DoD's $16.4M Propane Contract Awarded to Suburban Propane Partners, L.P. Under Full and Open Competition
Contract Overview
Contract Amount: $16,407,939 ($16.4M)
Contractor: Suburban Propane Partners, L.P
Awarding Agency: Department of Defense
Start Date: 2009-05-13
End Date: 2014-05-14
Contract Duration: 1,827 days
Daily Burn Rate: $9.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: DELIVERY OF BULK PROPANE.
Place of Performance
Location: DUGWAY, TOOELE County, UTAH, 84022
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $16.4 million to SUBURBAN PROPANE PARTNERS, L.P for work described as: DELIVERY OF BULK PROPANE. Key points: 1. The contract for bulk propane delivery represents a significant expenditure in the chemical manufacturing sector. 2. Suburban Propane Partners, L.P. secured this contract through a competitive bidding process. 3. The fixed-price with economic price adjustment structure introduces potential cost volatility. 4. The contract duration of 1827 days suggests a long-term need for propane services by the Department of the Army.
Value Assessment
Rating: fair
The contract value of $16.4M over approximately 5 years suggests a moderate per-year spend. Benchmarking against similar bulk propane contracts would be necessary to fully assess pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a robust price discovery process. This method generally leads to more competitive pricing.
Taxpayer Impact: Taxpayer funds were utilized through a competitive process, aiming for the best value. The economic price adjustment clause could impact the final cost to taxpayers.
Public Impact
Ensures a consistent supply of a critical fuel source for military operations. Supports a large corporation, potentially impacting local economies where propane is sourced and delivered. The economic price adjustment clause means taxpayers could face higher costs if propane prices fluctuate significantly.
Waste & Efficiency Indicators
Waste Risk Score: 89 / 10
Warning Flags
- Economic price adjustment clause introduces cost uncertainty.
- Long contract duration may not reflect current market prices.
- Lack of specific unit cost data makes detailed analysis difficult.
Positive Signals
- Awarded through full and open competition.
- Ensures critical fuel supply.
- Contract awarded to a known entity in the sector.
Sector Analysis
This contract falls under the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' sector. Spending in this area is often tied to operational needs for fuel and essential materials. Benchmarks for bulk propane delivery contracts can vary widely based on volume, location, and market conditions.
Small Business Impact
The contract was awarded to Suburban Propane Partners, L.P., a large publicly traded company. There is no indication that small businesses were involved as prime contractors or significant subcontractors in this specific award.
Oversight & Accountability
The contract was awarded under full and open competition, suggesting a standard procurement process. Oversight would focus on delivery verification, adherence to contract terms, and management of the economic price adjustment.
Related Government Programs
- All Other Miscellaneous Chemical Product and Preparation Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Economic Price Adjustment (EPA) clause
- Long contract duration
- Lack of specific unit cost data
- Potential for market price volatility
Tags
all-other-miscellaneous-chemical-product, department-of-defense, ut, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.4 million to SUBURBAN PROPANE PARTNERS, L.P. DELIVERY OF BULK PROPANE.
Who is the contractor on this award?
The obligated recipient is SUBURBAN PROPANE PARTNERS, L.P.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $16.4 million.
What is the period of performance?
Start: 2009-05-13. End: 2014-05-14.
What was the average per-unit cost of propane under this contract, and how does it compare to market rates at the time of award and throughout the contract period?
The provided data does not include specific per-unit cost information, only the total contract value. To assess value, a detailed analysis of the economic price adjustment mechanism and historical propane market prices would be required. Without this, a direct comparison to market rates is not feasible, making a precise value assessment challenging.
What are the potential risks associated with the economic price adjustment (EPA) clause in this fixed-price contract, and how were they mitigated?
The primary risk of an EPA clause is cost escalation for the government if market prices for propane increase significantly. Mitigation strategies could include pre-defined caps on price adjustments, clear indexing mechanisms tied to reliable market data, and frequent reviews by the contracting officer. The specific mitigation measures employed are not detailed in the provided data.
How effectively did the full and open competition process ensure the best possible price and terms for the Department of Defense, considering the contract's duration and EPA clause?
Full and open competition generally promotes competitive pricing. However, the long duration (nearly 5 years) and the inclusion of an EPA clause introduce uncertainty. While competition likely secured a favorable initial price, the long-term cost to taxpayers is subject to market fluctuations. The effectiveness hinges on the specific terms of the EPA and the competitive bids received.
Industry Classification
NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing
Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 240 RTE 10 W, WHIPPANY, NJ, 11
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $18,703,279
Exercised Options: $18,703,279
Current Obligation: $16,407,939
Parent Contract
Parent Award PIID: GS07F0037T
IDV Type: FSS
Timeline
Start Date: 2009-05-13
Current End Date: 2014-05-14
Potential End Date: 2014-05-14 00:00:00
Last Modified: 2014-04-16
More Contracts from Suburban Propane Partners, L.P
- THE Indian Health Service, Sacred Oaks Healing Center HAS a Requirement for the Purchase of 3 Propane Tanks, and Propane Delivery Service, in Accordance With the Attached Performance Work Statement — $59.6K (Department of Health and Human Services)
- Park-Wide Propane and Maintenance for Yosemite NP — $23.7K (Department of the Interior)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)