DOE awards $24.6M for Northeast Gasoline Supply Reserve, with 2 bidders competing
Contract Overview
Contract Amount: $24,624,000 ($24.6M)
Contractor: Buckeye Terminals, LLC
Awarding Agency: Department of Energy
Start Date: 2022-07-01
End Date: 2024-06-30
Contract Duration: 730 days
Daily Burn Rate: $33.7K/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: NORTHEAST GASOLINE SUPPLY RESERVE (NGSR)
Place of Performance
Location: PORT READING, MIDDLESEX County, NEW JERSEY, 07064
Plain-Language Summary
Department of Energy obligated $24.6 million to BUCKEYE TERMINALS, LLC for work described as: NORTHEAST GASOLINE SUPPLY RESERVE (NGSR) Key points: 1. Contract value represents a significant investment in strategic energy reserves. 2. Competition dynamics suggest a moderately contested award, potentially impacting price. 3. Performance risk appears manageable given the nature of storage services. 4. The contract duration of two years allows for sustained operational support. 5. This award positions Buckeye Terminals as a key player in energy infrastructure. 6. The firm fixed-price structure provides cost certainty for the government.
Value Assessment
Rating: good
The contract value of $24.6 million over two years for gasoline storage services appears reasonable. Benchmarking against similar contracts for strategic reserve storage is challenging without more specific data on capacity and service level agreements. However, the award to Buckeye Terminals, a known entity in fuel logistics, suggests a competitive process likely yielded a fair market price. The firm fixed-price nature of the contract further enhances value by capping government expenditure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was competed under Simplified Acquisition Procedures (SAP), indicating a threshold for competitive bidding. With two bidders participating, the competition level was moderate. While not a large-scale solicitation, the presence of multiple bidders suggests that price discovery occurred, and the government likely received competitive offers. This level of competition is generally favorable for ensuring a reasonable price.
Taxpayer Impact: The moderate competition for this contract suggests that taxpayer funds were likely used efficiently, as multiple companies vied for the opportunity, driving down potential costs compared to a sole-source award.
Public Impact
The primary beneficiaries are residents and businesses in the Northeast region who rely on a stable gasoline supply. The service delivered is the secure storage of gasoline, contributing to the Northeast Gasoline Supply Reserve. The geographic impact is concentrated in New Jersey, where the storage facilities are located. Workforce implications include employment opportunities at Buckeye Terminals' facilities in New Jersey.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases in future contract renewals if competition diminishes.
- Dependence on a single contractor for critical reserve storage could pose a risk if performance issues arise.
Positive Signals
- Award to an established provider with existing infrastructure reduces initial setup time and costs.
- Firm fixed-price contract provides budget certainty.
- The contract supports a critical national security objective related to energy independence.
Sector Analysis
The energy storage and logistics sector is vital for maintaining national energy security and market stability. This contract falls within the broader 'Other Warehousing and Storage' NAICS code, but specifically supports the strategic petroleum and energy reserve infrastructure. The market for fuel storage is characterized by significant capital investment in terminals and pipelines, with key players operating extensive networks. Comparable spending benchmarks are difficult to ascertain without detailed knowledge of reserve volumes and specific service requirements.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Buckeye Terminals, a larger entity, suggests that the primary focus was on capability and existing infrastructure rather than small business participation. This contract is unlikely to have a direct positive impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract is managed by the Department of Energy. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Strategic Petroleum Reserve
- Northeast Home Heating Oil Reserve
- Energy Infrastructure Security Contracts
Risk Flags
- Potential for supply chain disruption impacting contractor's ability to perform.
- Geopolitical events affecting global gasoline prices and availability.
- Regulatory changes impacting fuel storage and environmental compliance.
Tags
energy, department-of-energy, new-jersey, warehousing-and-storage, definitive-contract, firm-fixed-price, competed-under-sap, medium-value, energy-security, gasoline-storage
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $24.6 million to BUCKEYE TERMINALS, LLC. NORTHEAST GASOLINE SUPPLY RESERVE (NGSR)
Who is the contractor on this award?
