DOE's $2B Strategic Petroleum Reserve contract with Fluor Federal awarded via full and open competition
Contract Overview
Contract Amount: $1,996,329,703 ($2.0B)
Contractor: Fluor Federal Petroleum Operations, LLC
Awarding Agency: Department of Energy
Start Date: 2014-04-01
End Date: 2025-12-31
Contract Duration: 4,292 days
Daily Burn Rate: $465.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: IGF::OT::IGF MANAGEMENT AND OPERATION OF THE STRATEGIC PETROLEUM RESERVE FACILITIES.
Place of Performance
Location: NEW ORLEANS, JEFFERSON County, LOUISIANA, 70123
Plain-Language Summary
Department of Energy obligated $2.00 billion to FLUOR FEDERAL PETROLEUM OPERATIONS, LLC for work described as: IGF::OT::IGF MANAGEMENT AND OPERATION OF THE STRATEGIC PETROLEUM RESERVE FACILITIES. Key points: 1. Contract value exceeds $1.99 billion over its lifespan. 2. Fluor Federal Petroleum Operations, LLC holds the contract. 3. The contract covers management and operation of SPR facilities. 4. Awarded under full and open competition. 5. Cost Plus Award Fee contract type.
Value Assessment
Rating: good
The contract's Cost Plus Award Fee structure incentivizes performance. Benchmarking against similar large-scale facilities management contracts is difficult without specific cost breakdowns, but the overall value suggests a significant operational scope.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating a robust price discovery process. This method generally leads to more competitive pricing compared to sole-source or limited competition.
Taxpayer Impact: Full and open competition aims to ensure taxpayer funds are used efficiently by fostering a competitive environment for contract awards.
Public Impact
Ensures continued operation of the Strategic Petroleum Reserve, a critical national energy security asset. Supports energy independence and stability by maintaining a reserve of crude oil. Provides essential facilities support services for a vital government function.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in Cost Plus Award Fee contracts.
- Long contract duration (over 10 years) may limit flexibility for future technological advancements or market shifts.
Positive Signals
- Awarded via full and open competition, suggesting competitive pricing.
- Contract supports a critical national security asset (SPR).
- Experienced contractor (Fluor Federal) likely brings significant operational expertise.
Sector Analysis
This contract falls under Facilities Support Services, a broad category encompassing the operation and maintenance of government facilities. Spending in this sector is substantial, driven by the need to maintain critical infrastructure.
Small Business Impact
The data indicates the prime contractor is Fluor Federal Petroleum Operations, LLC. There is no explicit information on small business subcontracting participation within this data snippet.
Oversight & Accountability
The Department of Energy's Inspector General is responsible for overseeing contracts to ensure efficiency and prevent fraud. The contract's duration and value warrant regular oversight.
Related Government Programs
- Facilities Support Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Cost Plus Award Fee structure can lead to cost overruns.
- Long-term contract may not adapt quickly to changing energy landscapes.
- Reliance on a single large contractor for critical infrastructure.
- Potential for performance issues impacting SPR readiness.
Tags
facilities-support-services, department-of-energy, la, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $2.00 billion to FLUOR FEDERAL PETROLEUM OPERATIONS, LLC. IGF::OT::IGF MANAGEMENT AND OPERATION OF THE STRATEGIC PETROLEUM RESERVE FACILITIES.
Who is the contractor on this award?
The obligated recipient is FLUOR FEDERAL PETROLEUM OPERATIONS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $2.00 billion.
What is the period of performance?
Start: 2014-04-01. End: 2025-12-31.
What is the specific breakdown of costs within the Cost Plus Award Fee structure, and how are award fees determined?
The specific cost breakdown and the criteria for determining award fees are not detailed in the provided data. Understanding these elements is crucial for assessing the contractor's incentives and the overall value proposition. Further analysis would require access to the contract's detailed terms and performance metrics.
What are the key performance indicators (KPIs) for the Strategic Petroleum Reserve facilities management, and how is Fluor Federal performing against them?
Key performance indicators for SPR facilities management typically include operational uptime, safety incident rates, environmental compliance, and response times to emergencies. Performance against these KPIs would be detailed in contract performance reports, which are not provided here. Assessing Fluor Federal's performance requires reviewing these specific metrics and any associated award fee adjustments.
How does the annual cost of managing the SPR facilities under this contract compare to historical costs or industry benchmarks for similar operations?
Direct comparison to historical costs or industry benchmarks is challenging without detailed cost data and specific operational scope definitions. The provided annual value of approximately $200 million reflects the complexity and scale of managing the SPR. A thorough benchmark analysis would require detailed cost-element data and comparison with other large-scale energy infrastructure management contracts.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DE-SOL-0003490
Offers Received: 5
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Fluor Corporation
Address: 850 S CLEARVIEW PKWY, NEW ORLEANS, LA, 70123
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,365,483,092
Exercised Options: $3,365,483,092
Current Obligation: $1,996,329,703
Actual Outlays: $866,453,533
Subaward Activity
Number of Subawards: 1881
Total Subaward Amount: $1,541,563,193
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-04-01
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2026-01-13
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