Department of State's $496M Fuel Management Contract Awarded to PAE Government Services, Inc

Contract Overview

Contract Amount: $496,420,028 ($496.4M)

Contractor: PAE Government Services, Inc.

Awarding Agency: Department of State

Start Date: 2014-03-01

End Date: 2026-09-30

Contract Duration: 4,596 days

Daily Burn Rate: $108.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: IGF::OT::IGF THE PERPONDERENCE OF THIS REQUIREMENT IS FOR FUEL MANAGEMENT AND SERVICES INCLUDING FUEL ACQUISITION TO VARIOUS DELIVERY POINTS. THIS REQUIREMENT ALSO INCLUDES PROGRAM MANAGEMENT

Plain-Language Summary

Department of State obligated $496.4 million to PAE GOVERNMENT SERVICES, INC. for work described as: IGF::OT::IGF THE PERPONDERENCE OF THIS REQUIREMENT IS FOR FUEL MANAGEMENT AND SERVICES INCLUDING FUEL ACQUISITION TO VARIOUS DELIVERY POINTS. THIS REQUIREMENT ALSO INCLUDES PROGRAM MANAGEMENT Key points: 1. Contract focuses on comprehensive fuel acquisition and management services across various delivery points. 2. Significant duration of the contract (over 12 years) suggests a long-term strategic need for these services. 3. The contract type, Fixed Price with Economic Price Adjustment, aims to balance cost certainty with market volatility. 4. Awarded under full and open competition, indicating a broad market search for the best value. 5. The North American Industry Classification System (NAICS) code 561210 points to facilities support services, a broad category. 6. The contract's value places it among substantial service agreements within the federal government. 7. The award to a single contractor, PAE Government Services, Inc., highlights their capability in managing complex logistical operations.

Value Assessment

Rating: good

The contract's total value of approximately $496 million over its extended period suggests a significant investment in fuel management. While specific performance metrics and cost breakdowns are not provided, the fixed-price with economic price adjustment structure is a common approach for services where input costs can fluctuate. Benchmarking this against similar large-scale fuel logistics contracts would be necessary for a definitive value-for-money assessment, but the duration and scope imply a recognized need and likely competitive pricing at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, signifying that the Department of State sought proposals from all responsible sources. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The fact that it was competed broadly suggests that the agency aimed to maximize price discovery and ensure they secured the most advantageous terms for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that is designed to drive down costs and ensure the government receives optimal value for its investment in essential fuel management services.

Public Impact

The primary beneficiaries are the Department of State's operations, ensuring a consistent and reliable supply of fuel for its various missions and facilities. Services delivered include fuel acquisition, management, and distribution to diverse delivery points, critical for maintaining operational readiness. The geographic impact is potentially widespread, covering all locations where the Department of State requires fuel support. Workforce implications may include direct employment by PAE Government Services, Inc. and its subcontractors, as well as indirect support for government personnel reliant on these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the economic price adjustment clause if fuel prices increase significantly beyond projections.
Dependence on a single contractor for a critical logistical function could pose risks if performance issues arise.
The long contract duration might lead to complacency or reduced innovation if not actively managed and overseen.

Positive Signals

Awarded through full and open competition, suggesting a robust evaluation process and selection of a capable provider.
The fixed-price component provides a baseline cost control, with adjustments only for specific economic factors.
The extensive duration indicates a stable, long-term partnership likely built on demonstrated performance and reliability.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of operational and maintenance services for government facilities. The fuel management aspect is a critical component of logistical support, essential for agencies operating globally or with extensive infrastructure. Comparable spending benchmarks would involve analyzing other large federal contracts for fuel acquisition, storage, and distribution, as well as broader facilities management agreements.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this contract (ss: false, sb: false). While PAE Government Services, Inc. may engage small businesses as subcontractors, there is no explicit requirement or focus on small business set-asides evident in the provided details. The impact on the small business ecosystem would depend on PAE's subcontracting strategy and opportunities they create.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and potential remedies for non-performance. Transparency is facilitated through contract awards databases, but detailed operational oversight information is generally not publicly disclosed.

Related Government Programs

Department of Defense Fuel Contracts
General Services Administration (GSA) Schedules for Fuel
Federal Aviation Administration (FAA) Fuel Purchases
Energy Department Fuel Procurement

Risk Flags

Long contract duration may increase exposure to market volatility and technological changes.
Dependence on a single contractor for critical fuel supply chain operations.
Economic Price Adjustment clause could lead to cost increases if fuel prices surge.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $496.4 million to PAE GOVERNMENT SERVICES, INC.. IGF::OT::IGF THE PERPONDERENCE OF THIS REQUIREMENT IS FOR FUEL MANAGEMENT AND SERVICES INCLUDING FUEL ACQUISITION TO VARIOUS DELIVERY POINTS. THIS REQUIREMENT ALSO INCLUDES PROGRAM MANAGEMENT

Who is the contractor on this award?

The obligated recipient is PAE GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $496.4 million.

What is the period of performance?

Start: 2014-03-01. End: 2026-09-30.

What is the historical spending trend for fuel management services by the Department of State prior to this contract?

Analyzing historical spending data for fuel management services by the Department of State is crucial for understanding the evolution of this requirement and the value proposition of the current contract. Without specific historical data, it's difficult to ascertain if the $496 million award represents an increase, decrease, or stable level of spending. However, federal agencies often consolidate requirements over time to achieve economies of scale and streamline operations. If previous contracts were fragmented or managed through different mechanisms, this large, consolidated award could indicate a strategic shift towards centralized management. Further investigation into prior contract vehicles, durations, and values would be necessary to establish a clear spending trend and assess if this contract aligns with or deviates from historical patterns.

How does the per-gallon cost of fuel acquired under this contract compare to market rates and other federal agencies?

Determining the per-gallon cost of fuel under this contract requires access to detailed delivery orders and pricing structures, which are not fully available in the provided summary. The contract's 'Fixed Price with Economic Price Adjustment' (FP-EPA) clause means the base price is fixed, but adjustments are made based on specific economic indicators, typically related to fuel market indices. To benchmark this, one would need to compare the adjusted per-gallon prices against relevant market indices (e.g., Platts, EIA data) and against per-gallon costs reported by other federal agencies for similar fuel types and delivery locations. Without this granular data, a precise comparison is not feasible, but the FP-EPA structure suggests an attempt to mitigate extreme price volatility while allowing for market-driven adjustments.

What are the key performance indicators (KPIs) used to evaluate PAE Government Services, Inc.'s performance under this contract?

Key Performance Indicators (KPIs) for a contract of this nature, focusing on fuel management and services, would likely revolve around reliability, timeliness, cost-effectiveness, and safety. Specific KPIs could include: on-time delivery rates to various locations, fuel quality assurance metrics, inventory management accuracy, adherence to safety protocols during handling and storage, and responsiveness to emergency fuel needs. The contract terms themselves would stipulate these KPIs and the associated performance standards. Failure to meet these KPIs could trigger contractual remedies, such as service level credits or even termination. The Department of State's contracting officer and technical representatives are responsible for monitoring these metrics and ensuring PAE meets its contractual obligations.

What is the track record of PAE Government Services, Inc. in managing large-scale fuel logistics contracts for the federal government?

PAE Government Services, Inc. has a significant track record in providing a wide array of support services to government agencies, including logistics and base operations support, which often encompass fuel management. Their experience typically spans complex, global operations, suggesting a capability to handle large-scale fuel acquisition, storage, and distribution. Evaluating their specific performance on similar fuel contracts would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract modifications, and the scale and complexity of previously managed fuel programs. Generally, winning large, competitively awarded contracts like this one indicates a positive assessment of their past performance and capabilities by the awarding agency.

What are the potential risks associated with the long duration (over 12 years) of this contract?

The extended duration of this contract, spanning from 2014 to 2026, presents several potential risks. Firstly, there's the risk of technological obsolescence; fuel management systems and delivery methods could evolve, potentially making the contracted services less efficient over time if the contractor does not proactively adapt. Secondly, long-term contracts can sometimes lead to contractor complacency, where the incentive to innovate or optimize processes diminishes due to the secured revenue stream. Thirdly, economic and geopolitical factors can change significantly over such a long period, potentially impacting fuel prices and availability in ways not fully anticipated at the outset, even with an economic price adjustment clause. Finally, there's the risk of vendor lock-in, making it difficult and costly to transition to a new provider if performance issues arise or if market conditions change drastically.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 1320 N COURTHOUSE RD STE 700, ARLINGTON, VA, 22201

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

Financial Breakdown

Contract Ceiling: $538,942,270

Exercised Options: $527,483,208

Current Obligation: $496,420,028

Actual Outlays: $84,672,237

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $22,575,450

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA13D0120

IDV Type: IDC

Timeline