Department of Defense awards $47.1M for automotive gasoline, with a 98% prime contractor performance score

Contract Overview

Contract Amount: $47,139,033 ($47.1M)

Contractor: Okinawa Idemitsu K.K.

Awarding Agency: Department of Defense

Start Date: 2022-09-13

End Date: 2022-10-31

Contract Duration: 48 days

Daily Burn Rate: $982.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: 8509385737!GASOLINE, AUTOMOTIVE

Plain-Language Summary

Department of Defense obligated $47.1 million to OKINAWA IDEMITSU K.K. for work described as: 8509385737!GASOLINE, AUTOMOTIVE Key points: 1. The contract's fixed-price structure with economic price adjustment offers some cost certainty while allowing for market fluctuations. 2. A high prime contractor performance score suggests a reliable vendor, potentially mitigating delivery and quality risks. 3. The relatively short duration of the delivery order indicates a specific, immediate need for fuel supplies. 4. Competition was robust, suggesting fair market pricing was likely achieved. 5. The contract falls under the Petroleum Refineries industry, a critical support function for military operations.

Value Assessment

Rating: good

The awarded amount of $47.1 million for automotive gasoline appears reasonable given the context of military fuel procurement. Benchmarking against similar fuel contracts is challenging without more specific details on volume, grade, and delivery locations. However, the high performance score of 98.2% for the prime contractor suggests good value delivery in terms of meeting contractual obligations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the designation suggests a competitive environment that should drive price discovery and ensure fair market value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality goods and services.

Public Impact

Military personnel and operations in the Okinawa region will benefit from the reliable supply of automotive gasoline. The contract ensures the availability of essential fuel for vehicles and equipment, supporting readiness. The geographic impact is localized to Okinawa, Japan, where the Department of Defense maintains a significant presence. This contract supports the logistics and operational readiness of the U.S. Forces Japan.

Waste & Efficiency Indicators

Waste Risk Score: 98 / 10

Warning Flags

Potential for price volatility due to the economic price adjustment clause, though mitigated by fixed-price elements.
Dependence on a single prime contractor for delivery, although performance history is strong.

Positive Signals

High prime contractor performance score (98.2%) indicates reliability and quality.
Awarded under full and open competition, suggesting a competitive pricing environment.
Fixed-price component provides a baseline cost control.

Sector Analysis

This contract falls within the broader energy sector, specifically focusing on the procurement of refined petroleum products. The market for automotive fuels is typically characterized by global supply chains and fluctuating commodity prices. Defense logistics often require specialized procurement strategies to ensure reliable supply in diverse operational environments, and this contract represents a typical instance of such procurement to support overseas installations.

Small Business Impact

Information regarding small business participation, set-asides, or subcontracting plans was not provided in the data. As this appears to be a direct delivery order for a commodity, the direct involvement of small businesses may be limited unless they are suppliers to the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA), which is responsible for providing logistics support to the U.S. Armed Forces. DLA has established procedures for contract administration, performance monitoring, and dispute resolution. Transparency is generally maintained through contract award databases, though specific details of performance may be internal.

Related Government Programs

Defense Fuel Support Center Contracts
Overseas Fuel Procurement
Automotive and Heavy Equipment Fuel Supply

Risk Flags

Economic Price Adjustment Clause
Short Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.1 million to OKINAWA IDEMITSU K.K.. 8509385737!GASOLINE, AUTOMOTIVE

Who is the contractor on this award?

The obligated recipient is OKINAWA IDEMITSU K.K..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $47.1 million.

What is the period of performance?

Start: 2022-09-13. End: 2022-10-31.

What is the specific grade and type of automotive gasoline procured under this contract?

The provided data indicates 'GASOLINE, AUTOMOTIVE' but does not specify the exact grade (e.g., octane rating) or type (e.g., leaded/unleaded, blend components). Military fuel specifications can be highly detailed to meet operational requirements in various climates and conditions. Further details would likely be found in the contract's statement of work or technical specifications, which are not publicly available in this data snippet. Understanding the specific grade is crucial for accurate cost benchmarking and assessing suitability for intended use.

How does the economic price adjustment (EPA) clause function in this contract?

The economic price adjustment (EPA) clause in this fixed-price contract allows for adjustments to the contract price based on fluctuations in specific economic factors, typically related to the cost of raw materials or labor. For automotive gasoline, this likely ties to the price of crude oil or refined product indices. The exact formula and indices used for adjustment would be detailed in the contract's terms and conditions. This clause aims to protect both the contractor from unforeseen cost increases and the government from excessive pricing if market conditions improve, though it introduces some price uncertainty compared to a firm fixed price.

What factors contributed to the prime contractor's high performance score of 98.2%?

A prime contractor performance score of 98.2% suggests a very high level of satisfaction with the contractor's delivery and service. While the specific metrics are not detailed, such scores typically reflect on-time delivery, adherence to quality standards, responsiveness to inquiries, accurate invoicing, and overall compliance with contract terms. For a fuel delivery contract, meeting delivery schedules and providing fuel that meets all technical specifications would be paramount. This high score indicates the contractor, OKINAWA IDEMITSU K.K., has consistently met or exceeded expectations.

What is the typical duration for similar fuel delivery contracts awarded by the Defense Logistics Agency in overseas locations?

The duration of fuel delivery contracts can vary significantly based on the specific needs and strategic planning of the Defense Logistics Agency (DLA). This particular contract has a short duration, with an effective start date of September 13, 2022, and an end date of October 31, 2022, indicating a delivery order likely fulfilling an immediate or short-term requirement. Longer-term requirements might be met through indefinite-delivery/indefinite-quantity (IDIQ) contracts or longer-duration fixed-price contracts, often spanning several years with options. The short duration here suggests a tactical or opportunistic procurement.

Are there any known issues or past performance concerns with OKINAWA IDEMITSU K.K. regarding Department of Defense contracts?

Based on the provided data, which includes a high performance score of 98.2%, there are no immediate indications of significant past performance concerns with OKINAWA IDEMITSU K.K. for this specific contract. High performance scores generally reflect positively on the contractor's track record. However, a comprehensive assessment would require reviewing a broader history of their contracts with the Department of Defense and other government agencies, including any past disputes, terminations, or negative performance reviews that might not be captured in a single contract's summary data.

Industry Classification

NAICS: Manufacturing › Petroleum and Coal Products Manufacturing › Petroleum Refineries

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

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: Idemitsu Kosan CO.,Ltd.

Address: 843-2, WAUKE, NAKAGUSUKUSON, NAKAGAMI-GUN

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $47,139,033

Exercised Options: $47,139,033

Current Obligation: $47,139,033

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60521D1004

IDV Type: IDC

Timeline