DoD's $29.2M Jet Fuel Contract Awarded to ST-Airport Services Pte Ltd for 1094 Days

Contract Overview

Contract Amount: $29,244,052 ($29.2M)

Contractor: St-Airport Services PTE Ltd

Awarding Agency: Department of Defense

Start Date: 2012-10-01

End Date: 2015-09-30

Contract Duration: 1,094 days

Daily Burn Rate: $26.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 24

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: JET PETROLEUM 8

Plain-Language Summary

Department of Defense obligated $29.2 million to ST-AIRPORT SERVICES PTE LTD for work described as: JET PETROLEUM 8 Key points: 1. Contract value represents a significant investment in aviation fuel supply chain. 2. Competition dynamics suggest a potentially competitive bidding environment for this type of service. 3. Contract duration of nearly three years indicates a need for sustained fuel provision. 4. Fixed Price with Economic Price Adjustment (FPEPA) contract type aims to balance cost stability with market fluctuations. 5. The award to a single entity highlights the specialized nature of the services required. 6. Performance context is critical given the operational tempo of military aviation.

Value Assessment

Rating: fair

Benchmarking the value of this $29.2 million contract requires detailed analysis of fuel prices and delivery logistics during the award period (2012-2015). Without specific per-unit cost data or comparable contract values for similar fuel services at that time, a precise value-for-money assessment is challenging. The FPEPA clause introduces variability, making direct comparison to fixed-price contracts difficult. However, the scale of the award suggests a substantial operational requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The number of bids received (24) suggests a healthy level of interest and competition for this requirement. This broad competition is generally favorable for price discovery and potentially leads to more competitive pricing for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Military aviation operations are supported through the reliable supply of jet fuel. The contract ensures the readiness of aircraft and personnel for defense missions. Geographic impact is likely concentrated around the specific military installations served by the Defense Logistics Agency. Workforce implications may include logistics personnel, fuel handlers, and administrative staff involved in contract execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility due to the economic price adjustment clause.
Dependence on a single contractor for a critical fuel supply chain.
Ensuring consistent quality and timely delivery of fuel is paramount.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Contract duration suggests a stable and predictable supply chain was established.
The FPEPA clause can protect the government from extreme price spikes in volatile markets.

Sector Analysis

The aerospace and defense sector relies heavily on specialized logistics and supply chain management for critical resources like jet fuel. This contract falls within the broader defense logistics and fuel services market, which is characterized by significant government spending and a need for reliable, often geographically dispersed, delivery capabilities. Comparable spending benchmarks would involve analyzing other fuel supply contracts awarded by the DoD and other federal agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the nature of large-scale fuel procurement and distribution, it is possible that prime contractors may engage small businesses for subcontracting opportunities, but this is not explicitly detailed in the award information. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA), which is responsible for ensuring contract compliance, performance, and financial accountability. Mechanisms likely include regular performance reviews, audits, and adherence to reporting requirements stipulated in the contract. Transparency is generally maintained through contract award databases and reporting.

Related Government Programs

Defense Logistics Agency Fuel Contracts
Military Aviation Fuel Supply
Petroleum Product Procurement
Fixed Price with Economic Price Adjustment Contracts

Risk Flags

Potential for price escalation due to economic price adjustment clause.
Dependence on a single contractor for a critical supply chain.
Ensuring consistent fuel quality and timely delivery is paramount for operational readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.2 million to ST-AIRPORT SERVICES PTE LTD. JET PETROLEUM 8

Who is the contractor on this award?

The obligated recipient is ST-AIRPORT SERVICES PTE LTD.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.2 million.

What is the period of performance?

Start: 2012-10-01. End: 2015-09-30.

What was the historical spending pattern for jet fuel by the Defense Logistics Agency prior to and following this contract award?

Analyzing historical spending patterns for jet fuel by the Defense Logistics Agency (DLA) prior to and following the 2012-2015 contract award to ST-AIRPORT SERVICES PTE LTD would provide crucial context. Prior to this award, DLA likely had existing contracts for fuel supply, potentially with different contractors or under different contract types. Examining these past expenditures would reveal trends in volume, pricing, and supplier diversity. Following this contract, DLA would have continued to procure jet fuel, and comparing the spending during the ST-AIRPORT SERVICES contract period to both preceding and succeeding periods would highlight any significant shifts in cost, quantity, or market dynamics. This comparison is essential for understanding if the $29.2 million awarded represented an increase or decrease in spending, and whether the FPEPA clause resulted in costs significantly different from fixed-price contracts during the same timeframe. Such analysis helps in assessing the overall efficiency and cost-effectiveness of DLA's fuel procurement strategies over time.

