DoD's $23.7M contract for fuel in Honduras awarded to C A M INTERNATIONAL USA, INC

Contract Overview

Contract Amount: $23,737,680 ($23.7M)

Contractor: C a M International USA, Inc

Awarding Agency: Department of Defense

Start Date: 2011-12-19

End Date: 2014-12-31

Contract Duration: 1,108 days

Daily Burn Rate: $21.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: DIESEL FUEL AND REGULAR UNLEADED GASOLINE FOR VARIOUS LOCATIONS IN HONDURAS

Place of Performance

Location: LAWRENCEVILLE, GWINNETT County, GEORGIA, 30043

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to C A M INTERNATIONAL USA, INC for work described as: DIESEL FUEL AND REGULAR UNLEADED GASOLINE FOR VARIOUS LOCATIONS IN HONDURAS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1108 days indicates a long-term need for fuel supply. 3. Fixed Price with Economic Price Adjustment (FP-EPA) contract type introduces potential for cost fluctuations. 4. The award was made under the 'GA' (Georgia) state, which may relate to contractor location or administrative oversight. 5. The North American Industry Classification System (NAICS) code 324110 points to petroleum refineries as the relevant industry. 6. The contract was awarded by the Defense Logistics Agency (DLA), a key provider of logistics support to the U.S. military.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific per-unit pricing data or comparable contracts for fuel in Honduras. The total award amount of $23.7 million over approximately three years suggests a significant but potentially variable cost depending on fuel market fluctuations due to the economic price adjustment clause. Further analysis would require comparing the effective per-gallon price against regional benchmarks and historical DLA fuel procurement costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of two bids (no: 2) suggests a moderate level of competition for this specific requirement. While competition is generally positive, a low number of bidders could indicate market limitations or specific requirements that narrowed the field.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible price through a bidding process. However, with only two bids received, the ultimate cost savings for taxpayers may have been constrained compared to a scenario with more robust competition.

Public Impact

U.S. military operations and personnel stationed in Honduras benefit from a reliable supply of diesel fuel and gasoline. The contract ensures the availability of essential fuel for transportation and operational needs of the DoD in the region. Geographic impact is concentrated in various locations within Honduras where DoD assets are deployed. The contract supports the logistics and supply chain infrastructure necessary for maintaining U.S. military presence and readiness in Central America.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause introduces uncertainty in final costs.
Limited competition (2 bidders) may have restricted price optimization.
Contract duration of over three years could expose the government to long-term price volatility.

Positive Signals

Awarded through full and open competition, adhering to procurement best practices.
Defense Logistics Agency's involvement suggests established procurement processes for essential supplies.
Contract ensures critical fuel supply for military operations in a strategic region.

Sector Analysis

This contract falls within the petroleum products and distribution sector, specifically focusing on fuel supply for government operations. The market for such services in a foreign country like Honduras is influenced by global oil prices, local distribution capabilities, and geopolitical factors. The Defense Logistics Agency (DLA) is a major procurer of fuel for the U.S. military worldwide, managing complex supply chains to ensure operational readiness.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a full and open competition, it is unlikely that small businesses were exclusively targeted, though they could have participated if they met the requirements. Subcontracting opportunities for small businesses are not explicitly detailed but would depend on the prime contractor's strategy.

Oversight & Accountability

The Defense Logistics Agency (DLA) is responsible for the oversight of this contract. As a fixed-price contract with economic price adjustment, DLA would monitor fuel price indices to manage the adjustments. Accountability is maintained through contract terms and performance monitoring. Transparency is generally provided through contract award databases, though detailed performance metrics may not be publicly available.

Related Government Programs

Defense Logistics Agency Fuel Procurement
DoD Overseas Fuel Contracts
Petroleum Product Supply Contracts
Logistics Support for Military Operations

Risk Flags

Potential for cost overruns due to economic price adjustment.
Limited competition may have resulted in suboptimal pricing.
Geopolitical or logistical risks in Honduras could impact performance.
Contract duration extends over multiple years, increasing exposure to market volatility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to C A M INTERNATIONAL USA, INC. DIESEL FUEL AND REGULAR UNLEADED GASOLINE FOR VARIOUS LOCATIONS IN HONDURAS

Who is the contractor on this award?

