DoD's $50.7M Naval Distillate Contract Awarded to ExxonMobil Amidst Full and Open Competition
Contract Overview
Contract Amount: $50,663,933 ($50.7M)
Contractor: Exxon Mobil Corporation
Awarding Agency: Department of Defense
Start Date: 2010-12-17
End Date: 2011-10-30
Contract Duration: 317 days
Daily Burn Rate: $159.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 20
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: NAVAL DISTILLATE, F76, FOB ORIGIN PIPELINE EX TORRANCE, CA
Place of Performance
Location: TORRANCE, LOS ANGELES County, CALIFORNIA, 90504
Plain-Language Summary
Department of Defense obligated $50.7 million to EXXON MOBIL CORPORATION for work described as: NAVAL DISTILLATE, F76, FOB ORIGIN PIPELINE EX TORRANCE, CA Key points: 1. The contract for F76 naval distillate fuel was awarded to ExxonMobil Corporation for $50.7 million. 2. Competition was full and open, suggesting a competitive bidding process. 3. The contract type is Fixed Price with Economic Price Adjustment, which can introduce price volatility. 4. The sector is primarily Defense Logistics, with a specific NAICS code of 324110 (Petroleum Refineries).
Value Assessment
Rating: good
The contract value of $50.7 million for naval distillate fuel appears reasonable given the commodity and the fixed-price with economic adjustment structure. Benchmarking against similar fuel contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes price discovery and competitive pricing.
Taxpayer Impact: The use of full and open competition is positive for taxpayers, as it aims to secure the best possible price through market forces.
Public Impact
Ensures a critical fuel supply for naval operations. Supports the energy sector and related industries. Potential for price fluctuations due to economic price adjustment clauses.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment may lead to costs exceeding initial estimates.
- Dependence on a single supplier for a critical commodity.
Positive Signals
- Awarded under full and open competition.
- Supports essential defense logistics.
Sector Analysis
This contract falls within the Petroleum Refineries sector (NAICS 324110), which is crucial for national defense and energy security. Spending in this sector can be volatile due to global commodity prices and geopolitical factors.
Small Business Impact
The data does not indicate any specific involvement or benefit for small businesses in this particular contract award. Further analysis would be needed to determine if small businesses were subcontractors or otherwise engaged.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a key agency responsible for managing the supply chain for the U.S. military. Oversight would focus on contract performance, delivery, and adherence to pricing adjustments.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) clause introduces cost uncertainty.
- Potential for supply chain disruption with a single supplier.
- Dependence on volatile global fuel commodity markets.
- Lack of specific small business participation data.
Tags
petroleum-refineries, department-of-defense, ca, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $50.7 million to EXXON MOBIL CORPORATION. NAVAL DISTILLATE, F76, FOB ORIGIN PIPELINE EX TORRANCE, CA
Who is the contractor on this award?
The obligated recipient is EXXON MOBIL CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $50.7 million.
What is the period of performance?
Start: 2010-12-17. End: 2011-10-30.
What is the historical price trend for F76 fuel and how might the economic price adjustment clause impact the final cost compared to a fixed-price contract?
Historical price trends for F76 fuel are influenced by global crude oil markets and refining costs. The economic price adjustment (EPA) clause allows for price changes based on pre-defined indices, typically related to fuel costs. This can protect the contractor from rising prices but may lead to the government paying more than initially anticipated if fuel prices increase significantly. A fixed-price contract would have locked in the price, potentially offering more cost certainty but also carrying higher risk for the contractor if prices rose unexpectedly.
Given the full and open competition, what was the range of bids received, and how does ExxonMobil's award price compare to the lowest bid?
The provided data indicates the contract was awarded under full and open competition, suggesting multiple bids were likely submitted. However, specific bid details, including the range of bids and the lowest bid amount, are not included in this dataset. To fully assess the value and competitive nature of the award, a comparison of ExxonMobil's price against the other bids would be necessary. This information is typically available through contract award databases or agency procurement reports.
What are the potential risks associated with relying on a single supplier, even with competitive bidding, for a critical fuel commodity like naval distillate?
Relying on a single supplier, even one selected through competitive bidding, carries inherent risks. These include potential supply chain disruptions due to unforeseen events affecting the supplier (e.g., natural disasters, labor disputes, geopolitical issues), potential for price manipulation if competition weakens over time, and reduced leverage for the government in future negotiations. Diversifying suppliers or establishing strategic reserves can mitigate some of these risks.
Industry Classification
NAICS: Manufacturing › Petroleum and Coal Products Manufacturing › Petroleum Refineries
Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: SP060010R0161
Offers Received: 20
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 3225 GALLOWS RD, FAIRFAX, VA, 11
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $50,663,933
Exercised Options: $50,663,933
Current Obligation: $50,663,933
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D0465
IDV Type: IDC
Timeline
Start Date: 2010-12-17
Current End Date: 2011-10-30
Potential End Date: 2011-10-30 00:00:00
Last Modified: 2011-01-05
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