DoD's $29.4M petroleum contract with TMV, LLC awarded under full and open competition

Contract Overview

Contract Amount: $29,400,505 ($29.4M)

Contractor: TMV, LLC

Awarding Agency: Department of Defense

Start Date: 2012-06-06

End Date: 2015-06-30

Contract Duration: 1,119 days

Daily Burn Rate: $26.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: GASOHOL REGULAR UNLEADED, TX LOW EMISSION ULSD, ULSD #2

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75243, UNITED STATES OF AMERICA

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $29.4 million to TMV, LLC for work described as: GASOHOL REGULAR UNLEADED, TX LOW EMISSION ULSD, ULSD #2 Key points: 1. Contract awarded to TMV, LLC for petroleum products. 2. The contract was competed fully and openly, suggesting a competitive bidding process. 3. The contract duration was 1119 days, indicating a medium-term supply agreement. 4. The contract type is Fixed Price with Economic Price Adjustment, which can mitigate some price volatility. 5. The North American Industry Classification System (NAICS) code 324110 points to petroleum refineries as the sector. 6. The contract was awarded by the Defense Logistics Agency, a major procurement arm of the DoD. 7. The contract was awarded in Texas, indicating a specific geographic focus for delivery or operations.

Value Assessment

Rating: fair

Benchmarking the value of this $29.4 million contract for petroleum products is challenging without specific unit pricing and market data at the time of award. The contract type, Fixed Price with Economic Price Adjustment, aims to balance cost certainty for the government with protection against market fluctuations for the contractor. However, the effectiveness of this balance depends heavily on the specific adjustment clauses and the volatility of fuel prices during the contract period. Without comparable contract data for similar petroleum products from the same period, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' While this indicates a competitive process, the 'after exclusion of sources' clause suggests that certain potential bidders may have been excluded prior to the main competition. The number of bidders is not specified, but the full and open nature implies that multiple companies had the opportunity to bid, which generally supports price discovery. The exclusion of sources warrants further investigation to understand its impact on the competitive landscape.

Taxpayer Impact: A full and open competition, even with exclusions, generally provides a better opportunity for competitive pricing than a sole-source award. This can lead to more favorable prices for taxpayers compared to less competitive scenarios.

Public Impact

The Department of Defense benefits from a reliable supply of petroleum products essential for its operations. The contract supports the energy sector by procuring refined petroleum products. The geographic impact is primarily in Texas, where the contract was awarded. The contract likely supports jobs within the petroleum refining and distribution industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'after exclusion of sources' clause in the competition type requires scrutiny to ensure it did not unduly limit competition.
Lack of specific unit pricing data makes a detailed value-for-money assessment difficult.
The economic price adjustment mechanism could lead to higher costs if fuel prices escalated significantly during the contract term.

Positive Signals

Awarded under full and open competition, indicating an effort to solicit bids from multiple sources.
The contract type (Fixed Price with EPA) offers some protection against extreme price volatility.
The Defense Logistics Agency is experienced in procuring complex goods and services, suggesting established oversight processes.

Sector Analysis

The petroleum refining industry (NAICS 324110) is a critical sector for national security and economic activity, providing essential fuels and lubricants. The Defense Logistics Agency (DLA) is a significant procurer of petroleum products for the Department of Defense, often awarding large, long-term contracts to ensure supply chain stability. Spending in this sector by the DoD can fluctuate based on global energy prices, geopolitical events, and operational tempo. Comparable spending benchmarks would typically involve analyzing DLA's historical awards for similar fuel types and volumes.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be indirect, potentially through subcontracting opportunities if TMV, LLC engages smaller firms in its supply chain. Without specific subcontracting plans or data, it's difficult to assess the extent of small business involvement or the contract's impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency's contracting and program management offices. Accountability measures are typically embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Logistics Agency Fuel Procurement
Department of Defense Energy Contracts
Petroleum Product Supply Contracts
Fixed Price with Economic Price Adjustment Contracts

Risk Flags

Potential limitation of competition due to source exclusion.
Value for money assessment is difficult without detailed pricing and market data.
Economic Price Adjustment (EPA) clause introduces price volatility risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.4 million to TMV, LLC. GASOHOL REGULAR UNLEADED, TX LOW EMISSION ULSD, ULSD #2

Who is the contractor on this award?