The obligated recipient is C A M INTERNATIONAL USA, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.7 million.

What is the period of performance?

Start: 2011-12-19. End: 2014-12-31.

What was the historical spending pattern for fuel in Honduras by the Department of Defense prior to this contract?

Analyzing historical spending patterns for fuel in Honduras by the Department of Defense prior to this specific contract (awarded in late 2011) would require access to detailed procurement data from the Defense Logistics Agency (DLA) or other relevant DoD components. Generally, the DoD procures fuel in regions where its personnel and assets are deployed. Spending levels would fluctuate based on the number of personnel, operational tempo, and prevailing fuel prices. Without specific historical data for Honduras, it's difficult to establish a baseline. However, the DLA manages a vast global fuel supply chain, and contracts for regions like Central America are part of a broader strategy to ensure logistical support for U.S. interests and operations in the area. The award of a multi-year contract suggests a recognized and sustained need for fuel in the region.

How does the per-unit cost of fuel under this contract compare to other DLA fuel contracts in similar regions?

Direct comparison of per-unit costs for this contract is difficult without access to the specific economic price adjustment indices and the actual prices paid throughout the contract's life. The contract type (Fixed Price with Economic Price Adjustment - FP-EPA) means the base price is adjusted based on fluctuations in specified fuel price indices. To benchmark effectively, one would need to compare the adjusted per-gallon prices against contemporaneous DLA contracts for diesel and gasoline in other Central American or similar operational environments. Factors such as transportation costs, local taxes, and specific delivery locations within Honduras would also influence pricing. Generally, FP-EPA contracts aim to balance price stability for the government with protection against extreme market volatility for both parties, but they can lead to higher overall costs than fixed-price contracts if market prices rise significantly.

What are the primary risks associated with a Fixed Price with Economic Price Adjustment (FP-EPA) contract for fuel supply in a foreign country?

The primary risks associated with an FP-EPA contract for fuel supply in a foreign country like Honduras include price volatility and potential cost overruns for the government if fuel prices increase significantly beyond projections. While the economic price adjustment is designed to account for market fluctuations, the specific indices used and the cap on adjustments (if any) determine the extent of risk. For the contractor, the risk lies in potential losses if fuel prices decrease substantially or if the adjustment mechanism does not fully cover their increased costs. Operational risks in Honduras, such as logistical challenges, security concerns, or political instability, could also impact delivery and potentially lead to price adjustments or contract disputes. Ensuring reliable supply chains and managing currency exchange rate fluctuations can also pose risks.

What is the track record of C A M INTERNATIONAL USA, INC. in performing similar DoD fuel supply contracts?

Information regarding the specific track record of C A M INTERNATIONAL USA, INC. in performing similar Department of Defense fuel supply contracts is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance evaluations, any documented issues or successes on previous government contracts, and their experience with international logistics and fuel distribution. Companies awarded significant contracts like this typically have demonstrated capabilities in supply chain management, quality assurance, and compliance with government regulations. Further investigation into federal procurement databases (like SAM.gov or FPDS) and contractor performance assessment reporting systems would be necessary to evaluate their specific history with DoD fuel contracts, particularly in overseas locations.

How does the number of bidders (2) impact the government's ability to achieve competitive pricing for this fuel contract?

A low number of bidders, such as the two received for this contract, generally reduces the intensity of competition and can limit the government's ability to secure the most competitive pricing. With only two offers, the government has less leverage to negotiate favorable terms or drive prices down through aggressive bidding. While 'full and open competition' was utilized, the limited number of responses suggests that either the market for this specific requirement in Honduras is small, or potential bidders faced barriers to entry (e.g., high startup costs, specific certifications, logistical complexities). This scenario increases the importance of robust evaluation criteria and negotiation strategies to ensure the best possible value is obtained from the available bids.

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: SP060011R0135

Offers Received: 2

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

Evaluated Preference: NONE

Contractor Details

Address: 7473 REGATTA WAY, LAWRENCEVILLE, GA, 90

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

Financial Breakdown

Contract Ceiling: $23,737,680

Exercised Options: $23,737,680

Current Obligation: $23,737,680

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060012D1250

IDV Type: IDC

Timeline