Heating fuel oil contract for Plum Island Animal Disease Center awarded to Naughton Energy Corp for over $10 million

Contract Overview

Contract Amount: $10,082,977 ($10.1M)

Contractor: Naughton Energy Corp

Awarding Agency: Department of Homeland Security

Start Date: 2007-01-04

End Date: 2011-04-30

Contract Duration: 1,577 days

Daily Burn Rate: $6.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DIVISION: OFFICE OF NATIONAL LABORATORIES PPA: LABORATORY FACILITIES THRUST: OPERATIONS PROGRAM: PLUM ISLAND ANIMAL DISEASE CENTER (PIADC) OPERATIONS PROJECT: PLUM ISLAND ANIMAL DISEASE CENTER (PIADC) OPERATIONS PERFORMER: NAUGHTON ENERGY CORP DESCRIPTION: HEATING FUEL OIL FOR PLUM ISLAND

Place of Performance

Location: ORIENT, SUFFOLK County, NEW YORK, 11957

State: New York Government Spending

Plain-Language Summary

Department of Homeland Security obligated $10.1 million to NAUGHTON ENERGY CORP for work described as: DIVISION: OFFICE OF NATIONAL LABORATORIES PPA: LABORATORY FACILITIES THRUST: OPERATIONS PROGRAM: PLUM ISLAND ANIMAL DISEASE CENTER (PIADC) OPERATIONS PROJECT: PLUM ISLAND ANIMAL DISEASE CENTER (PIADC) OPERATIONS PERFORMER: NAUGHTON ENERGY CORP DESCRIPTION: HEATING FUEL OIL FOR PL… Key points: 1. Contract awarded without competition, raising questions about potential cost savings and market fairness. 2. The contract duration of over four years suggests a long-term need for heating fuel at the facility. 3. The fixed-price contract type offers cost certainty but may limit flexibility if market prices fluctuate significantly. 4. The sole performer, Naughton Energy Corp, may indicate a lack of readily available or qualified alternative suppliers for this specific need. 5. The contract's value, exceeding $10 million, warrants scrutiny to ensure it represents a reasonable expenditure for heating fuel. 6. The absence of small business participation suggests this contract was not specifically targeted for small business set-asides.

Value Assessment

Rating: questionable

The contract value of approximately $10 million over four years for heating fuel oil is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition could potentially lead to higher costs for the government compared to a scenario with multiple bidders vying for the contract. Further analysis would be needed to determine if the price paid was fair and reasonable given the market conditions at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The specific reasons for this determination are not provided in the data, but it suggests that either only one vendor was capable of meeting the requirement, or the agency determined that a sole-source procurement was justified. The lack of competition means there was no opportunity for multiple vendors to bid, which typically drives down prices and increases the government's options.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without bids from multiple suppliers, there is less assurance that the government secured the best possible price for the heating fuel oil.

Public Impact

The primary beneficiary is the Department of Homeland Security, specifically the Plum Island Animal Disease Center (PIADC), ensuring operational continuity. The service delivered is the provision of heating fuel oil, essential for maintaining the facility's climate control and operational capabilities. The geographic impact is localized to Plum Island, New York, where the PIADC is situated. There are no direct workforce implications mentioned, as this is a contract for goods rather than services requiring direct labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competed contract.
The sole-source nature of the award limits transparency into the pricing justification.
The extended duration of the contract could expose the government to price volatility if market conditions change unfavorably.

Positive Signals

The contract ensured a consistent supply of a critical resource (heating fuel oil) for a vital government facility.
The firm fixed-price structure provided budget certainty for the duration of the contract.
The award was made to Naughton Energy Corp, a known entity in the heating fuel sector.

Sector Analysis

The procurement of heating fuel oil falls under the broader energy and utilities sector, specifically within the supply of essential commodities for government operations. The market for heating oil can be influenced by global energy prices, regional supply and demand, and geopolitical factors. While specific benchmarks for government heating oil contracts are not readily available, the value of this contract suggests a significant operational requirement for the PIADC. Comparable spending would involve other government facilities in similar climates requiring bulk fuel supply.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting plans. Therefore, it did not directly benefit small businesses through this specific award, nor does it appear to have implications for their participation in subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would fall under the Department of Homeland Security's procurement and contracting offices. As a sole-source award, the justification and pricing would have undergone internal review. Transparency is limited due to the lack of public competition. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Homeland Security Operations
Plum Island Animal Disease Center (PIADC) Operations
Laboratory Facilities Maintenance
Heating Fuel Supply Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpayment
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $10.1 million to NAUGHTON ENERGY CORP. DIVISION: OFFICE OF NATIONAL LABORATORIES PPA: LABORATORY FACILITIES THRUST: OPERATIONS PROGRAM: PLUM ISLAND ANIMAL DISEASE CENTER (PIADC) OPERATIONS PROJECT: PLUM ISLAND ANIMAL DISEASE CENTER (PIADC) OPERATIONS PERFORMER: NAUGHTON ENERGY CORP DESCRIPTION: HEATING FUEL OIL FOR PLUM ISLAND

Who is the contractor on this award?

The obligated recipient is NAUGHTON ENERGY CORP.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $10.1 million.

What is the period of performance?

Start: 2007-01-04. End: 2011-04-30.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and was a 'sole-source' award. However, the specific justification for this determination is not detailed. Typically, sole-source awards are made when only one responsible source is available or capable of providing the required goods or services, or when there is a compelling urgency that precludes full and open competition. Without further documentation from the Department of Homeland Security, the precise rationale remains unknown. This lack of competition raises concerns about whether the government explored all available options and secured the best possible value.

How does the per-unit cost of this heating fuel oil compare to market rates during the contract period (2007-2011)?

The provided data does not include the per-unit cost of the heating fuel oil, only the total contract value of $10,008,297.63. Therefore, a direct comparison to market rates during the contract period (January 4, 2007, to April 30, 2011) cannot be made. To perform such an analysis, one would need the quantity of fuel oil purchased under the contract and the corresponding price per unit. Market data for heating oil prices during that period would then be required to assess if the government's price was competitive.

What is the track record of Naughton Energy Corp in supplying heating fuel to government entities?

The data indicates that Naughton Energy Corp was awarded this contract for heating fuel oil. However, it does not provide information on their broader track record, such as the number of previous government contracts, their performance history on those contracts, or their overall experience in the energy sector. To assess their track record, a search of federal procurement databases (like FPDS or SAM.gov) would be necessary to identify other contracts awarded to Naughton Energy Corp, their values, durations, and any performance evaluations or past performance questionnaires.

What were the primary risks associated with this contract, and how were they managed?

Key risks associated with this contract likely included price volatility of heating fuel oil, potential supply disruptions, and the risk of overpaying due to the lack of competition. The firm fixed-price (FFP) contract type mitigates the risk of price increases for the government if market prices rise, but it could lead to the contractor realizing higher profits if prices fall. The sole-source nature of the award inherently carries a risk of not achieving the best value. Management of these risks would typically involve thorough price analysis by the contracting officer, clear contract terms, and monitoring of contractor performance and market conditions, though specifics are not detailed here.

How does this contract's value compare to other federal spending on heating fuel or energy for similar facilities?

The total contract value of approximately $10 million over four years for heating fuel oil at the Plum Island Animal Disease Center is a significant expenditure. Without access to a comprehensive database of similar federal contracts for heating fuel at comparable facilities (e.g., other research centers, isolated government installations), a direct comparison is challenging. However, the value suggests a substantial and continuous need for fuel. To benchmark effectively, one would need to identify contracts for similar quantities and types of fuel, awarded during a similar timeframe, to facilities of comparable size and operational requirements.

Industry Classification

NAICS: Retail Trade › Direct Selling Establishments › Heating Oil Dealers

Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: RR 940, POCONO PINES, PA, 08

Business Categories: Asian Pacific American Owned Business, Category Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $10,082,977

Exercised Options: $10,082,977

Current Obligation: $10,082,977

Contract Characteristics

Cost or Pricing Data: NO

Timeline