DoD awards $28.4M for Kabul fuel storage, but foreign awardees remain undisclosed

Contract Overview

Contract Amount: $28,416,405 ($28.4M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2011-03-21

End Date: 2016-08-20

Contract Duration: 1,979 days

Daily Burn Rate: $14.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AWARD OF 104,875 BARRELS OF SHELL CAPACITY STORAGE FOR JP8 WITHIN 50 MILES OF KABUL, AFGHANISTAN

Plain-Language Summary

Department of Defense obligated $28.4 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: AWARD OF 104,875 BARRELS OF SHELL CAPACITY STORAGE FOR JP8 WITHIN 50 MILES OF KABUL, AFGHANISTAN Key points: 1. Contract awarded via full and open competition, suggesting a broad market search. 2. The contract duration of nearly 2000 days indicates a long-term need for the service. 3. The firm-fixed-price structure aims to control costs for the government. 4. The undisclosed foreign awardees raise transparency concerns regarding contractor vetting. 5. The service is critical for logistical support in a high-risk operational environment. 6. The contract value is substantial, reflecting the scale and importance of fuel logistics.

Value Assessment

Rating: fair

The total award of $28.4 million over approximately five years for fuel storage capacity near Kabul appears to be a significant investment. Benchmarking this specific service is challenging due to the unique operational context and the undisclosed nature of the foreign awardees. However, the firm-fixed-price contract type suggests an attempt to manage costs predictably. Without more information on the per-barrel cost or comparable market rates in similar operational theaters, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Defense Logistics Agency sought proposals from all responsible sources. The data shows two bids were received. While the number of bidders is low, the 'full and open' designation suggests an effort to maximize competition. The limited number of bids could be due to the specialized nature of the service, the geographic location, or security requirements.

Taxpayer Impact: A full and open competition, even with a limited number of bids, generally provides better price discovery than a sole-source award, potentially leading to more favorable pricing for taxpayers. However, the undisclosed nature of the awardees limits the ability to assess if the best possible value was achieved.

Public Impact

The primary beneficiaries are U.S. military operations in and around Kabul, Afghanistan, ensuring a consistent fuel supply. The service delivered is the storage of 104,875 barrels of JP8 fuel. The geographic impact is localized to the area within 50 miles of Kabul, Afghanistan. This contract supports the logistical backbone of military operations, indirectly impacting the workforce deployed in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the identity of foreign awardees raises concerns about due diligence and potential risks.
The operational environment in Afghanistan presents inherent security and logistical challenges that could impact contract performance.
The limited number of bids received could indicate potential market limitations or barriers to entry for other qualified contractors.

Positive Signals

Awarded under full and open competition, suggesting an attempt to leverage market forces for best value.
The firm-fixed-price contract type provides cost certainty for the government.
The service addresses a critical logistical requirement for military operations in a key theater.

Sector Analysis

This contract falls within the Warehousing and Storage sector, specifically related to fuel logistics for defense operations. The market for specialized fuel storage in austere or high-risk environments is niche, often dominated by a limited number of experienced providers. Comparable spending benchmarks are difficult to establish due to the unique geopolitical context and the specific nature of the commodity (military-grade fuel). The Defense Logistics Agency frequently procures such services to maintain operational readiness.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). There is no information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem for this particular award appears minimal, as it was likely fulfilled by larger, specialized entities capable of operating in the specified region.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Department of Defense and the Defense Logistics Agency. Given the operational context in Afghanistan, multiple layers of oversight, including military command structures and potentially Inspector General investigations, would be expected. Transparency is limited by the undisclosed nature of the foreign awardees, making direct public accountability challenging. The firm-fixed-price nature of the contract provides some level of financial oversight.

Related Government Programs

Defense Logistics Agency Fuel Procurement
Military Fuel Storage Contracts
Logistics Support in Afghanistan
JP8 Fuel Supply Chain
Contingency Contracting

Risk Flags

Undisclosed Foreign Awardees
Limited Competition Bidders
Operational Environment Risks (Afghanistan)
Transparency Concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.4 million to FOREIGN AWARDEES (UNDISCLOSED). AWARD OF 104,875 BARRELS OF SHELL CAPACITY STORAGE FOR JP8 WITHIN 50 MILES OF KABUL, AFGHANISTAN

Who is the contractor on this award?

The obligated recipient is FOREIGN AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.4 million.

What is the period of performance?

Start: 2011-03-21. End: 2016-08-20.

What specific criteria were used to vet the undisclosed foreign awardees, and what are the associated risks?

The provided data does not specify the vetting criteria for the undisclosed foreign awardees. Typically, vetting processes for contractors operating in high-risk environments involve checks for financial stability, past performance, security clearances, and compliance with international regulations. The lack of transparency regarding these awardees presents a risk, as it hinders independent assessment of their suitability and potential vulnerabilities. Risks could include inadequate security measures, potential for corruption, or non-compliance with U.S. standards, which could jeopardize the fuel supply chain and operational security.

How does the cost per barrel for this storage contract compare to industry benchmarks or similar contracts in other regions?

A precise cost per barrel benchmark is not calculable from the provided data, as the award amount ($28.4M) covers the storage of 104,875 barrels over a period of approximately 1979 days (roughly 5.4 years). This equates to an average annual cost of approximately $5.2 million for storing the full capacity. To establish a cost per barrel, one would need to know the utilization rate and the duration for which the full capacity was maintained. Furthermore, comparing this to industry benchmarks is difficult due to the unique operational context (Afghanistan), the specific fuel type (JP8), and the security requirements inherent in such a contract. Contracts in austere or conflict zones typically command higher prices than those in stable, domestic locations.

What is the historical spending pattern for fuel storage services by the Defense Logistics Agency in Afghanistan?

The provided data focuses on a single definitive contract awarded in 2011. To assess historical spending patterns, a broader analysis of DLA's contracting data for fuel storage in Afghanistan over multiple years would be necessary. This would involve querying databases for similar contracts, examining award amounts, contract types, durations, and awardees. Without this broader dataset, it's impossible to determine if this $28.4 million award represents a typical, increased, or decreased level of spending for such services in the region during that period. Trends could be influenced by troop levels, operational tempo, and geopolitical stability.

What are the potential performance risks associated with storing fuel in the specified geographic area near Kabul?

Storing fuel near Kabul presents several performance risks. These include security threats such as sabotage, theft, or damage from conflict. Environmental risks, such as extreme temperatures or potential contamination, could affect fuel quality. Logistical challenges related to transportation, access, and maintenance of the storage facilities in a potentially unstable region are also significant. Furthermore, the reliance on undisclosed foreign awardees introduces a layer of uncertainty regarding their operational capacity, adherence to safety protocols, and ability to maintain uninterrupted service under adverse conditions.

Given the firm-fixed-price contract type, what mechanisms are in place to ensure the contractor meets performance standards?

Even with a firm-fixed-price (FFP) contract, performance standards are typically enforced through contract clauses that define deliverables, quality requirements, and delivery schedules. The government, represented by the contracting officer and potentially a contract quality assurance representative, monitors the contractor's performance against these defined standards. If the contractor fails to meet these requirements, the government can take actions ranging from issuing cure notices to withholding payment, imposing penalties, or even terminating the contract for default. Inspection and acceptance of the stored fuel would be critical checkpoints.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage

Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060011R0507

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $34,800,000

Exercised Options: $28,416,405

Current Obligation: $28,416,405

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline