DOD's $40.4M Gasoline Contract with OKINAWA IDEMITSU K.K. Awarded via Full and Open Competition

Contract Overview

Contract Amount: $40,379,308 ($40.4M)

Contractor: Okinawa Idemitsu K.K.

Awarding Agency: Department of Defense

Start Date: 2023-12-30

End Date: 2024-02-29

Contract Duration: 61 days

Daily Burn Rate: $662.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: 8510360628!GASOLINE, AUTOMOTIVE

Plain-Language Summary

Department of Defense obligated $40.4 million to OKINAWA IDEMITSU K.K. for work described as: 8510360628!GASOLINE, AUTOMOTIVE Key points: 1. The contract is for automotive gasoline, a critical fuel for military operations. 2. Competition was full and open, suggesting a competitive bidding process. 3. The fixed-price with economic price adjustment contract type introduces some risk due to fuel price volatility. 4. Spending is within the Petroleum Refineries sector, with a benchmark of $6.6M.

Value Assessment

Rating: good

The contract value of $40.4M for a 61-day period appears reasonable given the nature of fuel procurement for a large agency like the Department of Defense. Benchmarking against similar large-scale fuel contracts would provide further context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, indicating that multiple bidders were likely considered. This method generally promotes competitive pricing and ensures the government receives fair value.

Taxpayer Impact: The competitive award process aims to minimize taxpayer cost for essential fuel supplies.

Public Impact

Ensures consistent fuel supply for Department of Defense vehicles and operations in Okinawa. Supports military readiness by providing a critical resource. Potential for price fluctuations impacting the final cost to taxpayers due to economic price adjustment.

Waste & Efficiency Indicators

Waste Risk Score: 66 / 10

Warning Flags

Economic price adjustment clause introduces cost volatility risk.
Short contract duration may necessitate frequent re-competition and associated administrative costs.

Positive Signals

Awarded under full and open competition.
Procurement supports critical defense operations.

Sector Analysis

This contract falls under the Petroleum Refineries sector, specifically for fuel supply. The benchmark of $6.6M for this NAICS code suggests this is a significant, albeit short-term, procurement.

Small Business Impact

The data does not indicate any specific involvement or set-aside for small businesses in this particular contract award.

Oversight & Accountability

The Defense Logistics Agency is responsible for this procurement, and standard oversight procedures for fuel contracts are expected to be in place.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Economic Price Adjustment (EPA) risk
Short contract duration
Lack of small business participation noted
Geographic concentration of supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.4 million to OKINAWA IDEMITSU K.K.. 8510360628!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 $40.4 million.

What is the period of performance?

Start: 2023-12-30. End: 2024-02-29.

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

Analyzing historical gasoline prices in Okinawa during the contract period (December 2023 - February 2024) would help assess the impact of the economic price adjustment. Understanding market volatility and any specific regional factors influencing fuel costs is crucial for evaluating the fairness of the price adjustments and the overall value achieved.

What is the projected fuel consumption rate for the specified period?

Estimating the projected fuel consumption rate is vital for understanding the scale of the procurement and assessing the reasonableness of the $40.4M award. Comparing this rate against historical consumption or operational tempo data would highlight potential over or under-estimation, impacting both cost efficiency and operational readiness.

How does the per-gallon price compare to other government fuel contracts in similar geographic regions?

Benchmarking the per-gallon price against other government fuel contracts in similar geographic regions, particularly those with full and open competition and similar contract types, is essential. This comparison will reveal if the pricing is competitive and if taxpayers are receiving fair value for the gasoline procured.

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

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: $40,379,308

Exercised Options: $40,379,308

Current Obligation: $40,379,308

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60521D1004

IDV Type: IDC

Timeline