DoD Awards $26.3M Contract to Calumet Montana Refining for Petroleum Products

Contract Overview

Contract Amount: $26,268,697 ($26.3M)

Contractor: Calumet Montana Refining, LLC

Awarding Agency: Department of Defense

Start Date: 2012-05-25

End Date: 2013-06-30

Contract Duration: 401 days

Daily Burn Rate: $65.5K/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: Defense

Official Description: CONTRACT AWARD FOR MONTANA UNDER RMW (SP0600-11-R-0161). SET ASIDES PER CLIN ARE BELOW. CLIN 0101 4,256,250 USG CLIN 0201 3,225,000 USG CLIN 0301 225,000 USG

Place of Performance

Location: GREAT FALLS, CASCADE County, MONTANA, 59404

State: Montana Government Spending

Plain-Language Summary

Department of Defense obligated $26.3 million to CALUMET MONTANA REFINING, LLC for work described as: CONTRACT AWARD FOR MONTANA UNDER RMW (SP0600-11-R-0161). SET ASIDES PER CLIN ARE BELOW. CLIN 0101 4,256,250 USG CLIN 0201 3,225,000 USG CLIN 0301 225,000 USG Key points: 1. Contract awarded to Calumet Montana Refining, LLC for petroleum products. 2. The contract value is $26,268,697.25. 3. Competition method was 'Full and Open Competition after Exclusion of Sources'. 4. The sector is Defense, specifically petroleum refining. 5. This award represents a significant expenditure within the Defense Logistics Agency's procurement activities.

Value Assessment

Rating: fair

The contract value of $26.3 million for petroleum products appears within a reasonable range for bulk fuel procurement. However, without specific volume and grade details, a precise per-unit cost comparison is difficult.

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 competitive process was intended. The exclusion of specific sources may have limited the breadth of competition, potentially impacting price discovery.

Taxpayer Impact: Taxpayers are impacted through the funding of this significant defense procurement. The effectiveness of the competition method in securing the best value for taxpayer dollars is a key consideration.

Public Impact

Ensures supply of essential petroleum products for Department of Defense operations. Supports a specific refining company, Calumet Montana Refining, LLC. The contract duration spans over a year, indicating ongoing operational needs. Geographic location of award is Montana, potentially impacting regional economic activity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to source exclusion.
Economic price adjustment clause could lead to cost fluctuations.
Contract duration and value warrant close monitoring for performance and cost control.

Positive Signals

Awarded under a competitive process.
Addresses a critical need for petroleum products.
Clear contract start and end dates are defined.

Sector Analysis

This contract falls within the Defense sector, specifically related to the procurement of refined petroleum products. Spending benchmarks for such commodities can vary widely based on market conditions, geopolitical factors, and specific product requirements.

Small Business Impact

The awardee, Calumet Montana Refining, LLC, is not identified as a small business. Therefore, this contract does not appear to directly support small business set-aside goals.

Oversight & Accountability

The Department of Defense, through the Defense Logistics Agency, is responsible for overseeing this contract. Standard oversight mechanisms for contract performance, quality assurance, and financial management would apply.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Potential for price increases due to economic price adjustment.
Limited competition due to source exclusion.
Dependence on a single awardee for a critical commodity.
Contract performance monitoring is essential to ensure quality and timely delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to CALUMET MONTANA REFINING, LLC. CONTRACT AWARD FOR MONTANA UNDER RMW (SP0600-11-R-0161). SET ASIDES PER CLIN ARE BELOW. CLIN 0101 4,256,250 USG CLIN 0201 3,225,000 USG CLIN 0301 225,000 USG

Who is the contractor on this award?

The obligated recipient is CALUMET MONTANA REFINING, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.3 million.

What is the period of performance?

Start: 2012-05-25. End: 2013-06-30.

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

The rationale for excluding sources typically relates to specific technical requirements, existing relationships, or national security considerations. Understanding this exclusion is crucial to assessing whether the competition truly yielded the best possible price for the government. Without this information, it's difficult to definitively state if the price achieved was optimal or if a broader competition could have resulted in savings.

How does the 'Fixed Price with Economic Price Adjustment' clause affect the overall risk to the government regarding cost overruns for petroleum products?

The 'Fixed Price with Economic Price Adjustment' (FPEPA) clause allows for adjustments to the contract price based on fluctuations in specific economic indicators, often related to raw material costs or inflation. While it can protect the contractor from unforeseen market volatility, it introduces cost risk for the government, as the final price could be higher than initially anticipated if those economic indicators rise significantly.

What is the strategic importance of this petroleum contract for the Department of Defense's operations in the specified region or for the duration of the contract?

Petroleum products are fundamental to military operations, powering vehicles, aircraft, and equipment. This contract ensures the availability of these critical resources, supporting readiness and operational capability. Its strategic importance lies in guaranteeing the supply chain for fuel, which is essential for mission accomplishment and maintaining a consistent level of preparedness for the DoD.

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: SP060011R0161

Offers Received: 10

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Calumet Specialty Products Partners LP (UEI: 617527713)

Address: 1900 10TH ST N E, GREAT FALLS, MT, 02

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,268,697

Exercised Options: $26,268,697

Current Obligation: $26,268,697

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060012D0554

IDV Type: IDC

Timeline