DoD's $23.6M fuel storage tank contract awarded to foreign entities raises value and transparency concerns

Contract Overview

Contract Amount: $23,648,164 ($23.6M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2009-09-23

End Date: 2012-10-15

Contract Duration: 1,118 days

Daily Burn Rate: $21.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FUEL STORAGE TANK

Plain-Language Summary

Department of Defense obligated $23.6 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: FUEL STORAGE TANK Key points: 1. The contract's value appears reasonable for fuel storage tank construction, but the lack of specific details on foreign awardees hinders a precise value-for-money assessment. 2. Full and open competition was utilized, suggesting a competitive bidding process, yet the ultimate awardee's origin remains undisclosed, potentially limiting price discovery. 3. The use of a definitive contract with a firm fixed price indicates a defined scope and cost structure, mitigating some performance risks. 4. Awarded in 2009, the contract's performance period has concluded, making direct comparison to current market rates challenging. 5. This contract falls within the broader category of construction services for energy infrastructure, a critical but often complex sector for government procurement. 6. The absence of small business set-aside or subcontracting information suggests limited direct impact on the small business ecosystem for this specific award.

Value Assessment

Rating: fair

The contract value of approximately $23.6 million for fuel storage tank construction is within a plausible range for such projects. However, the lack of specific details regarding the foreign awardees and the exact scope of work makes a definitive value-for-money assessment difficult. Without comparable domestic projects or more granular cost breakdowns, it's challenging to benchmark pricing effectively. The firm fixed-price nature suggests cost control was a priority, but the ultimate value realized is obscured by the limited transparency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While this suggests a robust competitive environment, the fact that the award went to foreign entities (with undisclosed specifics) raises questions about the depth of domestic competition or the specific advantages offered by the foreign awardee. The number of bidders is not specified, but the outcome implies that the foreign offer was deemed the most advantageous.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to secure the best value through market forces. However, when awards go to foreign entities without clear justification or transparency, it can raise concerns about whether domestic businesses were overlooked or if there were hidden costs or risks associated with the foreign award.

Public Impact

The primary beneficiaries are likely the Department of Defense and its operational readiness, ensuring adequate fuel storage capacity. The services delivered involved the construction of essential fuel storage infrastructure, critical for military logistics and operations. The geographic impact is specific to the location where the fuel storage tanks were constructed, likely a military installation. Workforce implications would include construction labor and specialized technical roles required for the project, potentially involving both domestic and foreign labor depending on the awardee's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the specific foreign awardees and their qualifications.
Potential for undisclosed costs or risks associated with international contracting.
Limited insight into the competitive landscape and whether domestic firms were competitively disadvantaged.

Positive Signals

Awarded under full and open competition, suggesting an attempt to maximize market participation.
Firm fixed-price contract type helps control costs and manage budget predictability.
The contract addressed a critical infrastructure need for the Department of Defense.

Sector Analysis

This contract falls within the construction sector, specifically related to energy infrastructure. The market for fuel storage tank construction is specialized, involving engineering, materials, and safety compliance. Comparable spending benchmarks are difficult to establish without more specific project details, but large-scale infrastructure projects for defense often involve significant investment. The market size for such specialized construction can vary widely based on geopolitical needs and infrastructure upgrades.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information provided regarding subcontracting plans or actual subcontracting. Therefore, this award does not appear to have directly benefited the small business ecosystem through set-asides or mandated subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Army, a component of the Department of Defense. As a definitive contract, it likely involved standard procurement oversight processes. Accountability measures would be tied to the firm fixed-price terms and delivery schedules. Transparency is limited by the lack of detailed information on the foreign awardees and specific project outcomes.

Related Government Programs

Department of Defense Construction Contracts
Energy Infrastructure Projects
Fuel Storage and Distribution Systems
Foreign Military Sales Support
Oil and Gas Pipeline and Related Structures Construction

Risk Flags

Lack of Transparency in Awardee Identification
Potential for Undisclosed Foreign Sourcing Risks
Limited Data for Value-for-Money Assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.6 million to FOREIGN AWARDEES (UNDISCLOSED). FUEL STORAGE TANK

Who is the contractor on this award?

The obligated recipient is FOREIGN AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $23.6 million.

What is the period of performance?

Start: 2009-09-23. End: 2012-10-15.

What specific types of fuel storage tanks were constructed, and what were the key technical specifications?

The provided data identifies the contract's purpose as 'FUEL STORAGE TANK' and its North American Industry Classification System (NAICS) code as '237120 - Oil and Gas Pipeline and Related Structures Construction'. However, it does not detail the specific types of fuel storage tanks (e.g., above-ground, underground, capacity, material) or their technical specifications. This level of detail is crucial for understanding the complexity of the project and for accurately benchmarking its cost against similar infrastructure.

Can the specific foreign awardees be identified, and what is their track record in constructing similar infrastructure?

The data indicates 'FOREIGN AWARDEES (UNDISCLOSED)' as the contractor. This lack of specific identification prevents an assessment of the awardees' track record, experience, and past performance in constructing fuel storage tanks or similar defense infrastructure. Understanding the capabilities and history of the chosen contractor is a fundamental aspect of evaluating the risk and potential success of any government contract, especially one involving foreign entities.

How does the contract's value of $23.6 million compare to similar fuel storage tank construction projects, domestically or internationally?

Benchmarking the $23.6 million contract value requires detailed comparison points, such as the size, type, location, and complexity of the fuel storage tanks, as well as the prevailing market conditions at the time of award (2009). Without this granular project information and access to comparable project data, it is difficult to definitively state whether this contract represented excellent, fair, or questionable value. The 'FOREIGN AWARDEES (UNDISCLOSED)' status further complicates direct comparison due to potential differences in labor costs, regulatory environments, and profit margins.

What were the primary risks associated with this contract, and how were they managed?

Potential risks for a contract of this nature include construction delays, cost overruns (though mitigated by firm fixed price), material defects, environmental compliance issues, and geopolitical factors if involving foreign entities. The firm fixed-price contract type inherently shifts some cost risk to the contractor. However, the 'undisclosed' nature of the foreign awardees introduces a significant risk related to oversight, quality assurance, and potential supply chain vulnerabilities. Specific risk management strategies employed by the Department of the Army are not detailed in the provided data.

What was the historical spending pattern for fuel storage tank construction by the Department of the Army around the period of this contract?

The provided data focuses solely on this single contract awarded in 2009. To assess historical spending patterns, a broader dataset encompassing multiple contracts for fuel storage tank construction by the Department of the Army over several fiscal years would be necessary. This would allow for analysis of trends in contract volume, average award values, and the prevalence of different contract types and competition levels over time.

Industry Classification

NAICS: Construction › Utility System Construction › Oil and Gas Pipeline and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912ER09R0068

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $23,648,164

Exercised Options: $23,648,164

Current Obligation: $23,648,164

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline