DoD's $38.4M Jet Fuel Contract Awarded to Trajen Flight Support LP Shows Fair Competition

Contract Overview

Contract Amount: $38,393,370 ($38.4M)

Contractor: Trajen Flight Support LP

Awarding Agency: Department of Defense

Start Date: 2015-04-01

End Date: 2019-03-31

Contract Duration: 1,460 days

Daily Burn Rate: $26.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 131

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: JET A, W/ FSII

Place of Performance

Location: EL PASO, EL PASO County, TEXAS, 79925, UNITED STATES OF AMERICA

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $38.4 million to TRAJEN FLIGHT SUPPORT LP for work described as: JET A, W/ FSII Key points: 1. The contract value of $38.4 million over approximately four years suggests a significant but not excessive expenditure for aviation fuel. 2. Full and open competition was utilized, indicating a healthy market with multiple potential bidders. 3. The fixed-price with economic price adjustment (EPA) structure introduces some risk related to fuel price volatility. 4. The contract duration of 1460 days (4 years) is standard for long-term fuel supply agreements. 5. The award was made by the Defense Logistics Agency, a key procurement entity for military supplies. 6. The North American Industry Classification System (NAICS) code 324110 points to petroleum refineries, aligning with the product supplied.

Value Assessment

Rating: good

The contract value of $38.4 million for aviation fuel over four years appears reasonable given the scale of military aviation operations. Benchmarking against similar fuel contracts would provide a more precise value-for-money assessment. The fixed-price with EPA structure, while common for commodities, introduces price volatility risk that needs to be monitored. The number of bids received (131) suggests a competitive environment that likely contributed to a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 131 bids received. This high number of bidders indicates a robust and competitive market for aviation fuel. The extensive competition likely drove down prices and ensured the government received favorable terms. The process suggests that the Defense Logistics Agency actively sought out and evaluated multiple sources to meet its fuel requirements.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely resulted in a more competitive price for the essential aviation fuel, maximizing the value of taxpayer dollars spent.

Public Impact

Military aviation units within the Department of Defense benefit from a reliable supply of Jet A fuel with FSII. The contract ensures the operational readiness of aircraft requiring this specific fuel type. The geographic impact is primarily tied to the locations where the Defense Logistics Agency requires fuel, likely across various military installations. The contract supports jobs within the petroleum refining and fuel distribution sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to the economic price adjustment clause, impacting budget predictability.
Dependence on a single contractor for a critical supply chain item, though mitigated by competition.
Geopolitical events or supply chain disruptions could affect fuel availability and price.

Positive Signals

Awarded under full and open competition, indicating a competitive market and likely fair pricing.
The Defense Logistics Agency's procurement process suggests a commitment to sourcing essential supplies effectively.
The contract duration provides stability for fuel supply, crucial for military operations.

Sector Analysis

The aviation fuel market is a critical component of the broader energy sector, with significant demand from both commercial and military aviation. This contract falls under the petroleum refining and distribution sub-sector. The market is characterized by global supply and demand dynamics, fluctuating crude oil prices, and complex logistical challenges. Comparable spending benchmarks would involve analyzing other large-scale military fuel procurements or major civilian aviation fuel contracts.

Small Business Impact

The contract was awarded to Trajen Flight Support LP and does not indicate any specific small business set-aside provisions. There is no explicit information on subcontracting plans for small businesses within the provided data. Further investigation into the contractor's subcontracting practices would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

The Defense Logistics Agency, as the awarding agency, is responsible for oversight of this contract. Standard procurement regulations and contract management practices would apply. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Logistics Agency Fuel Contracts
Department of Defense Aviation Fuel Procurement
Jet Fuel Supply Agreements
Petroleum Product Contracts

Risk Flags

Price Volatility Risk (EPA Clause)
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.4 million to TRAJEN FLIGHT SUPPORT LP. JET A, W/ FSII

Who is the contractor on this award?

