DoD awards $59.7M for Turbine Fuel (JP8) to Sinclair Oil Corporation under full and open competition
Contract Overview
Contract Amount: $59,704,841 ($59.7M)
Contractor: Sinclair OIL Corporation
Awarding Agency: Department of Defense
Start Date: 2008-09-18
End Date: 2009-10-30
Contract Duration: 407 days
Daily Burn Rate: $146.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 16
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: TURBINE FUEL, AVIATION, JP8
Place of Performance
Location: SINCLAIR, CARBON County, WYOMING, 82334
State: Wyoming Government Spending
Plain-Language Summary
Department of Defense obligated $59.7 million to SINCLAIR OIL CORPORATION for work described as: TURBINE FUEL, AVIATION, JP8 Key points: 1. The contract value of $59.7 million for aviation fuel is significant. 2. Sinclair Oil Corporation, a major refiner, is the awardee. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The sector is Defense Logistics, crucial for military operations.
Value Assessment
Rating: good
The contract value of $59.7 million for aviation fuel is substantial. Benchmarking against similar fuel contracts would provide a clearer picture of its value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing and ensures the government receives fair market value.
Taxpayer Impact: The competitive nature of this award suggests taxpayers benefited from a price discovery process that likely yielded a reasonable cost for the aviation fuel.
Public Impact
Ensures supply of critical aviation fuel (JP8) for Department of Defense operations. Supports a major U.S. oil refiner, contributing to the domestic energy sector. The fixed-price with economic price adjustment clause may expose the government to fuel price volatility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could lead to cost overruns if fuel prices spike.
- Contract duration of 407 days is relatively short for a fuel supply contract.
Positive Signals
- Awarded under full and open competition.
- Awardee is a well-established petroleum refiner.
Sector Analysis
This contract falls within the energy sector, specifically petroleum refining and distribution, which is vital for national security and transportation. Spending benchmarks for aviation fuel vary widely based on market conditions and contract specifics.
Small Business Impact
The awardee, Sinclair Oil Corporation, is a large business. There is no indication in the provided data that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The Department of Defense, through the Defense Logistics Agency, is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms would apply to ensure performance and compliance.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost increases due to economic price adjustment.
- Short contract duration may require frequent re-competition.
- Lack of specific unit pricing for detailed value analysis.
- No indication of small business participation.
Tags
petroleum-refineries, department-of-defense, wy, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.7 million to SINCLAIR OIL CORPORATION. TURBINE FUEL, AVIATION, JP8
Who is the contractor on this award?
The obligated recipient is SINCLAIR OIL CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $59.7 million.
What is the period of performance?
Start: 2008-09-18. End: 2009-10-30.
What was the specific unit price for JP8 fuel under this contract, and how does it compare to market rates at the time of award?
The provided data does not include the specific unit price for JP8 fuel. To assess value, this unit price would need to be compared against prevailing market rates for JP8 during the contract period (late 2008 to late 2009). Factors like volume discounts, delivery locations, and contract terms (like the economic price adjustment) would also influence a fair comparison.
What are the potential risks associated with the 'Economic Price Adjustment' clause in this fixed-price contract?
The primary risk of an 'Economic Price Adjustment' (EPA) clause is that it allows the contract price to increase if certain economic indicators, typically related to the cost of raw materials or labor, rise. For a fuel contract, this means the government is exposed to potential price increases if crude oil or refining costs escalate during the contract period, potentially leading to higher-than-anticipated spending.
How effectively did the 'full and open competition' process ensure competitive pricing for this aviation fuel contract?
Full and open competition generally promotes competitive pricing by allowing all responsible sources to submit offers. The effectiveness in this case would depend on the number of bids received and the price spread between them. Without knowing the number of bidders and their proposed prices, it's difficult to definitively state how effectively competition drove down costs, but the process itself is designed to achieve this.
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
Solicitation ID: SP060008R0161
Offers Received: 16
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 550 EAST SOUTH TEMPLE, SALT LAKE CITY, UT, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $59,704,841
Exercised Options: $59,704,841
Current Obligation: $59,704,841
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060008D0511
IDV Type: IDC
Timeline
Start Date: 2008-09-18
Current End Date: 2009-10-30
Potential End Date: 2009-10-30 00:00:00
Last Modified: 2009-08-10
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