DoD's $20M Jet Fuel Contract with Trajen Flight Support: Fixed Price with Economic Adjustment
Contract Overview
Contract Amount: $19,980,421 ($20.0M)
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: $13.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 158
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: JET A W/FSII
Place of Performance
Location: EL PASO, EL PASO County, TEXAS, 79925
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $20.0 million to TRAJEN FLIGHT SUPPORT LP for work described as: JET A W/FSII Key points: 1. Contract awarded to Trajen Flight Support LP for Jet A fuel. 2. Full and open competition was utilized for this procurement. 3. The contract spans nearly four years with a total value of $19.98 million. 4. The sector is Petroleum and Petroleum Products Merchant Wholesalers. 5. This contract involves fixed-price with economic price adjustment terms.
Value Assessment
Rating: good
The contract value of $19.98 million over 1460 days suggests a reasonable annual spend. Benchmarking against similar fuel contracts would provide a more precise assessment of value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition indicates a robust price discovery process. The use of fixed price with economic price adjustment aims to balance cost control with market volatility.
Taxpayer Impact: Taxpayers benefit from competitive bidding, which generally leads to more favorable pricing, though economic adjustments introduce some risk.
Public Impact
Ensures availability of critical jet fuel for military operations. Supports aviation readiness and logistical capabilities. Economic price adjustment clause may impact final cost based on market fluctuations. Contract duration of nearly four years provides supply stability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment introduces potential for cost overruns.
- Dependence on a single supplier for a critical commodity.
Positive Signals
- Full and open competition.
- Long-term contract provides supply stability.
Sector Analysis
This contract falls within the Petroleum and Petroleum Products Merchant Wholesalers sector. Spending benchmarks for aviation fuel procurement can vary significantly based on volume, location, and market conditions.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors or prime contractors in this full and open competition.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, suggesting established oversight mechanisms. Monitoring the economic price adjustment clause is crucial for accountability.
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
- Potential for price volatility
- Dependence on specific supplier
- Lack of detailed cost breakdown
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 $20.0 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 $20.0 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 does it compare to market rates at the time?
Calculating the precise per-unit cost requires dividing the total contract value by the estimated quantity of fuel procured, which is not explicitly provided. However, with a total value of $19.98 million over 1460 days, the average annual spend was approximately $5.55 million. Comparing this to prevailing market rates for Jet A fuel during the 2011-2015 period would be necessary to assess cost-effectiveness.
What specific economic factors are included in the price adjustment clause, and what was the historical impact of these adjustments on the contract's total cost?
The specific economic factors driving the price adjustment are not detailed in the provided data. Typically, such clauses for fuel contracts are tied to indices like the U.S. Gulf Coast jet fuel price or other established market benchmarks. Analyzing historical price data and the frequency/magnitude of adjustments would reveal the actual impact on the contract's final cost and the degree of risk transferred to the government.
How effectively did the full and open competition process ensure the best value for the government, considering the economic price adjustment?
Full and open competition is designed to maximize value by encouraging multiple bids. While it likely secured a competitive base price, the economic price adjustment introduces variability. The effectiveness in ensuring 'best value' depends on how well the adjustment mechanism reflects true market changes without excessive government exposure to price spikes. A thorough post-award analysis of price trends versus contract adjustments would be needed.
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: $19,980,421
Exercised Options: $19,980,421
Current Obligation: $19,980,421
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D0125
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: 2011-09-14
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