DoD's $43.3M Gasoline Contract with Okinawa Idemitsu K.K. Awarded Under Full and Open Competition
Contract Overview
Contract Amount: $43,289,558 ($43.3M)
Contractor: Okinawa Idemitsu K.K.
Awarding Agency: Department of Defense
Start Date: 2023-06-12
End Date: 2023-07-31
Contract Duration: 49 days
Daily Burn Rate: $883.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: 8509947339!GASOLINE, AUTOMOTIVE
Plain-Language Summary
Department of Defense obligated $43.3 million to OKINAWA IDEMITSU K.K. for work described as: 8509947339!GASOLINE, AUTOMOTIVE Key points: 1. Contract Value: $43.3 million for automotive gasoline. 2. Competition: Awarded via full and open competition, suggesting market availability. 3. Risk: Fixed Price with Economic Price Adjustment introduces potential cost volatility. 4. Sector: Petroleum Refineries (NAICS 324110) is a critical support sector for defense operations.
Value Assessment
Rating: good
The contract value of $43.3 million for automotive gasoline appears reasonable given the duration and the nature of fuel procurement. Benchmarking against similar large-scale fuel contracts would provide a more precise assessment.
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 likely participated. This method generally promotes competitive pricing and ensures the government receives fair market value.
Taxpayer Impact: Full and open competition is expected to yield a cost-effective outcome for taxpayers by leveraging market forces to drive down prices.
Public Impact
Ensures fuel availability for Department of Defense operations in Okinawa. Supports military readiness and logistical capabilities in the region. Potential for price fluctuations due to economic price adjustment clause.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) can lead to cost overruns if fuel prices rise significantly.
- Dependence on a single supplier for a critical commodity in a specific region.
Positive Signals
- Awarded through full and open competition, maximizing potential for competitive pricing.
- Contract supports essential operational needs for the DoD.
Sector Analysis
The Petroleum Refineries sector (NAICS 324110) is vital for supplying fuel to government operations. Spending in this sector is subject to global commodity prices and geopolitical factors.
Small Business Impact
This contract does not appear to have specific set-asides for small businesses. The nature of large-scale fuel procurement often favors established, larger suppliers.
Oversight & Accountability
The Defense Logistics Agency is responsible for managing this contract. Oversight should focus on monitoring fuel price fluctuations and ensuring compliance with the economic price adjustment terms.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) risk
- Potential for price volatility
- Geographic concentration of supply
Tags
petroleum-refineries, department-of-defense, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $43.3 million to OKINAWA IDEMITSU K.K.. 8509947339!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 $43.3 million.
What is the period of performance?
Start: 2023-06-12. End: 2023-07-31.
What is the historical price trend for automotive gasoline in the Okinawa region over the contract period?
Analyzing historical price trends for automotive gasoline in Okinawa is crucial for understanding the potential impact of the economic price adjustment clause. Significant price volatility could lead to the government paying substantially more than initially anticipated, impacting the overall value proposition of this contract and potentially exceeding budget allocations if not managed proactively.
What are the specific triggers and limits for the economic price adjustment in this contract?
Understanding the specific triggers and limits for the economic price adjustment is vital for risk assessment. This includes knowing the baseline price, the index or formula used for adjustment, and any caps or floors on price changes. Without this information, it's difficult to quantify the potential financial risk to the government and assess if the contract terms adequately protect taxpayer interests against extreme market fluctuations.
How does the unit price compare to similar fuel contracts awarded by the DoD in other Pacific regions?
Benchmarking the unit price against similar fuel contracts awarded by the DoD in other Pacific regions is essential for evaluating cost-effectiveness. This comparison helps determine if the pricing is competitive and reflects fair market value, considering regional economic factors and logistical costs. Significant deviations could indicate potential inefficiencies in the procurement process or unique market conditions.
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: $43,289,558
Exercised Options: $43,289,558
Current Obligation: $43,289,558
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE60521D1004
IDV Type: IDC
Timeline
Start Date: 2023-06-12
Current End Date: 2023-07-31
Potential End Date: 2023-07-31 00:00:00
Last Modified: 2024-06-13
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