Defense Department Awards $18.9M for Fuel Storage Buildings, Awarded to Santa Fe Pacific Pipelines Inc

Contract Overview

Contract Amount: $18,901,704 ($18.9M)

Contractor: Sfpp, LP

Awarding Agency: Department of Defense

Start Date: 1998-02-24

End Date: 2018-10-03

Contract Duration: 7,526 days

Daily Burn Rate: $2.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199812!97AS!6095!0600 !DEFENSE FUEL SUPPLY CENTER !SP060098C5858 !A!*!* !19980224!20031231!028602381!063624324!927824730!N!0RU52!SANTA FE PACIFIC PIPELINES INC!1100 W TOWN AND COUNTRY R !ORANGE !CA!92868!11530!037!06!CARSON !LOS ANGELES !CALIFORNIA!0001!+000004812500!N!Y!000004812500!X173!LEASE/FUEL STORAGE BUILDINGS !S1 !SERVICES !4000!NOT DISCERNABLE OR CLASSIFIED !4226!3!*!*!*!B!B!*!A !N!J!2!001!B!* !C!N!Z!* !* !N!C!*!C!C!A!A!A!*!* !*!N!A!A!N!*!*!*!*!*!

Place of Performance

Location: ORANGE, ORANGE County, CALIFORNIA, 92868

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.9 million to SFPP, LP for work described as: 199812!97AS!6095!0600 !DEFENSE FUEL SUPPLY CENTER !SP060098C5858 !A!*!* !19980224!20031231!028602381!063624324!927824730!N!0RU52!SANTA FE PACIFIC PIPELINES INC!1100 W TOWN AND COUNTRY R !ORANGE !CA!92868!11530!037!06!CARSON !LOS AN… Key points: 1. The contract for Lease/Fuel Storage Buildings was awarded to SANTA FE PACIFIC PIPELINES INC. 2. This is a significant award for warehousing and storage services within the Defense sector. 3. The contract duration is unusually long at 7526 days, raising questions about flexibility and potential cost overruns. 4. The use of 'Full and Open Competition' suggests a competitive bidding process, but the specific pricing strategy needs further review.

Value Assessment

Rating: fair

The contract value of $18.9 million over approximately 20 years represents a substantial investment. Benchmarking against similar long-term infrastructure leases for fuel storage is difficult without more specific details on the scope of services and asset condition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that multiple bidders were likely considered. This method generally promotes price discovery, but the long duration may have influenced bid strategies and final pricing.

Taxpayer Impact: The long-term nature of this contract means taxpayers are committed to a significant expenditure over two decades, necessitating careful monitoring of performance and costs.

Public Impact

Ensures critical fuel storage infrastructure for the Department of Defense. Supports regional economic activity through the awarded contract. Long-term commitment may limit flexibility for future infrastructure needs or technological advancements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (20 years)
Potential for price escalation over the long term
Limited visibility into specific service requirements and performance metrics

Positive Signals

Awarded through full and open competition
Secures essential infrastructure for defense operations

Sector Analysis

This contract falls under the 'Other Warehousing and Storage' sector, specifically for fuel storage buildings. Defense spending in this area is crucial for logistical support and operational readiness, with benchmarks often tied to facility size, capacity, and duration of lease.

Small Business Impact

The data does not indicate any specific subcontracting goals or participation by small businesses in this contract. Further investigation would be needed to determine the extent of small business involvement.

Oversight & Accountability

The extended duration of this contract warrants robust oversight to ensure continued value and adherence to terms. Regular performance reviews and cost audits are essential for accountability.

Related Government Programs

Other Warehousing and Storage
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Long contract duration (20 years)
Potential for cost overruns due to extended term
Risk of infrastructure obsolescence
Limited detail on performance standards
Uncertainty regarding price adjustments over two decades

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to SFPP, LP. 199812!97AS!6095!0600 !DEFENSE FUEL SUPPLY CENTER !SP060098C5858 !A!*!* !19980224!20031231!028602381!063624324!927824730!N!0RU52!SANTA FE PACIFIC PIPELINES INC!1100 W TOWN AND COUNTRY R !ORANGE !CA!92868!11530!037!06!CARSON !LOS ANGELES !CALIFORNIA!0001!+000004812500!N!Y!000004812500!X173!LEASE/FUEL STORAGE BUILDINGS !S1 !SERVICES !4000!NOT DISCERNABLE OR CLASSIFIED !4226!3!*!*!*!B!B!*!A !N!J!2!0

Who is the contractor on this award?

The obligated recipient is SFPP, LP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.9 million.

What is the period of performance?

Start: 1998-02-24. End: 2018-10-03.

What specific performance metrics are in place to ensure the value of the fuel storage buildings lease over its 20-year term?

The provided data does not detail specific performance metrics. A thorough review of the contract's statement of work and performance work statement would be necessary to identify these. Key metrics would likely include facility maintenance standards, environmental compliance, security protocols, and response times for any required services.

Given the 20-year duration, what mechanisms are in place to mitigate risks associated with potential infrastructure obsolescence or changing fuel storage technologies?

The long duration presents a risk of obsolescence. Mitigation strategies could include clauses for periodic review and upgrade, flexibility in adapting to new technologies, or performance-based incentives tied to modernization. Without specific contract language, it's difficult to assess the effectiveness of these potential safeguards.

How does the 'Firm Fixed Price' contract type ensure cost-effectiveness for the government over such an extended period, considering potential market fluctuations?

A Firm Fixed Price (FFP) contract aims to provide cost certainty. However, over a 20-year term, market fluctuations in materials, labor, and energy could significantly impact the contractor's costs, potentially leading to reduced profit margins or, if poorly structured, opportunities for the contractor to seek adjustments. The initial pricing strategy and any escalation clauses are critical.

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: SP060098R0025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kinder Morgan Inc (UEI: 800408192)

Address: 1100 W TOWN AND COUNTRY RD, ORANGE, CA, 92868

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline