DoD's $176M Turbine Fuel Contract Awarded to Petro Star Inc. Under Full and Open Competition

Contract Overview

Contract Amount: $176,128,614 ($176.1M)

Contractor: Petro Star Inc.

Awarding Agency: Department of Defense

Start Date: 2012-05-25

End Date: 2013-09-30

Contract Duration: 493 days

Daily Burn Rate: $357.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 10

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: TURBINE FUEL, AVIATION (JP4, JP5, JP8) SET-ASIDE QUANTITY: CLIN 0301 6,115,000 USG @ $2.654100/USG CLIN 0401 27,635,000 USG @ $2.646699/USG CLIN 0501 22,100,000 USG @ $2.744100/USG

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $176.1 million to PETRO STAR INC. for work described as: TURBINE FUEL, AVIATION (JP4, JP5, JP8) SET-ASIDE QUANTITY: CLIN 0301 6,115,000 USG @ $2.654100/USG CLIN 0401 27,635,000 USG @ $2.646699/USG CLIN 0501 22,100,000 USG @ $2.744100/USG Key points: 1. The contract for aviation turbine fuel (JP4, JP5, JP8) totals $176.1 million. 2. Petro Star Inc. is the sole awardee, indicating a concentrated market or specific capability. 3. The contract type is Fixed Price with Economic Price Adjustment, which can expose the government to price volatility. 4. The award was made under 'Full and Open Competition After Exclusion of Sources', suggesting a complex procurement process. 5. The set-aside quantity is significant, representing a substantial portion of the total award value.

Value Assessment

Rating: good

The average price per USG across the CLINs is approximately $2.68. This pricing needs to be benchmarked against current market rates for aviation turbine fuel to assess value.

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'. While full and open, the exclusion of sources implies a specific reason, potentially limiting the competitive pool and impacting price discovery.

Taxpayer Impact: The government secured a significant volume of critical fuel, but the economic price adjustment clause introduces potential for increased costs beyond initial projections.

Public Impact

Ensures supply of critical aviation fuel for military operations. Potential for price fluctuations due to economic price adjustment clause. Supports a key defense logistics requirement. Awardee's performance will be crucial for operational readiness. Transparency in the 'exclusion of sources' is important for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic Price Adjustment (EPA) clause can lead to cost overruns.
Exclusion of sources may limit competition and potentially inflate prices.
Dependence on a single supplier for a critical commodity.

Positive Signals

Secures a large quantity of essential aviation fuel.
Awarded under a competitive process, albeit with exclusions.
Defense Logistics Agency's role in ensuring supply chain continuity.

Sector Analysis

This contract falls within the energy sector, specifically the procurement of aviation fuels. Benchmarks for fuel procurement vary significantly based on global market conditions, geopolitical events, and contract terms like EPA.

Small Business Impact

The data indicates this contract was not set-aside for small businesses (sb: false). Therefore, there is no direct analysis of small business participation in this specific award.

Oversight & Accountability

The contract was awarded by the Defense Logistics Agency, a major procurement entity within the DoD. Oversight would typically involve contract performance monitoring, financial audits, and adherence to terms and conditions.

Related Government Programs

Administration of Air and Water Resource and Solid Waste Management Programs
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Price volatility due to Economic Price Adjustment.
Potential for reduced competition due to 'exclusion of sources'.
Dependence on a single awardee for a critical fuel supply.
Geopolitical risks impacting global fuel prices.
Contract performance risks associated with Petro Star Inc.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $176.1 million to PETRO STAR INC.. TURBINE FUEL, AVIATION (JP4, JP5, JP8) SET-ASIDE QUANTITY: CLIN 0301 6,115,000 USG @ $2.654100/USG CLIN 0401 27,635,000 USG @ $2.646699/USG CLIN 0501 22,100,000 USG @ $2.744100/USG

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 $176.1 million.

What is the period of performance?

Start: 2012-05-25. End: 2013-09-30.

What was the specific justification for excluding sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did it impact the final price?

The exclusion of sources typically occurs when only a limited number of responsible sources can fulfill the requirement due to factors like specialized technology, security requirements, or unique capabilities. This exclusion can reduce the number of bidders, potentially leading to higher prices than if a broader competition were possible. A detailed review of the contract file and justification documents would be needed to ascertain the specific reasons and their price impact.

How does the economic price adjustment (EPA) clause in this contract protect or expose the government to market volatility for turbine fuel?

The EPA clause is designed to allow for adjustments to the contract price based on fluctuations in specific economic indicators, such as the cost of raw materials or labor. While it can protect contractors from unforeseen cost increases, it exposes the government to potential price hikes if market conditions worsen. The effectiveness of the EPA in this contract depends on the specific indices used and the caps or limitations placed on price adjustments.

What is the historical performance of Petro Star Inc. on similar aviation fuel contracts with the DoD, and does it indicate a reliable supplier?

Assessing Petro Star Inc.'s historical performance on similar contracts is crucial for evaluating the effectiveness and reliability of this award. Past performance reviews, on-time delivery rates, quality control records, and any history of disputes or contract modifications would provide insight into their capabilities. A positive performance history would suggest a lower risk of supply disruption and better value for the government.

Industry Classification

NAICS: Public Administration › Administration of Environmental Quality Programs › Administration of Air and Water Resource and Solid Waste Management Programs

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: SP060011R0161

Offers Received: 10

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: $176,128,614

Exercised Options: $176,128,614

Current Obligation: $176,128,614

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060012D0479

IDV Type: IDC

Timeline