DoD awards $53.6M for Jet A fuel, facing potential price volatility with economic adjustments
Contract Overview
Contract Amount: $53,613,430 ($53.6M)
Contractor: Trajen Flight Support LP
Awarding Agency: Department of Defense
Start Date: 2011-04-01
End Date: 2015-03-31
Contract Duration: 1,460 days
Daily Burn Rate: $36.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 158
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: JET A W/FSII
Place of Performance
Location: PLANO, COLLIN County, TEXAS, 75093
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $53.6 million to TRAJEN FLIGHT SUPPORT LP for work described as: JET A W/FSII Key points: 1. Significant contract value for aviation fuel, supporting military operations. 2. Competition was full and open, suggesting a competitive bidding process. 3. Economic price adjustment clause introduces risk of cost overruns. 4. Spending falls within the Petroleum Wholesalers sector.
Value Assessment
Rating: fair
The contract's fixed price with economic price adjustment makes direct comparison difficult. However, the total award value of $53.6M over four years suggests a substantial but potentially variable per-gallon cost.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was utilized, indicating multiple bidders participated. This method generally promotes price discovery, but the economic price adjustment clause may mitigate some of the cost savings.
Taxpayer Impact: Taxpayers are exposed to potential price increases due to the economic price adjustment clause, which is tied to market fluctuations.
Public Impact
Ensures availability of critical aviation fuel for military aircraft. Potential for increased fuel costs impacts overall defense budget. Supports businesses within the petroleum supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause
- Potential for fuel price spikes
- Long contract duration
Positive Signals
- Full and open competition
- Established supplier relationship
Sector Analysis
This contract falls under the Petroleum and Petroleum Products Merchant Wholesalers sector. Spending benchmarks for aviation fuel can vary significantly based on geopolitical factors and crude oil prices.
Small Business Impact
The contract does not indicate specific set-asides for small businesses. The prime contractor, TRAJEN FLIGHT SUPPORT LP, is not identified as a small business in the provided data.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a major procurement entity within the DoD. Oversight would typically involve contract performance monitoring and adherence to economic price adjustment terms.
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 Clause
- Fuel Price Volatility
- Potential for Cost Overruns
- Long-Term Contractual Obligation
Tags
petroleum-and-petroleum-products-merchan, department-of-defense, tx, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $53.6 million to TRAJEN FLIGHT SUPPORT LP. JET A W/FSII
Who is the contractor on this award?
The obligated recipient is TRAJEN FLIGHT SUPPORT LP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $53.6 million.
What is the period of performance?
Start: 2011-04-01. End: 2015-03-31.
What is the historical average price per gallon for Jet A fuel under similar economic adjustment clauses?
Determining the historical average price per gallon requires access to historical pricing data for this specific contract and comparable contracts. The economic price adjustment clause means the price fluctuates with market conditions, making a single average difficult to establish without detailed historical records of the adjustment factors applied.
What are the specific indices or benchmarks used for the economic price adjustment?
The specific indices or benchmarks used for the economic price adjustment are not detailed in the provided data. Typically, these adjustments are tied to published fuel price indices, such as those from the Energy Information Administration (EIA) or other industry-standard markers, to reflect changes in the cost of crude oil and refining.
What is the potential maximum price increase allowed under the economic price adjustment clause?
The provided data does not specify the maximum price increase allowed under the economic price adjustment clause. Contract terms usually define a cap or a formula for these adjustments to limit extreme price volatility and provide some predictability for the government's budget.
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: SP060010R0230
Offers Received: 158
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 6504 INTERNATIONAL PKWY STE 2400, PLANO, TX, 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: $53,613,430
Exercised Options: $53,613,430
Current Obligation: $53,613,430
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D0040
IDV Type: IDC
Timeline
Start Date: 2011-04-01
Current End Date: 2015-03-31
Potential End Date: 2015-03-31 00:00:00
Last Modified: 2011-03-22
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