DoD awards $89.3M for JP-8 fuel to ExxonMobil under full and open competition
Contract Overview
Contract Amount: $89,332,784 ($89.3M)
Contractor: Exxon Mobil Corporation
Awarding Agency: Department of Defense
Start Date: 2011-05-12
End Date: 2012-03-01
Contract Duration: 294 days
Daily Burn Rate: $303.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 25
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: TURBINE FUEL, AVIATION JP-8 SOLICITATION SP0600-10-R-0061-0001.
Place of Performance
Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22037
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $89.3 million to EXXON MOBIL CORPORATION for work described as: TURBINE FUEL, AVIATION JP-8 SOLICITATION SP0600-10-R-0061-0001. Key points: 1. The contract value is substantial at $89.3 million. 2. ExxonMobil is a major player in the energy sector. 3. The contract type (fixed price with economic price adjustment) carries some price fluctuation risk. 4. Spending is within the Defense Logistics Agency's operational scope.
Value Assessment
Rating: good
The contract value of $89.3 million for aviation fuel appears reasonable given the quantity and duration. Benchmarking against similar large-scale fuel procurements 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, suggesting a competitive bidding process that should drive favorable pricing. The fixed-price with economic price adjustment structure allows for market fluctuations.
Taxpayer Impact: Competition generally leads to better value for taxpayers by ensuring fair pricing. The economic price adjustment clause, however, introduces potential for cost increases tied to market volatility.
Public Impact
Ensures supply of critical aviation fuel for military operations. Supports a major energy corporation, potentially impacting fuel market stability. Taxpayers benefit from competitive bidding, though economic adjustments warrant monitoring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may increase costs.
- Contract duration is relatively short, requiring future procurements.
- No small business participation noted.
Positive Signals
- Awarded under full and open competition.
- Procurement by Defense Logistics Agency ensures operational readiness.
- Contract awarded to a well-established supplier.
Sector Analysis
This contract falls under the Petroleum Refineries sector (NAICS 324110). The Department of Defense is a significant consumer of petroleum products, and spending in this area is crucial for operational readiness. Benchmarks for similar fuel contracts would be necessary for a detailed comparison.
Small Business Impact
The data indicates that this contract was not awarded to small businesses (ss: false, sb: false). This is common for large-scale, specialized procurements like aviation fuel, but it means small businesses did not directly benefit from this specific award.
Oversight & Accountability
The Defense Logistics Agency is responsible for managing and executing contracts for the Department of Defense. Oversight would involve monitoring contract performance, adherence to terms, and managing the economic price adjustment clause to ensure fair pricing.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic price adjustment may lead to cost overruns.
- Lack of small business participation.
- Dependence on a single large supplier for a critical commodity.
- Short contract duration necessitates future procurement efforts.
Tags
petroleum-refineries, department-of-defense, va, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $89.3 million to EXXON MOBIL CORPORATION. TURBINE FUEL, AVIATION JP-8 SOLICITATION SP0600-10-R-0061-0001.
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 $89.3 million.
What is the period of performance?
Start: 2011-05-12. End: 2012-03-01.
What is the typical price range for JP-8 fuel per gallon under similar government contracts?
Determining the exact price range requires access to historical contract data and market analysis. However, government fuel contracts often include economic price adjustment clauses to account for market volatility. The specific price per gallon would depend on factors like volume, delivery location, and prevailing market conditions at the time of award and during the contract period.
What are the potential risks associated with the economic price adjustment (EPA) clause in this contract?
The primary risk of an EPA clause is that it allows the contractor to pass on increased costs of raw materials (like crude oil) to the government. This can lead to higher-than-anticipated spending for the DoD, especially during periods of significant oil price spikes. Effective oversight is needed to ensure the adjustments are calculated correctly and reflect legitimate market changes.
How does this contract contribute to the overall effectiveness of military aviation operations?
This contract is critical for ensuring the consistent availability of JP-8, a key fuel for military aircraft. By securing a large supply through a major provider like ExxonMobil, the Department of Defense can maintain operational readiness and execute missions without fuel shortages. The competitive award process aims to ensure this vital resource is procured efficiently.
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: SP060010R0061
Offers Received: 25
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: $89,332,784
Exercised Options: $89,332,784
Current Obligation: $89,332,784
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D0496
IDV Type: IDC
Timeline
Start Date: 2011-05-12
Current End Date: 2012-03-01
Potential End Date: 2012-03-01 00:00:00
Last Modified: 2012-02-22
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