DOD's $193.7M Pipeline Contract with Vitol Inc. for Petroleum Refineries Under Full and Open Competition
Contract Overview
Contract Amount: $193,749,384 ($193.7M)
Contractor: Vitol Inc
Awarding Agency: Department of Defense
Start Date: 2013-06-28
End Date: 2016-06-30
Contract Duration: 1,098 days
Daily Burn Rate: $176.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: JA1 HALLEN/KILLENHOLM PIPELINE/ORIGIN
Plain-Language Summary
Department of Defense obligated $193.7 million to VITOL INC for work described as: JA1 HALLEN/KILLENHOLM PIPELINE/ORIGIN Key points: 1. Significant contract value of $193.7 million awarded to Vitol Inc. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type, Fixed Price with Economic Price Adjustment, carries some risk of cost escalation. 4. The sector is Petroleum Refineries, crucial for defense logistics.
Value Assessment
Rating: good
The contract value of $193.7 million for petroleum refining services appears reasonable given the duration and scope. Benchmarking against similar large-scale fuel supply 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, indicating multiple bidders likely participated. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: The competitive nature of the award suggests taxpayers benefited from potentially lower prices than a sole-source or limited competition scenario.
Public Impact
Ensures a critical supply of refined petroleum products for Department of Defense operations. Supports the Defense Logistics Agency's mission to provide logistical support to the U.S. military. The economic price adjustment clause could lead to increased costs for taxpayers if market prices for petroleum rise significantly.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment may increase final cost.
- Contract duration of nearly 3 years.
- Potential for supply chain disruptions affecting delivery.
Positive Signals
- Awarded under full and open competition.
- Significant value indicates a substantial need met.
- Fixed price component provides some cost certainty.
Sector Analysis
The petroleum refining sector is vital for national security, providing essential fuels for military operations. Spending in this area is subject to global commodity prices and geopolitical factors.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. The prime contractor, Vitol Inc., is a large global energy company, suggesting limited direct opportunities for small businesses in this specific prime contract.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, a component of the Department of Defense, which has established oversight mechanisms. However, the effectiveness of oversight for economic price adjustments warrants attention.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Dependence on a single large contractor for a critical supply.
- Vulnerability to global oil price fluctuations.
- Contract duration may not align with evolving strategic needs.
Tags
petroleum-refineries, department-of-defense, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $193.7 million to VITOL INC. JA1 HALLEN/KILLENHOLM PIPELINE/ORIGIN
Who is the contractor on this award?
The obligated recipient is VITOL INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $193.7 million.
What is the period of performance?
Start: 2013-06-28. End: 2016-06-30.
What was the total amount paid under the economic price adjustment clause?
The provided data does not specify the total amount paid under the economic price adjustment clause. To assess the true cost impact, a detailed analysis of invoices and price adjustments over the contract's life would be necessary. This information is crucial for understanding the final expenditure compared to the initial fixed price.
How did the final awarded price compare to initial bids received?
The data indicates the contract was awarded under full and open competition, suggesting multiple bids were likely received. However, specific details on the number of bids or how the final awarded price compared to initial proposals are not provided. This comparison is key to evaluating the effectiveness of the competitive process in securing optimal pricing.
What specific petroleum products were covered by this contract?
The contract description mentions 'JA1 HALLEN/KILLENHOLM PIPELINE/ORIGIN,' which likely refers to specific types of jet fuel (JP-8 or similar) or refined petroleum products destined for particular locations or pipelines. A precise breakdown of the products is essential for understanding the scope and potential impact on different military aviation or ground support 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
Offers Received: 14
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Stichting Administratiekantoor Vitol Holding II (UEI: 411722171)
Address: 1100 LOUISIANA ST STE 5500, HOUSTON, TX, 77002
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $193,749,384
Exercised Options: $193,749,384
Current Obligation: $193,749,384
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060013D0483
IDV Type: IDC
Timeline
Start Date: 2013-06-28
Current End Date: 2016-06-30
Potential End Date: 2016-06-30 00:00:00
Last Modified: 2022-03-30
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