense obligated $23.8 million to COLONIAL ENERGY INC for work described as: A-DIRECT SUPPLY OF NATURAL GAS Key points: 1. Contract Value: $23.8 million over 2 years. 2. Competition: Awarded via full and open competition, indicating market availability. 3. Risk: Fixed Price with Economic Price Adjustment (EPA) introduces potential cost volatility. 4. Sector: Energy sector, specifically natural gas supply.
Value Assessment
Rating: fair
The contract value of $23.8 million for a 2-year natural gas supply appears reasonable given market fluctuations. However, the fixed-price with EPA structure warrants close monitoring for potential cost overruns compared to fixed-price contracts without adjustments.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting multiple vendors could have bid. This method generally promotes competitive pricing, but the EPA clause may have influenced bid strategies and final pricing.
Taxpayer Impact: Taxpayers are exposed to potential price increases due to the economic price adjustment clause, though the competitive award aims to mitigate excessive costs.
Public Impact
Ensures a stable supply of natural gas for Department of Defense operations. Potential for price fluctuations impacts budget predictability for the agency. Supports the energy sector through government procurement. Transparency in pricing is reduced due to the EPA clause.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) clause can lead to cost increases.
- Contract duration of 2 years may not capture long-term market trends.
- Lack of specific performance metrics makes it hard to assess efficiency.
Positive Signals
- Awarded through full and open competition, suggesting fair market pricing.
- Contract supports critical energy infrastructure for national defense.
Sector Analysis
This contract falls within the energy sector, specifically the extraction and supply of natural gas. Government spending in this area is crucial for maintaining operational readiness, but subject to volatile commodity prices.
Small Business Impact
The data does not indicate if small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
Oversight would focus on monitoring the economic price adjustments to ensure they align with market indices and prevent unjustified cost increases. Accountability rests with the Defense Logistics Agency to manage the contract effectively.
Related Government Programs
- Crude Petroleum and Natural Gas Extraction
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) clause introduces cost uncertainty.
- Potential for price volatility in the natural gas market.
- Limited visibility into specific performance metrics.
- Lack of small business participation data.
Tags
crude-petroleum-and-natural-gas-extracti, department-of-defense, nc, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.8 million to COLONIAL ENERGY INC. A-DIRECT SUPPLY OF NATURAL GAS
Who is the contractor on this award?
The obligated recipient is COLONIAL ENERGY INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $23.8 million.
What is the period of performance?
Start: 2010-10-01. End: 2012-09-30.
What was the actual price increase experienced due to the EPA clause over the contract period?
To determine the actual price increase from the EPA clause, one would need access to the contract's payment history and the specific indices used for adjustments. Comparing the final paid price per unit against the initial fixed price, adjusted for any non-EPA related changes, would reveal the impact. Without this granular data, assessing the precise financial effect on taxpayers is challenging.
How did the pricing compare to similar natural gas contracts awarded during the same period?
A comparative analysis would involve benchmarking the per-unit price of this contract against other government or commercial natural gas contracts of similar volume and duration awarded between 2010-2012. Factors like delivery location, contract type (fixed vs. EPA), and supplier would need to be controlled for. This would reveal if Colonial Energy Inc.'s pricing was competitive or if the EPA clause inflated costs relative to market norms.
What was the strategic importance of securing this specific natural gas supply contract for the DoD?
The strategic importance likely lies in ensuring a reliable and uninterrupted supply of natural gas to critical Department of Defense facilities, potentially for heating, power generation, or operational needs. Securing this supply through a competitive process, even with an EPA, demonstrates the agency's effort to balance cost-effectiveness with operational necessity and national security requirements.
Industry Classification
NAICS: Mining, Quarrying, and Oil and Gas Extraction › Oil and Gas Extraction › Crude Petroleum and Natural Gas Extraction
Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: SP060010R0402
Offers Received: 29
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Colonial Group, Inc. (UEI: 808376735)
Address: 3975 FAIR RIDGE DR STE N10, FAIRFAX, VA, 11
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,776,218
Exercised Options: $23,776,218
Current Obligation: $23,776,218
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060010D7512
IDV Type: IDC
Timeline
Start Date: 2010-10-01
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2010-11-08
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