DoD's $94M Turbine Fuel Contract Awarded to Petro Star Inc. Amidst Full and Open Competition

Contract Overview

Contract Amount: $93,977,998 ($94.0M)

Contractor: Petro Star Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-30

End Date: 2012-06-29

Contract Duration: 273 days

Daily Burn Rate: $344.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 14

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: TURBINE FUEL, AVIATION (JP8)&TURBINE FUEL, AVIATION (JP4)

Place of Performance

Location: VALDEZ, VALDEZ-CORDOVA County, ALASKA, 99686

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $94.0 million to PETRO STAR INC. for work described as: TURBINE FUEL, AVIATION (JP8)&TURBINE FUEL, AVIATION (JP4) Key points: 1. Petro Star Inc. secured a significant contract for aviation turbine fuel. 2. The contract utilized full and open competition, suggesting a competitive bidding process. 3. The fixed-price with economic price adjustment structure introduces potential cost volatility. 4. Spending is concentrated within the Defense sector, specifically for aviation fuel.

Value Assessment

Rating: good

The contract value of $94M for a 9-month period appears reasonable given the nature of aviation fuel procurement. Benchmarking against similar large-scale 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 after exclusion of sources, indicating a robust process to solicit bids. This method generally promotes price discovery and competitive pricing.

Taxpayer Impact: The use of economic price adjustment introduces a risk of increased costs for taxpayers if fuel prices rise significantly during the contract period.

Public Impact

Ensures critical fuel supply for military aviation operations. Potential for price fluctuations impacts budget predictability. Competition aims to secure favorable pricing for the government.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns.
Dependence on a single supplier for a critical commodity.

Positive Signals

Awarded through full and open competition.
Contract supports essential defense logistics.

Sector Analysis

This contract falls within the energy sector, specifically petroleum refining and distribution. Defense logistics often require significant fuel procurement, and benchmarks for such contracts vary based on market conditions and contract duration.

Small Business Impact

The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The contract was awarded by the Defense Logistics Agency, a key component of DoD oversight for supply chain management. Monitoring the economic price adjustment clause is crucial for accountability.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Potential for cost escalation due to EPA.
Geographic concentration of awardee (Alaska).
Dependence on a single awarded vendor.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.0 million to PETRO STAR INC.. TURBINE FUEL, AVIATION (JP8)&TURBINE FUEL, AVIATION (JP4)

Who is the contractor on this award?

The obligated recipient is PETRO STAR INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $94.0 million.

What is the period of performance?

Start: 2011-09-30. End: 2012-06-29.

What was the specific basis for excluding other sources if the competition was 'full and open after exclusion of sources'?

The phrase 'full and open competition after exclusion of sources' typically implies that while the competition was open, certain specific sources were initially excluded based on predefined criteria or requirements. The exact reasons for exclusion would need to be detailed in the contract's justification and approval (J&A) document. This could be due to specialized capabilities, security clearances, or other unique qualifications not met by all potential bidders.

How does the economic price adjustment (EPA) mechanism function in this contract, and what are the potential risks to taxpayer cost?

The EPA clause allows for adjustments to the contract price based on fluctuations in specific economic factors, such as the cost of crude oil or refining inputs. While it can protect the contractor from unforeseen cost increases, it exposes taxpayers to the risk of paying higher prices if fuel markets rise. The specific indices and caps/floors within the EPA are critical to quantifying this risk.

What is the typical market price range for JP8 and JP4 fuel in Alaska during the contract period to assess value?

Determining the precise market price range for JP8 and JP4 in Alaska during 2011-2012 requires access to historical commodity price data and regional fuel market analyses. Factors like transportation costs to Alaska, seasonal demand, and global oil prices would influence this range. Without specific historical data, a direct comparison to the contract price is difficult, but general trends in oil prices during that period can offer some context.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060011R0708

Offers Received: 14

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Arctic Slope Regional Corporation (UEI: 076637073)

Address: 3900 C ST STE 802, ANCHORAGE, AK, 00

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Minority Owned Business, Native American Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $93,977,998

Exercised Options: $93,977,998

Current Obligation: $93,977,998

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060011D0525

IDV Type: IDC

Timeline