DoD's $26.4M JP-8 Aviation Fuel Contract with Sinclair Oil Corporation Awarded Under Full and Open Competition
Contract Overview
Contract Amount: $26,409,372 ($26.4M)
Contractor: Sinclair OIL Corporation
Awarding Agency: Department of Defense
Start Date: 2011-09-30
End Date: 2012-06-29
Contract Duration: 273 days
Daily Burn Rate: $96.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: AVIATION FUEL, TURBINE, GRADE JP-8
Place of Performance
Location: SINCLAIR, CARBON County, WYOMING, 82334
State: Wyoming Government Spending
Plain-Language Summary
Department of Defense obligated $26.4 million to SINCLAIR OIL CORPORATION for work described as: AVIATION FUEL, TURBINE, GRADE JP-8 Key points: 1. Contract awarded to Sinclair Oil Corporation for $26.4M for JP-8 aviation fuel. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration was 273 days, indicating a short-term supply need. 4. The award was made by the Defense Logistics Agency, a key procurement arm for the DoD. 5. The fixed-price with economic price adjustment contract type aims to mitigate fuel price volatility.
Value Assessment
Rating: good
The contract value of $26.4M for aviation fuel appears reasonable given the quantity and market for such commodities. Benchmarking against similar DoD fuel contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition is a positive indicator for price discovery, as it allows multiple vendors to bid. This method generally leads to more competitive pricing compared to sole-source or limited solicitations.
Taxpayer Impact: The competitive nature of the award suggests taxpayers likely received a fair price for the aviation fuel procured.
Public Impact
Ensures critical aviation fuel supply for Department of Defense operations. Supports military readiness by providing necessary fuel for aircraft. Impacts the aviation fuel market, potentially influencing regional supply and demand. The economic price adjustment clause protects both the government and the contractor from significant price fluctuations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment could lead to higher costs if fuel prices surge.
- Short contract duration may necessitate frequent re-procurement, increasing administrative burden.
Positive Signals
- Full and open competition promotes fairness and potentially better pricing.
- Award to a known supplier like Sinclair Oil Corporation suggests reliability.
Sector Analysis
The procurement of aviation fuel falls under the broader energy and logistics sector. Spending benchmarks for turbine fuel can vary significantly based on geopolitical events, crude oil prices, and refinery capacity.
Small Business Impact
This contract does not appear to directly benefit small businesses, as it was awarded to Sinclair Oil Corporation, a large entity. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The Defense Logistics Agency is responsible for overseeing fuel procurements for the DoD. Standard oversight procedures for contract performance and delivery would apply to ensure accountability.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment clause.
- Dependence on a single supplier for a critical commodity.
- Short contract duration may lead to increased administrative effort and potential supply gaps if not managed proactively.
- Lack of explicit small business participation noted.
Tags
petroleum-refineries, department-of-defense, wy, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.4 million to SINCLAIR OIL CORPORATION. AVIATION FUEL, TURBINE, GRADE JP-8
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 $26.4 million.
What is the period of performance?
Start: 2011-09-30. End: 2012-06-29.
What was the specific economic price adjustment formula used, and what were the actual price changes experienced during the contract period?
The specific economic price adjustment formula is not detailed in the provided data. This formula typically links the contract price to a benchmark commodity price index (e.g., for crude oil or refined products) with agreed-upon adjustments. Understanding this formula is crucial for assessing the true cost to the government, especially if fuel prices experienced significant volatility during the contract's term.
How did the awarded price compare to market benchmarks for JP-8 fuel during the contract period?
Without access to historical market data for JP-8 fuel during the 2011-2012 period and specific contract line item details, a direct comparison is difficult. However, the use of full and open competition suggests the government sought competitive pricing. Further analysis would require comparing the awarded price per gallon against published indices or other government contract awards for similar fuel types and delivery locations.
What was the strategic importance of this specific JP-8 fuel procurement for the Department of Defense?
JP-8 is a critical fuel for a wide range of military aircraft and ground equipment, particularly in tactical environments. This procurement likely supported specific operational deployments, training exercises, or strategic reserve requirements. Ensuring a stable and cost-effective supply of JP-8 is essential for maintaining aviation readiness and supporting global military operations.
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: SP060011R0708
Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 550 E 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: $26,409,372
Exercised Options: $26,409,372
Current Obligation: $26,409,372
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D0523
IDV Type: IDC
Timeline
Start Date: 2011-09-30
Current End Date: 2012-06-29
Potential End Date: 2012-06-29 00:00:00
Last Modified: 2012-05-02
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