DoD's $45M Fuel Contract for Guam Awarded to Mobil Oil, Raising Questions on Competition and Value
Contract Overview
Contract Amount: $45,034,122 ($45.0M)
Contractor: Mobil OIL Guam Inc.
Awarding Agency: Department of Defense
Start Date: 2014-01-01
End Date: 2016-12-31
Contract Duration: 1,095 days
Daily Burn Rate: $41.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: FUEL REQUIREMENTS CONTRACT FOR GUAM
Place of Performance
Location: HAGATNA, GUAM County, GUAM, 96910, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $45.0 million to MOBIL OIL GUAM INC. for work described as: FUEL REQUIREMENTS CONTRACT FOR GUAM Key points: 1. The contract awarded to Mobil Oil Guam Inc. for fuel requirements on Guam represents a significant expenditure. 2. The 'FULL AND OPEN COMPETITION' designation suggests a competitive process, but the single awardee warrants further scrutiny. 3. Potential risks include price volatility and limited supplier options in the long term. 4. The petroleum refineries sector is critical for military operations, especially in remote locations like Guam.
Value Assessment
Rating: fair
The contract's value of $45 million over three years needs to be benchmarked against similar fuel supply contracts in comparable geographic regions. Without specific unit pricing data, a precise assessment of value for money is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were theoretically allowed to participate. However, the award to a single entity, Mobil Oil Guam Inc., raises questions about the effectiveness of the competition and whether it truly drove the best possible price discovery.
Taxpayer Impact: Taxpayer funds are being utilized for essential fuel supplies. The effectiveness of the competition directly impacts the efficiency of this spending.
Public Impact
Ensures fuel availability for military operations in the strategic location of Guam. Impacts local fuel market dynamics and potentially consumer prices. Supports the logistical needs of the Department of Defense in the Pacific region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition despite 'full and open' designation
- Potential for price gouging in a remote location
- Dependence on a single supplier for critical fuel needs
Positive Signals
- Ensures supply chain continuity for essential fuel
- Supports DoD operations in a key strategic area
Sector Analysis
This contract falls within the petroleum refining sector, crucial for energy supply chains. Spending benchmarks for fuel contracts in remote or island locations can vary significantly due to logistical costs and market concentration.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine if small businesses were involved as subcontractors or if opportunities were missed.
Oversight & Accountability
Oversight of this contract would involve monitoring fuel delivery, quality, and pricing against contract terms. Accountability rests with the Defense Logistics Agency to ensure Mobil Oil Guam Inc. meets its obligations and that the pricing remains fair throughout the contract period.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for price escalation due to market volatility
- Limited supplier diversity increases reliance risk
- Geographic isolation may impact delivery reliability
- Lack of transparency on specific competitive bids
Tags
petroleum-refineries, department-of-defense, gu, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.0 million to MOBIL OIL GUAM INC.. FUEL REQUIREMENTS CONTRACT FOR GUAM
Who is the contractor on this award?
The obligated recipient is MOBIL OIL GUAM INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $45.0 million.
What is the period of performance?
Start: 2014-01-01. End: 2016-12-31.
What was the competitive landscape like for this fuel contract, and were there specific reasons why only one awardee was selected despite 'full and open competition'?
While designated as 'full and open competition,' the award to a single entity suggests potential barriers to entry for other bidders, such as specialized infrastructure requirements, logistical challenges in Guam, or specific technical capabilities. Further investigation into the solicitation details and bid submissions would clarify the competitive dynamics and the rationale behind the sole award.
How does the unit price of fuel under this contract compare to market rates or similar contracts in other Pacific territories, considering the potential for higher logistical costs?
Benchmarking the unit price is crucial for assessing value. Without access to the specific pricing structure, it's difficult to determine if Mobil Oil Guam Inc.'s rates are competitive. Factors like transportation, storage, and local market conditions in Guam must be considered when comparing against other contracts to ascertain if the price reflects fair market value or includes a premium.
What mechanisms are in place to ensure price reasonableness and prevent potential price gouging by Mobil Oil Guam Inc. throughout the contract's duration, especially given the remote location?
The contract likely includes clauses for price adjustments based on established indices or market fluctuations. However, the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA) would be responsible for ongoing oversight. Regular audits and reviews of pricing data are essential to ensure that the government is not overpaying, particularly in a location with limited alternative suppliers.
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: SP060013R0225
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Exxon Mobil Corp (UEI: 001213214)
Address: 642 EAST MARINE DR, AGANA, GU, 96910
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $45,034,122
Exercised Options: $45,034,122
Current Obligation: $45,034,122
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060013D1027
IDV Type: IDC
Timeline
Start Date: 2014-01-01
Current End Date: 2016-12-31
Potential End Date: 2017-01-31 00:00:00
Last Modified: 2015-11-19
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