DOD Spends $27M on Diesel Fuel in California, Awarded to Falcon Fuels, Inc
Contract Overview
Contract Amount: $27,085,244 ($27.1M)
Contractor: Falcon Fuels, Inc.
Awarding Agency: Department of Defense
Start Date: 2012-09-01
End Date: 2015-09-30
Contract Duration: 1,124 days
Daily Burn Rate: $24.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 32
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: DIESEL FUEL, BIODIESEL, AND E85 FOR VARIOUS DOD LOCATIONS IN CA
Place of Performance
Location: PARAMOUNT, LOS ANGELES County, CALIFORNIA, 90723
Plain-Language Summary
Department of Defense obligated $27.1 million to FALCON FUELS, INC. for work described as: DIESEL FUEL, BIODIESEL, AND E85 FOR VARIOUS DOD LOCATIONS IN CA Key points: 1. Contract awarded to a single supplier, Falcon Fuels, Inc. 2. Spending falls within the Petroleum Refineries sector. 3. Fixed Price with Economic Price Adjustment contract type. 4. No small business participation noted.
Value Assessment
Rating: fair
The total contract value of $27.1M over three years for diesel fuel across multiple DOD locations appears reasonable given market fluctuations. However, the fixed-price with economic adjustment structure warrants scrutiny for potential cost overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the award went to a single entity, Falcon Fuels, Inc., which may limit price discovery and potentially lead to less favorable pricing than if multiple suppliers were actively engaged.
Taxpayer Impact: Taxpayers are impacted by the total expenditure of $27.1M. The economic price adjustment clause could lead to higher costs than initially projected if fuel prices rise significantly.
Public Impact
Ensures fuel supply for critical Department of Defense operations in California. Potential for price volatility due to economic price adjustment. Lack of small business involvement may limit economic opportunities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment could increase costs.
- No small business participation.
- Single awardee may limit competition benefits.
Positive Signals
- Full and open competition was utilized.
- Ensures critical fuel supply.
Sector Analysis
This contract falls under the Petroleum Refineries sector, specifically for fuel distribution. Spending benchmarks for fuel contracts can vary widely based on volume, location, and market conditions. This $27M expenditure over three years for a specific region is a significant but not necessarily excessive amount for military fuel needs.
Small Business Impact
The contract explicitly states no small business participation. This indicates that the prime contractor, Falcon Fuels, Inc., did not subcontract with small businesses for this award, potentially missing opportunities to support smaller enterprises.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a key agency for managing supply chains. Oversight would focus on ensuring timely delivery, adherence to fuel specifications, and proper application of the economic price adjustment clause to prevent unwarranted cost increases.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Lack of small business participation.
- Single awardee may limit competitive pricing.
- Dependence on one supplier for critical fuel.
Tags
petroleum-refineries, department-of-defense, ca, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.1 million to FALCON FUELS, INC.. DIESEL FUEL, BIODIESEL, AND E85 FOR VARIOUS DOD LOCATIONS IN CA
Who is the contractor on this award?
The obligated recipient is FALCON FUELS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $27.1 million.
What is the period of performance?
Start: 2012-09-01. End: 2015-09-30.
What was the average per-gallon price paid under this contract, and how does it compare to market benchmarks at the time of award and throughout the contract period?
Determining the exact per-gallon price is complex due to the economic price adjustment clause. While the total award was $27.1M, the final price per gallon would fluctuate with market indices. A detailed analysis comparing these adjusted prices against prevailing market rates for diesel and biodiesel in California during the 2012-2015 period would be necessary to assess value for money.
What specific factors led to the award to a single entity despite full and open competition, and were there any risks associated with this concentration of supply?
The solicitation documents would detail why only one offeror, Falcon Fuels, Inc., was selected. Potential reasons include specialized capabilities, logistical advantages, or specific pricing structures. Risks associated with a single awardee include potential supply disruptions if the contractor faces issues and reduced leverage for the government in future negotiations.
How effectively did the economic price adjustment mechanism protect the government from excessive price increases while allowing the contractor to cover legitimate cost escalations?
The effectiveness of the economic price adjustment (EPA) hinges on the specific index used and the caps or floors in place. If the EPA was tied to a transparent and representative fuel price index, and the adjustments were reasonable, it likely provided fair compensation. However, without detailed data on the index performance and actual price changes, it's difficult to definitively assess its effectiveness in preventing excessive costs.
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: SP060012R0201
Offers Received: 32
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 7300 ALONDRA BLVD STE 204, PARAMOUNT, CA, 44
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $27,085,244
Exercised Options: $27,085,244
Current Obligation: $27,085,244
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060012D4533
IDV Type: IDC
Timeline
Start Date: 2012-09-01
Current End Date: 2015-09-30
Potential End Date: 2015-09-30 00:00:00
Last Modified: 2015-03-02
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