DoD's $38.4M Jet Fuel Contract with Signature Flight Support Faces Scrutiny Over Pricing and Competition
Contract Overview
Contract Amount: $38,374,395 ($38.4M)
Contractor: Signature Flight Support LLC
Awarding Agency: Department of Defense
Start Date: 2011-04-01
End Date: 2015-03-31
Contract Duration: 1,460 days
Daily Burn Rate: $26.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 158
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: JET A W/0 FSII JET A W/FSII JET PETROLEUM 8
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77034
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $38.4 million to SIGNATURE FLIGHT SUPPORT LLC for work described as: JET A W/0 FSII JET A W/FSII JET PETROLEUM 8 Key points: 1. The contract awarded to Signature Flight Support LLC for jet fuel represents a significant expenditure within the Defense Logistics Agency. 2. While awarded under full and open competition, the fixed-price with economic price adjustment structure warrants close examination for potential cost overruns. 3. The petroleum wholesale sector is generally competitive, but specific fuel types and delivery locations can influence market dynamics. 4. Potential risks include fluctuating fuel prices impacting the economic price adjustment and ensuring consistent supply chain integrity.
Value Assessment
Rating: fair
The contract's total value of $38.4 million over four years suggests a substantial but not necessarily excessive price point for bulk jet fuel. Benchmarking against similar DoD fuel contracts would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating multiple bids were solicited. However, the fixed-price with economic price adjustment (EPA) clause allows for price changes based on market fluctuations, which could impact the final cost discovered through competition.
Taxpayer Impact: The use of EPA introduces a risk of higher taxpayer costs if fuel prices rise significantly beyond initial projections.
Public Impact
Military readiness depends on reliable access to aviation fuel, impacting operational capabilities. Fluctuations in global oil markets directly affect the cost of this contract and, consequently, taxpayer burden. The economic price adjustment mechanism requires careful monitoring to prevent unwarranted price increases. Ensuring fair competition in the procurement of essential defense resources is crucial for fiscal responsibility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) risk
- Potential for price volatility
- Limited insight into specific fuel quality and delivery efficiency
Positive Signals
- Awarded under Full and Open Competition
- Established supplier relationship for defense logistics
Sector Analysis
This contract falls within the Petroleum and Petroleum Products Merchant Wholesalers sector. Spending in this area is critical for national defense logistics, with benchmarks often tied to global commodity prices and strategic reserve management.
Small Business Impact
There is no indication that small businesses were involved in this specific contract, either as prime contractors or significant subcontractors. Future solicitations could explore opportunities for small business participation in fuel supply chains.
Oversight & Accountability
The Defense Logistics Agency is responsible for managing this contract. Oversight would involve monitoring contract performance, ensuring compliance with terms, and managing the economic price adjustment clauses to safeguard taxpayer funds.
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) could lead to cost overruns.
- Potential for price volatility in the petroleum market.
- Lack of specific performance metrics for fuel quality and delivery timeliness.
- Limited visibility into the supply chain beyond the prime contractor.
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 $38.4 million to SIGNATURE FLIGHT SUPPORT LLC. JET A W/0 FSII JET A W/FSII JET PETROLEUM 8
Who is the contractor on this award?
The obligated recipient is SIGNATURE FLIGHT SUPPORT LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $38.4 million.
What is the period of performance?
Start: 2011-04-01. End: 2015-03-31.
What is the historical performance of Signature Flight Support LLC in fulfilling similar fuel contracts for the DoD?
Assessing Signature Flight Support's past performance is crucial for understanding their reliability and efficiency in delivering jet fuel under demanding military conditions. Reviewing previous contract fulfillment rates, any documented issues, and their responsiveness to logistical challenges would provide valuable insight into their capabilities and mitigate potential risks associated with this current contract.
How does the economic price adjustment (EPA) clause in this contract compare to industry standards for jet fuel procurement?
The specific parameters and triggers for the EPA in this contract need to be benchmarked against typical clauses used in the commercial and government sectors for jet fuel. Understanding if the adjustment is tied to widely recognized indices and if there are caps or floors on price changes will reveal the extent to which it protects against excessive cost increases for taxpayers.
What mechanisms are in place to ensure the quality and timely delivery of JET A fuel under this contract?
Ensuring the consistent quality and punctual delivery of JET A fuel is paramount for aviation operations. The contract should outline specific quality control measures, testing protocols, and delivery schedules. Oversight mechanisms should verify adherence to these standards, with clear procedures for addressing any deviations or failures to meet contractual obligations.
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
Parent Company: Global FBO Holdings Inc (UEI: 112325753)
Address: 11811 N BRANTLY AVE, HOUSTON, TX, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $38,374,395
Exercised Options: $38,374,395
Current Obligation: $38,374,395
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D0057
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: 2014-06-10
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