DoD's $38M Gasoline Contract with OKINAWA IDEMITSU K.K. Awarded via Full and Open Competition

Contract Overview

Contract Amount: $38,118,393 ($38.1M)

Contractor: Okinawa Idemitsu K.K.

Awarding Agency: Department of Defense

Start Date: 2023-03-14

End Date: 2023-04-29

Contract Duration: 46 days

Daily Burn Rate: $828.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: 8509759886!GASOLINE, AUTOMOTIVE

Plain-Language Summary

Department of Defense obligated $38.1 million to OKINAWA IDEMITSU K.K. for work described as: 8509759886!GASOLINE, AUTOMOTIVE Key points: 1. Spending on automotive gasoline is a recurring operational need for the Department of Defense. 2. The contract was awarded through full and open competition, suggesting a competitive market. 3. Potential risks include fuel price volatility impacting the economic price adjustment clause. 4. This spending falls within the broader energy and logistics sectors supporting military operations.

Value Assessment

Rating: good

The contract value of $38.1 million for a 46-day period appears reasonable for bulk fuel procurement. Benchmarking against similar large-scale fuel contracts would provide a more precise assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The award was made under full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: The competitive nature of the award suggests taxpayers are likely benefiting from a market-driven price for this essential fuel.

Public Impact

Ensures fuel availability for military vehicles and operations in the Okinawa region. Supports the logistical readiness of the Department of Defense. The fixed price with economic price adjustment allows for market fluctuations in fuel costs.

Waste & Efficiency Indicators

Waste Risk Score: 82 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns if fuel prices spike significantly.
Dependence on a single supplier for a critical commodity in a specific region.

Positive Signals

Awarded through full and open competition.
Addresses a critical operational need for the DoD.
Fixed price component provides some cost certainty.

Sector Analysis

This contract falls under the energy sector, specifically the procurement of petroleum products. Defense Logistics Agency regularly procures fuel to maintain operational readiness, with spending benchmarks varying based on global market prices and geopolitical factors.

Small Business Impact

The data does not indicate if small businesses were involved in this specific contract, either as prime contractors or subcontractors. Large-scale fuel procurement often involves major energy corporations.

Oversight & Accountability

The contract was awarded by the Defense Logistics Agency, a key component of DoD oversight for supply chain management. The use of full and open competition suggests adherence to standard procurement regulations.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Fuel price volatility
Geopolitical instability affecting supply chains
Dependence on specific geographic regions for critical resources
Potential for contract modifications due to changing operational needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.1 million to OKINAWA IDEMITSU K.K.. 8509759886!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 $38.1 million.

What is the period of performance?

Start: 2023-03-14. End: 2023-04-29.

What is the historical price trend for automotive gasoline in the Okinawa region over the contract period?

Analyzing historical price data for automotive gasoline in Okinawa during the contract period (March-April 2023) would reveal the actual impact of the economic price adjustment. This would help determine if the adjustment mechanism effectively tracked market fluctuations or led to unexpected cost increases for the government.

What was the competitive landscape like for this solicitation?

Understanding the number of bids received and the range of pricing offered would provide deeper insight into the effectiveness of the full and open competition. A high number of competitive bids suggests robust market interest and potentially better price discovery, while few bids might indicate market limitations or specific solicitation requirements.

How does the per-gallon cost compare to similar DoD fuel contracts in other Pacific regions?

Benchmarking the per-gallon cost against similar contracts in comparable geographic locations within the Pacific theater is crucial for assessing value. Differences could be attributed to logistical costs, regional market dynamics, or specific contract terms, but significant deviations warrant further investigation into cost-effectiveness.

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: $38,118,393

Exercised Options: $38,118,393

Current Obligation: $38,118,393

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60521D1004

IDV Type: IDC

Timeline