DoD's $24.5M Aviation Turbine Fuel Contract Awarded to BP Products North America Inc
Contract Overview
Contract Amount: $24,506,010 ($24.5M)
Contractor: BP Products North America Inc.
Awarding Agency: Department of Defense
Start Date: 2016-12-19
End Date: 2017-01-18
Contract Duration: 30 days
Daily Burn Rate: $816.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: 8503941264!TURBINE FUEL,AVIATION
Place of Performance
Location: CHICAGO, COOK County, ILLINOIS, 60606
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $24.5 million to BP PRODUCTS NORTH AMERICA INC. for work described as: 8503941264!TURBINE FUEL,AVIATION Key points: 1. Significant contract value for aviation fuel. 2. BP Products North America Inc. is a major player in the fuel market. 3. Potential risk associated with fluctuating fuel prices due to economic price adjustment clause. 4. Spending falls within the broad 'Energy' sector, specifically petroleum refining.
Value Assessment
Rating: good
The contract value of $24.5 million for a 30-day period appears reasonable for aviation turbine fuel, especially considering the fixed price with economic price adjustment. Benchmarking against similar large-volume 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, suggesting a competitive bidding process. This method generally leads to better price discovery and potentially more favorable pricing for the government.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential fuel supplies.
Public Impact
Ensures critical fuel supply for military aviation operations. Supports national defense readiness by maintaining aircraft operational capability. Impacts the aviation fuel market and potentially other government fuel procurements.
Waste & Efficiency Indicators
Waste Risk Score: 81 / 10
Warning Flags
- Economic price adjustment clause could lead to cost overruns if fuel prices spike.
- Short contract duration (30 days) may indicate a need for frequent re-competition or a specific, short-term requirement.
Positive Signals
- Awarded under full and open competition.
- Secures a vital resource for the Department of Defense.
Sector Analysis
This contract falls under the energy sector, specifically the procurement of aviation fuel, a critical component for military operations. Spending benchmarks for aviation fuel can vary significantly based on global market prices and demand.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. Large fuel contracts are typically awarded to major suppliers, limiting direct participation opportunities for small businesses in this specific procurement.
Oversight & Accountability
The award was made by the Defense Logistics Agency, a key component of the DoD responsible for logistics support. Oversight would involve monitoring contract performance and adherence to terms, especially the economic price adjustment.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost escalation due to economic price adjustment.
- Short contract duration may indicate instability or require frequent re-procurement.
- Lack of small business participation noted.
- Dependence on a single supplier for a critical resource.
Tags
petroleum-refineries, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.5 million to BP PRODUCTS NORTH AMERICA INC.. 8503941264!TURBINE FUEL,AVIATION
Who is the contractor on this award?
The obligated recipient is BP PRODUCTS NORTH AMERICA INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $24.5 million.
What is the period of performance?
Start: 2016-12-19. End: 2017-01-18.
What was the specific basis for the economic price adjustment, and what were the historical price fluctuations during the contract period?
The basis for the economic price adjustment would typically be tied to a recognized industry fuel price index. Understanding the specific index used and analyzing historical price movements during the contract's 30-day term is crucial. This helps determine if the adjustment mechanism effectively managed price volatility or if it led to unexpected cost increases for the government, impacting overall value.
How did the pricing compare to other bids received under the full and open competition?
While awarded under full and open competition, a detailed comparison of all bids is necessary to confirm optimal price discovery. Analyzing the spread between the winning bid and other competitive offers would reveal the degree of price advantage secured. This insight is vital for assessing whether the competition effectively drove down costs or if there's room for improvement in future solicitations.
What is the typical duration for aviation turbine fuel contracts awarded by the DLA, and does this 30-day period represent a deviation?
The 30-day duration for this contract is relatively short for a major fuel supply. Typical contracts might span longer periods, potentially with options for extension, to ensure sustained supply and reduce administrative burden. A short duration could indicate a specific, urgent need or a strategy to re-compete frequently to capture market price changes, impacting long-term planning and potential economies of scale.
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
Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: BP P.L.C. (UEI: 210042669)
Address: 30 S WACKER DR STE 900, CHICAGO, IL, 60606
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $24,506,010
Exercised Options: $24,506,010
Current Obligation: $24,506,010
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE60017D0467
IDV Type: IDC
Timeline
Start Date: 2016-12-19
Current End Date: 2017-01-18
Potential End Date: 2017-01-18 00:00:00
Last Modified: 2019-01-19
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