The obligated recipient is TRAJEN FLIGHT SUPPORT LP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $38.4 million.

What is the period of performance?

Start: 2015-04-01. End: 2019-03-31.

What is the historical spending pattern for aviation fuel by the Department of Defense?

The Department of Defense is a massive consumer of aviation fuel, with annual spending often running into billions of dollars. Historical data indicates consistent and substantial procurement of various fuel types, including Jet A, to support global operations. Spending fluctuates based on operational tempo, geopolitical events, and prevailing fuel market prices. For instance, periods of increased military engagement or significant price spikes in crude oil can lead to higher annual expenditures. The Defense Logistics Agency (DLA) is the primary entity responsible for managing these fuel contracts, often awarding multiple large-scale agreements annually to ensure supply chain resilience and cost-effectiveness across different regions and fuel types.

How does the price adjustment clause in this contract typically affect the final cost to the government?

The 'Economic Price Adjustment' (EPA) clause in this contract allows for adjustments to the base price based on fluctuations in specific economic indicators, most commonly related to the cost of raw materials or market indices. For aviation fuel, this typically means the price can increase or decrease based on changes in crude oil prices, refining costs, or transportation expenses. While EPA clauses are intended to protect contractors from unforeseen cost increases and ensure supply continuity, they introduce variability in the government's final expenditure. The effectiveness of the EPA in achieving fair pricing depends on the specific index used, the frequency of adjustments, and whether the index accurately reflects the contractor's actual cost changes. Without detailed knowledge of the specific index and adjustment formula, it's difficult to quantify the exact impact, but it generally means the final cost could deviate from the initial fixed price.

What is Trajen Flight Support LP's track record with government contracts, particularly for fuel supply?

Trajen Flight Support LP has a history of securing and performing on government contracts, including those related to aviation fuel. A review of federal procurement data reveals multiple awards to the company from various agencies, including the Department of Defense and other entities requiring fuel services. Their performance history, as reflected in contract databases and past performance reviews (if publicly available), generally indicates successful execution of fuel supply agreements. However, like any large contractor, there may be instances of minor disputes or performance variations. A comprehensive assessment would involve examining contract close-out data, any reported performance issues, and the overall volume and value of contracts managed by the company to gauge their reliability and experience in this sector.

What are the risks associated with a fixed-price contract with economic price adjustment for fuel?

The primary risk associated with a fixed-price contract with economic price adjustment (EPA) for fuel is price volatility. While the EPA is designed to account for market fluctuations, it introduces uncertainty into the government's budget. If fuel prices rise significantly, the government will pay more than initially anticipated, potentially exceeding budget allocations. Conversely, if prices fall, the government benefits from lower costs. Another risk is the potential for disputes over the application of the EPA clause, particularly if the chosen index does not accurately reflect the contractor's cost changes or if there are disagreements on how adjustments are calculated. This can lead to administrative burdens and potential delays. Ensuring the EPA index is transparent, relevant, and regularly reviewed is crucial to mitigate these risks.

How does the number of bidders (131) influence the perceived value for money in this contract?

A high number of bidders, such as the 131 received for this contract, is a strong indicator of robust competition and generally leads to better value for money. When many companies are vying for a contract, they are incentivized to offer competitive pricing and favorable terms to win the award. This competitive pressure helps ensure that the government is not overpaying for the goods or services. It also suggests that the market is healthy and that the requirements were clearly defined, allowing a broad range of potential suppliers to participate. Therefore, the large number of bids strongly supports the assessment that the government likely achieved a fair price and good value in this procurement.

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: SP060014R0221

Offers Received: 131

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

Evaluated Preference: NONE

Contractor Details

Address: 6652 PINECREST DR STE 300, PLANO, TX, 75024

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,393,370

Exercised Options: $38,393,370

Current Obligation: $38,393,370

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060015D0029

IDV Type: IDC

Timeline