How did the economic price adjustment (EPA) clause impact the final cost of the jet fuel compared to a fixed-price contract during the 2012-2015 period?

The impact of the economic price adjustment (EPA) clause on the final cost of jet fuel under this contract (2012-2015) is a key area for analysis. The EPA allows for adjustments to the contract price based on fluctuations in specific economic indicators, often tied to commodity prices like crude oil or refined fuel products. To assess its impact, one would need to compare the actual price paid per unit of fuel with what would have been paid under a hypothetical fixed-price contract. This requires tracking the relevant economic indices used in the EPA formula and the contract's base price. If fuel prices were volatile during this period, the EPA could have either protected the government from significant price increases or resulted in higher costs than a fixed-price agreement if prices decreased. Without access to the specific indices and the contractor's cost data, a precise comparison is difficult, but understanding the market conditions for jet fuel between 2012 and 2015 is crucial for inferring the likely effect of the EPA.

What is the track record of ST-AIRPORT SERVICES PTE LTD in fulfilling large-scale government fuel supply contracts?

Evaluating the track record of ST-AIRPORT SERVICES PTE LTD in fulfilling large-scale government fuel supply contracts is essential for understanding their reliability and performance. This involves reviewing past performance evaluations, any documented instances of contract deficiencies, timely delivery records, and adherence to quality standards for fuel provision. Information on previous contracts, including their value, duration, and the agencies involved, would provide a comprehensive view. A positive track record would indicate a lower risk associated with this contractor, suggesting a higher likelihood of successful contract execution. Conversely, any history of significant performance issues, disputes, or contract terminations would raise concerns about their capability to meet the demands of this specific DoD contract. Publicly available contract databases and performance rating systems (like the Contractor Performance Assessment Reporting System - CPARS, if applicable) are primary sources for this information.

How does the number of bidders (24) for this 'full and open competition' contract compare to similar jet fuel procurements by the DoD?

The fact that 24 bids were received for this 'full and open competition' contract provides a strong indicator of the market's competitiveness for jet fuel supply. To contextualize this number, it's necessary to compare it with the typical number of bids received for similar jet fuel procurements by the Department of Defense (DoD). If 24 bids is significantly higher than the average, it suggests a particularly attractive or accessible market for this specific requirement, potentially leading to more favorable pricing. Conversely, if 24 bids is within the normal range, it indicates a standard level of competition. Analyzing bid counts for comparable contracts, considering factors like geographic scope, volume, and contract duration, allows for an assessment of whether the competition level was exceptional, average, or low, which directly impacts the government's ability to secure competitive pricing and optimal terms.

What are the primary risks associated with a fixed-price contract with economic price adjustment for critical fuel supplies?

A primary risk associated with a Fixed Price with Economic Price Adjustment (FPEPA) contract for critical fuel supplies is price volatility. While the EPA is designed to mitigate extreme price swings, it introduces uncertainty for both the government and the contractor. For the government, the risk is that the economic adjustments could lead to higher overall costs than a firm fixed-price contract, especially if market prices trend upwards significantly during the contract period. Conversely, if prices fall, the government might not fully benefit from the lower market rates if the adjustment formula is not sufficiently responsive. Another risk involves the complexity of administering the EPA clause, requiring careful monitoring of economic indices and accurate calculation of price adjustments, which can increase administrative burden and potential for disputes. Ensuring the chosen economic indicators accurately reflect the actual cost drivers for jet fuel is also critical to prevent unintended cost escalations or reductions.

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: SP060012R0203

Offers Received: 24

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Toll Holdings Limited (UEI: 753741792)

Address: 3 CLEMENTI LOOP, SINGAPORE

Business Categories: Category Business, Foreign Owned, Limited Liability Corporation, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $29,244,052

Exercised Options: $29,244,052

Current Obligation: $29,244,052

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060012D0046

IDV Type: IDC

Timeline