DoD's $48.8M Jet Fuel Contract with Jacksonville Jetport LLC: Fixed Price with Economic Adjustment
Contract Overview
Contract Amount: $48,823,762 ($48.8M)
Contractor: Jacksonville Jetport LLC
Awarding Agency: Department of Defense
Start Date: 2013-04-01
End Date: 2017-03-31
Contract Duration: 1,460 days
Daily Burn Rate: $33.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 133
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: JET A W/ FSII
Place of Performance
Location: JACKSONVILLE, DUVAL County, FLORIDA, 32221
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $48.8 million to JACKSONVILLE JETPORT LLC for work described as: JET A W/ FSII Key points: 1. The contract awarded to Jacksonville Jetport LLC for Jet A fuel with FSII represents a significant expenditure within the Defense Logistics Agency's fuel procurement. 2. Full and open competition was utilized, suggesting a competitive bidding process aimed at achieving favorable pricing. 3. The contract's fixed-price structure with economic price adjustment introduces potential cost volatility tied to market fluctuations. 4. The sector is dominated by large, established fuel suppliers, making it challenging for smaller entities to compete.
Value Assessment
Rating: fair
The contract's fixed-price with economic price adjustment (FPEPA) structure can lead to unpredictable costs for the government, especially during periods of high fuel price volatility. Benchmarking against similar fuel contracts would be necessary to fully assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition is a positive indicator for price discovery. However, the FPEPA clause may limit the extent to which competition can fully control price escalation over the contract's duration.
Taxpayer Impact: Taxpayer funds are exposed to potential price increases due to market fluctuations inherent in the economic price adjustment clause.
Public Impact
Ensures consistent fuel supply for military aircraft operations. Potential for increased costs to taxpayers if fuel prices rise significantly. Supports a critical component of national defense infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause introduces cost uncertainty.
- Lack of specific per-unit cost benchmark makes direct value assessment difficult.
Positive Signals
- Full and open competition utilized.
- Contract supports essential defense operations.
Sector Analysis
This contract falls within the petroleum refining and distribution sector, crucial for supporting transportation and logistics. Defense Logistics Agency contracts in this area often involve large volumes and are subject to global commodity price fluctuations.
Small Business Impact
The data indicates this contract was not awarded to small businesses. The nature of large-scale fuel procurement often favors established, larger corporations with the capacity and infrastructure to meet extensive government demands.
Oversight & Accountability
The contract was awarded via a delivery order under a larger contract vehicle, suggesting a structured procurement process. Oversight would focus on adherence to the economic price adjustment formula and delivery performance.
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 transparency in per-unit cost makes value assessment challenging.
- Dependence on volatile global fuel markets.
- No small business participation noted.
Tags
petroleum-refineries, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.8 million to JACKSONVILLE JETPORT LLC. JET A W/ FSII
Who is the contractor on this award?
The obligated recipient is JACKSONVILLE JETPORT LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $48.8 million.
What is the period of performance?
Start: 2013-04-01. End: 2017-03-31.
What was the average price per gallon of Jet A fuel under this contract, and how did it compare to market rates at the time of award and during the contract period?
The provided data does not include the average price per gallon. To assess value, one would need to analyze the economic price adjustment mechanism and compare actual paid prices against prevailing market rates for Jet A fuel with FSII during the 2013-2017 period. This would reveal if the contract effectively managed cost fluctuations or resulted in overpayment.
What specific risks were identified by the Defense Logistics Agency regarding the economic price adjustment clause, and were mitigation strategies implemented?
The primary risk associated with the economic price adjustment (EPA) is cost escalation beyond initial projections, impacting budget certainty. DLA likely assessed risks related to fuel market volatility, geopolitical events, and supply chain disruptions. Mitigation might involve caps on price increases, specific index triggers, or regular reviews of the EPA formula's fairness.
How effectively did the full and open competition process ensure competitive pricing, considering the economic price adjustment feature?
Full and open competition is designed to maximize price discovery. However, the EPA clause introduces a variable that can complicate direct price comparisons between bids. While competition likely set a baseline, the EPA's impact on the final price paid means the initial competitive advantage might be eroded by market forces, requiring ongoing monitoring.
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: SP060012R0238
Offers Received: 133
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 13365 AERONAUTICAL CIRCLE, JACKSONVILLE, FL, 32221
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,823,762
Exercised Options: $48,823,762
Current Obligation: $48,823,762
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060013D0046
IDV Type: IDC
Timeline
Start Date: 2013-04-01
Current End Date: 2017-03-31
Potential End Date: 2017-03-31 00:00:00
Last Modified: 2017-12-20
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