The obligated recipient is TMV, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.4 million.

What is the period of performance?

Start: 2012-06-06. End: 2015-06-30.

What was the specific reason for excluding certain sources prior to the 'full and open competition' for this petroleum contract?

The provided data indicates the contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This specific clause suggests that while the competition was generally open, certain potential offerors were deemed ineligible or were not solicited for reasons not detailed in the basic award information. Common reasons for excluding sources can include failure to meet pre-qualification criteria, specific security requirements, or prior performance issues. Without further documentation from the Defense Logistics Agency (DLA) or the contracting officer's justification, the precise rationale for these exclusions remains unknown. Understanding these exclusions is crucial, as it could potentially limit the breadth of competition and impact the final pricing achieved for the government.

How does the Fixed Price with Economic Price Adjustment (EPA) clause typically function in petroleum contracts, and what were the potential implications for this $29.4M award?

In a Fixed Price with Economic Price Adjustment (EPA) contract, the base price is fixed, but it can be adjusted upwards or downwards based on a pre-defined formula tied to specific economic factors, such as commodity indices or published price lists. For petroleum contracts, this typically means the price per gallon or barrel can change in response to fluctuations in crude oil prices or refined product market indices. The DLA likely used a specific index or set of indices to govern these adjustments. The 'economic price adjustment' aims to protect both the government and the contractor from extreme market volatility. For this $29.4 million contract, if fuel prices rose significantly during its term (2012-2015), the EPA would have allowed the price paid to increase, potentially exceeding the initial fixed price. Conversely, if prices fell, the government could benefit from lower costs. The effectiveness of this clause in ensuring value for money depends entirely on the chosen index, the frequency of adjustments, and the actual market movement during the contract's life.

What is the typical market size and competitive landscape for petroleum refining (NAICS 324110) that the Defense Logistics Agency operates within?

The petroleum refining industry (NAICS 324110) is a large and complex sector, characterized by significant capital investment, global supply chains, and substantial market fluctuations influenced by geopolitical events and demand. The market size is measured in trillions of dollars globally. For the Defense Logistics Agency (DLA), procuring fuels is a critical mission, and they operate within a landscape that includes major integrated oil companies, independent refiners, and specialized fuel distributors. Competition can be intense, particularly for standard fuel grades, but can become more limited for specialized fuels or in specific geographic regions where refinery capacity is constrained. DLA often uses large-scale, long-term contracts to secure supply and leverage economies of scale, negotiating with key players in the market.

Can we assess the contractor's track record (TMV, LLC) based on this single award, and what are common performance indicators for petroleum suppliers?

Assessing TMV, LLC's track record based solely on this single $29.4 million award is limited. This contract represents a significant but isolated data point. Common performance indicators for petroleum suppliers in federal contracts include on-time delivery rates, fuel quality compliance (meeting specific standards like ASTM), accuracy of invoicing, responsiveness to DLA inquiries, and adherence to safety and environmental regulations. Federal agencies often track these metrics through past performance questionnaires and contractor performance assessment reporting (CPARs). Without access to CPARs or other performance data specific to TMV, LLC for this contract or others, it's impossible to definitively evaluate their reliability or efficiency as a contractor beyond the fact that they were awarded and presumably performed this contract.

How does the geographic award location (Texas) influence the analysis of this petroleum contract, considering DLA's national mission?

The award location in Texas is significant for several reasons. Texas is a major hub for the U.S. petroleum industry, hosting numerous refineries and extensive pipeline infrastructure. Awarding the contract in Texas likely means that TMV, LLC either operates refineries in the state or has strong logistical ties to the region, potentially offering cost efficiencies due to proximity to supply sources or established distribution networks. For the Defense Logistics Agency (DLA), awarding contracts in key energy-producing regions like Texas can be strategic for ensuring supply chain security and potentially achieving better pricing. It suggests the contract may have been intended to fulfill demand within or sourced from that region, aligning with DLA's mission to provide fuel where and when needed by the military.

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: SP060012R0211

Offers Received: 2

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

Evaluated Preference: NONE

Contractor Details

Address: 11615 FOREST CENTRAL DR STE 202, DALLAS, TX, 75243

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,400,505

Exercised Options: $29,400,505

Current Obligation: $29,400,505

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060012D4500

IDV Type: IDC

Timeline