The obligated recipient is BUCKEYE TERMINALS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $24.6 million.
What is the period of performance?
Start: 2022-07-01. End: 2024-06-30.
What is Buckeye Terminals, LLC's track record with federal contracts, particularly in energy storage?
Buckeye Terminals, LLC has a significant history of federal contracting, primarily related to fuel storage and transportation. While specific details on all past federal awards are not provided here, their core business involves operating a large network of terminals and pipelines for refined petroleum products and petrochemicals. This extensive experience in handling and storing various fuel types, including gasoline, suggests a strong operational capability relevant to the NGSR contract. Their established infrastructure and expertise likely contributed to their successful bid. Further analysis would involve reviewing their performance history on similar government contracts, including any past issues or commendations.
How does the awarded price compare to market rates for similar gasoline storage services?
Directly comparing the awarded price of $24.6 million over two years for the Northeast Gasoline Supply Reserve (NGSR) to precise market rates is challenging without detailed specifications of the storage capacity, location-specific costs, and service level agreements. However, the contract was competed under Simplified Acquisition Procedures with two bidders, suggesting a degree of price discovery. Buckeye Terminals, LLC is a major player in the fuel logistics industry, operating extensive terminal infrastructure. The firm fixed-price nature of the contract provides cost certainty. To benchmark effectively, one would need to analyze per-barrel storage costs or per-gallon storage costs against industry averages for comparable facilities in the Northeast, considering factors like security, throughput, and regulatory compliance.
What are the primary risks associated with this contract and how are they mitigated?
The primary risks associated with this contract include potential performance failures by the contractor (Buckeye Terminals, LLC), such as inadequate maintenance of storage facilities or security breaches, which could compromise the reserve's integrity. Another risk is the potential for price escalation in future contract renewals if competition decreases. Mitigation strategies include the firm fixed-price contract structure, which caps government expenditure and incentivizes contractor efficiency. The Department of Energy's oversight and performance monitoring are crucial for ensuring compliance and addressing any issues promptly. Furthermore, the selection of an established provider with existing infrastructure likely reduces operational risks compared to a new entrant.
How effective is the Northeast Gasoline Supply Reserve (NGSR) in ensuring regional energy security?
The Northeast Gasoline Supply Reserve (NGSR) is designed to enhance regional energy security by providing a buffer against supply disruptions caused by events such as hurricanes, refinery outages, or geopolitical instability. By maintaining a readily available supply of gasoline, the reserve can help stabilize prices and ensure continued availability for consumers and businesses in the event of a shortfall. The effectiveness of the NGSR is contingent on several factors, including the volume of fuel stored, the strategic location of storage facilities (like those managed by Buckeye Terminals in New Jersey), the speed at which the fuel can be deployed, and the overall resilience of the region's energy infrastructure. Regular testing, maintenance, and strategic contract awards are essential to its operational readiness.
What has been the historical spending trend for the Northeast Gasoline Supply Reserve?
Historical spending data for the Northeast Gasoline Supply Reserve (NGSR) specifically is not detailed in the provided information. However, the Department of Energy manages various strategic energy reserves, including the larger Strategic Petroleum Reserve (SPR). Spending on such reserves typically involves costs for acquiring and storing petroleum products, maintaining storage facilities, and managing logistics. The award of $24.6 million for a two-year period suggests a consistent level of investment is required to maintain this reserve. Analyzing past contract awards for NGSR or similar regional reserves would provide a clearer picture of historical spending patterns and trends in federal investment in energy security.
Industry Classification
NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage
Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS
Competition & Pricing
Extent Competed: COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Solicitation ID: 89243522RFE000021
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Buckeye Terminals LLC
Address: 6161 HAMILTON BLVD, ALLENTOWN, PA, 18106
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $52,920,000
Exercised Options: $24,624,000
Current Obligation: $24,624,000
Actual Outlays: $24,624,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2022-07-01
Current End Date: 2024-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2024-11-06
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