DoD's $18.7M JET A fuel contract with Freeman Holdings faced full and open competition
Contract Overview
Contract Amount: $18,702,328 ($18.7M)
Contractor: Freeman Holdings of Louisiana LLC
Awarding Agency: Department of Defense
Start Date: 2011-04-01
End Date: 2015-03-31
Contract Duration: 1,460 days
Daily Burn Rate: $12.8K/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: LAKE CHARLES, CALCASIEU County, LOUISIANA, 70615
Plain-Language Summary
Department of Defense obligated $18.7 million to FREEMAN HOLDINGS OF LOUISIANA LLC for work described as: JET A W/ FSII Key points: 1. Contract awarded to Freeman Holdings of Louisiana LLC for JET A fuel. 2. Totaling $18.7 million, the contract spanned nearly four years. 3. The procurement utilized full and open competition. 4. The sector is Petroleum and Petroleum Products Merchant Wholesalers. 5. The contract type was Fixed Price with Economic Price Adjustment.
Value Assessment
Rating: good
The contract's fixed price with economic price adjustment (FPEPA) structure aims to mitigate fuel price volatility. Benchmarking against similar fuel contracts is difficult without specific unit pricing, but the total value appears reasonable for the duration and quantity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was utilized, suggesting a robust price discovery process. This method allows multiple qualified vendors to bid, typically leading to competitive pricing.
Taxpayer Impact: The competitive nature of the award likely resulted in a fair market price, minimizing unnecessary taxpayer expenditure.
Public Impact
Ensures consistent fuel supply for military operations. Supports the economic activity of fuel suppliers. Price adjustments could impact budget predictability. Geographic concentration in Louisiana may limit broader economic impact.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment introduces potential for cost overruns if fuel prices spike significantly.
- Limited information on specific performance metrics or quality control.
- Sole geographic location of the awardee could be a logistical consideration.
Positive Signals
- Full and open competition suggests a competitive award.
- Contract duration provided stability for both parties.
- Fixed price element offers some cost certainty.
Sector Analysis
The petroleum and petroleum products wholesale sector is critical for national infrastructure and defense. Spending benchmarks for JET A fuel can vary significantly based on market conditions, volume, and delivery requirements.
Small Business Impact
The awardee, Freeman Holdings of Louisiana LLC, is not identified as a small business. The contract's scale suggests larger prime contractors are typically involved in such procurements, though subcontractors could include small businesses.
Oversight & Accountability
The Department of Defense and Defense Logistics Agency are responsible for oversight. Standard contract management processes should ensure compliance and performance, but specific oversight details are not provided.
Related Government Programs
- Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Lack of detailed unit pricing for benchmarking.
- Geographic concentration of awardee.
- Limited insight into performance metrics.
Tags
petroleum-and-petroleum-products-merchan, department-of-defense, la, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.7 million to FREEMAN HOLDINGS OF LOUISIANA LLC. JET A W/ FSII
Who is the contractor on this award?
The obligated recipient is FREEMAN HOLDINGS OF LOUISIANA LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $18.7 million.
What is the period of performance?
Start: 2011-04-01. End: 2015-03-31.
What was the average per-unit cost of JET A fuel under this contract, and how did it compare to market rates at the time?
The provided data does not include the average per-unit cost or specific quantities, making direct comparison to market rates impossible. The total contract value of $18.7 million over 1460 days suggests an average annual spend of approximately $12.8 million. Without unit pricing, assessing value against market benchmarks remains speculative.
What were the primary risks associated with the Fixed Price with Economic Price Adjustment (FPEPA) contract type for this fuel procurement?
The primary risk of an FPEPA contract for fuel is the potential for significant cost increases if market prices for JET A surge unexpectedly. While the fixed component offers some stability, the economic adjustment clause exposes the government to price volatility, impacting budget predictability and potentially leading to higher-than-anticipated expenditures.
How effectively did the full and open competition process ensure optimal value and mitigate risks for this substantial fuel purchase?
Full and open competition is generally effective in driving value by encouraging multiple bids and fostering price discovery. For this $18.7 million contract, it likely led to a competitive award. However, the FPEPA structure introduces inherent price risk that competition alone cannot eliminate, requiring ongoing monitoring of market conditions.
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: 4500 CHENNAULT PKWY, LAKE CHARLES, LA, 03
Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $18,702,328
Exercised Options: $18,702,328
Current Obligation: $18,702,328
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D0118
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: 2011-05-11
More Contracts from Freeman Holdings of Louisiana LLC
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