DOE Spends $47.5M on Sunoco Terminating Services, Awarded Without Competition
Contract Overview
Contract Amount: $47,523,212 ($47.5M)
Contractor: Sunoco Partners Marketing & Terminals L.P.
Awarding Agency: Department of Energy
Start Date: 1998-04-15
End Date: 2018-04-30
Contract Duration: 7,320 days
Daily Burn Rate: $6.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: TERMINALLING SERVICES
Place of Performance
Location: NEDERLAND, JEFFERSON County, TEXAS, 77627
State: Texas Government Spending
Plain-Language Summary
Department of Energy obligated $47.5 million to SUNOCO PARTNERS MARKETING & TERMINALS L.P. for work described as: TERMINALLING SERVICES Key points: 1. Significant spending on a single provider for essential services. 2. Lack of competition raises concerns about price discovery and value. 3. Long contract duration (20 years) may not reflect current market needs. 4. Fixed Price with Economic Price Adjustment (EPA) can lead to cost overruns.
Value Assessment
Rating: questionable
The contract's fixed price with economic price adjustment (EPA) makes direct value assessment difficult without knowing the EPA's impact. Given the lack of competition, it's questionable if the government achieved the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition likely resulted in higher costs than a competed contract, impacting taxpayer funds negatively over the 20-year period.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. Reliance on a single provider for critical services poses a risk if that provider fails or increases prices significantly. The long duration of the contract limits flexibility to adapt to changing energy market conditions or technological advancements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Long Contract Duration
- Economic Price Adjustment
Positive Signals
- Established Provider
- Long-term Service Agreement
Sector Analysis
This contract falls under general services, specifically related to energy infrastructure. Spending benchmarks for terminating services are highly variable and depend on the specific assets and market conditions. The $47.5M over 20 years suggests a substantial, ongoing need.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a large entity like Sunoco Partners suggests a focus on established, large-scale providers.
Oversight & Accountability
The lack of competition and the long duration warrant closer oversight to ensure the government is receiving fair value and that the contract terms remain appropriate throughout its life. Audits of the economic price adjustment mechanism would be prudent.
Related Government Programs
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Lack of Competition
- Potential for Overpricing
- Long Contract Duration
- Economic Price Adjustment Risks
- Limited Transparency
Tags
department-of-energy, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $47.5 million to SUNOCO PARTNERS MARKETING & TERMINALS L.P.. TERMINALLING SERVICES
Who is the contractor on this award?
The obligated recipient is SUNOCO PARTNERS MARKETING & TERMINALS L.P..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $47.5 million.
What is the period of performance?
Start: 1998-04-15. End: 2018-04-30.
What was the justification for not competing this contract, and were alternative solutions explored?
The provided data does not specify the justification for not competing this contract. Typically, sole-source awards require extensive justification, such as unique capabilities or urgent needs. Without this information, it's impossible to assess if alternative solutions were considered or if the non-competitive award was truly necessary and in the government's best interest.
How has the economic price adjustment clause impacted the total cost over the contract's lifespan?
The economic price adjustment (EPA) clause allows for changes in contract price based on fluctuations in specific economic factors (e.g., inflation, material costs). Without access to the contract's specific EPA formula and historical economic data, it's impossible to quantify its exact impact on the $47.5 million total cost. However, EPAs generally increase costs over time, especially during periods of high inflation.
What is the current market rate for similar terminating services, and how does it compare to the contract's pricing?
Determining the current market rate for 'terminating services' is challenging without more specific details on the nature of these services and the assets involved. However, given the contract was awarded without competition in 1998 and has a long duration, it is highly probable that current market rates, especially from a competitive bidding process, would be significantly different, potentially lower, than the prices negotiated two decades ago.
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Contractor Details
Parent Company: Energy Transfer Equity, L.P. (UEI: 610792264)
Address: 3807 WEST CHESTER PIKE, NEWTOWN SQUARE, PA, 19073
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $49,147,184
Exercised Options: $49,147,184
Current Obligation: $47,523,212
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM
Timeline
Start Date: 1998-04-15
Current End Date: 2018-04-30
Potential End Date: 2018-09-30 00:00:00
Last Modified: 2019-07-09
More Contracts from Sunoco Partners Marketing & Terminals L.P.
- SPR West Hackberry and BIG Hill Crude Oil/Crude Petroleum Distribution&terminalling Services — $24.9M (Department of Energy)
View all Sunoco Partners Marketing & Terminals L.P. federal contracts →
Other Department of Energy Contracts
- Federal Contract — $48.1B (Lockheed Martin Corp)
- ,Ct::igf Contract Award De-Na0003525 to the National Technology&engineering Solutions of Sandia, LLC (ntess) for the Management and Operation of the Department of Energy, National Nuclear Security Administration's Sandia National Laboratories (SNL) — $41.7B (National Technology & Engineering Solutions of Sandia, LLC)
- Management and Operation of the OAK Ridge National Laboratory — $40.8B (Ut-Battelle LLC)
- TAS::89 0240::TAS This Performance-Based Management Contract (pbmc) IS for the Management and Operation of the Lawrence Livermore National Laboratory (llnl). the Contractor Shall, in Accordance With the Provisions of This Contract, Accomplish the Missions and Programs Assigned by the U.S. Department of Energy (DOE) and Manage and Operate the Laboratory. the Laboratory IS ONE of Does Office of Defense Program Multi-Program Laboratories. the Laboratory IS a Federally Funded Research and Development Institution (established in Accordance With the Federal Acquisition Regulation (FAR) Part 35 and Operated Under This Management and Operating (M&O) Contract, AS Defined in FAR 17.6 and Dear 917.6 — $40.8B (Lawrence Livermore National Security, LLC)
- M&O of Lanl BR of U of CA — $35.3B (Regents of the University of California, the)