DoD awards ExxonMobil $325M contract for petroleum products under full and open competition
Contract Overview
Contract Amount: $325,430,086 ($325.4M)
Contractor: Exxon Mobil Corporation
Awarding Agency: Department of Defense
Start Date: 2013-06-25
End Date: 2014-06-30
Contract Duration: 370 days
Daily Burn Rate: $879.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: AWARD UNDER RMW SP060012R0161 FOR F76 (114,205,000 USG) AND JAA (14,250,000 USG).
Place of Performance
Location: TORRANCE, LOS ANGELES County, CALIFORNIA, 90504, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $325.4 million to EXXON MOBIL CORPORATION for work described as: AWARD UNDER RMW SP060012R0161 FOR F76 (114,205,000 USG) AND JAA (14,250,000 USG). Key points: 1. Contract awarded to ExxonMobil for F76 and JAA petroleum products. 2. Total award value is $325,430,008.19. 3. Competition method was 'Full and Open'. 4. Contract type is Fixed Price with Economic Price Adjustment. 5. Performance period is from June 25, 2013, to June 30, 2014.
Value Assessment
Rating: good
The contract value of $325.4 million appears reasonable for the specified petroleum products, considering the scale and duration. Benchmarking against similar large-scale fuel procurements by the DoD would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to competitive pricing as multiple bidders vie for the contract.
Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing the best possible prices for essential petroleum products.
Public Impact
Ensures supply of critical petroleum products for military operations. Supports national energy security through strategic fuel procurement. Impacts the petroleum refining sector by awarding a significant contract. Potential for price fluctuations due to economic price adjustment clause.
Waste & Efficiency Indicators
Waste Risk Score: 80 / 10
Warning Flags
- Economic price adjustment may lead to cost overruns if fuel prices rise significantly.
- Dependence on a single large supplier for critical fuel needs.
Positive Signals
- Awarded under full and open competition, indicating competitive pricing.
- ExxonMobil is a major, established supplier with proven capabilities.
- Contract duration aligns with operational needs.
Sector Analysis
This contract falls within the Petroleum Refineries sector (NAICS 324110). Spending in this sector by the DoD is crucial for maintaining operational readiness and logistical support for global missions. Benchmarks for similar fuel procurements vary widely based on volume, type of fuel, and geopolitical factors.
Small Business Impact
The data indicates this contract was not awarded to a small business (ss: false, sb: false). Large prime contractors like ExxonMobil may engage small businesses as subcontractors, but this contract itself does not directly benefit small businesses.
Oversight & Accountability
The Department of Defense, specifically the Defense Logistics Agency, is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms are expected to be in place to ensure compliance and performance.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost increases due to EPA.
- Dependence on a single large supplier.
- Geopolitical risks affecting fuel prices and supply chains.
- Contract performance risk if supplier fails to meet delivery or quality standards.
Tags
petroleum-refineries, department-of-defense, ca, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $325.4 million to EXXON MOBIL CORPORATION. AWARD UNDER RMW SP060012R0161 FOR F76 (114,205,000 USG) AND JAA (14,250,000 USG).
Who is the contractor on this award?
The obligated recipient is EXXON MOBIL CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $325.4 million.
What is the period of performance?
Start: 2013-06-25. End: 2014-06-30.
What is the potential financial exposure to the government due to the economic price adjustment clause?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic factors, typically related to the cost of raw materials or labor. Without specific EPA indices and caps defined in the contract, it's difficult to quantify the exact financial exposure. However, significant upward trends in crude oil prices or refining costs could lead to substantial increases in the final contract cost beyond the initial $325 million award.
How does the 'Full and Open Competition' method mitigate risks associated with sole-source or limited competition awards for critical fuel supplies?
Full and open competition mitigates risks by allowing any interested and qualified source to submit a bid. This broadens the potential supplier base, increasing the likelihood of receiving competitive pricing and ensuring that the government is not overly reliant on a single or limited number of providers. It reduces the risk of price gouging, ensures a wider range of technical solutions, and promotes market fairness, ultimately leading to better value for taxpayer dollars.
What are the key performance indicators (KPIs) used to measure the effectiveness of this petroleum supply contract?
Effectiveness is typically measured through KPIs such as on-time delivery rates, fuel quality compliance (meeting specifications), accuracy of invoicing, and responsiveness to urgent delivery requests. The Defense Logistics Agency would monitor these metrics throughout the contract period. Consistent performance against these KPIs ensures the reliable supply of fuel necessary for military operations, directly impacting readiness and mission success.
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: SP060012R0161
Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 3225 GALLOWS RD, FAIRFAX, VA, 22037
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $325,430,086
Exercised Options: $325,430,086
Current Obligation: $325,430,086
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060013D0474
IDV Type: IDC
Timeline
Start Date: 2013-06-25
Current End Date: 2014-06-30
Potential End Date: 2014-06-30 00:00:00
Last Modified: 2016-03-17
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