DOE Spends $118M on Crude Oil from Noble Americas Corp. in 2015
Contract Overview
Contract Amount: $117,971,714 ($118.0M)
Contractor: Noble Americas Corp.
Awarding Agency: Department of Energy
Start Date: 2015-04-02
End Date: 2015-07-31
Contract Duration: 120 days
Daily Burn Rate: $983.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 9
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: CRUDE OIL PURCHASE
Place of Performance
Location: FREEPORT, BRAZORIA County, TEXAS, 77542, UNITED STATES OF AMERICA
State: Texas Government Spending
Plain-Language Summary
Department of Energy obligated $118.0 million to NOBLE AMERICAS CORP. for work described as: CRUDE OIL PURCHASE Key points: 1. Significant expenditure of $118M for crude oil highlights reliance on commodity markets. 2. Noble Americas Corp. secured the contract, indicating potential market concentration. 3. The firm fixed price contract mitigates some price volatility risk for the government. 4. Petroleum wholesale sector spending is subject to global supply and demand dynamics.
Value Assessment
Rating: fair
The $118M award for crude oil is substantial. Benchmarking against market prices during the contract period (April-July 2015) is crucial to assess value. Without specific per-unit pricing and market data, a definitive value assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was utilized, suggesting a robust price discovery process. However, the specific market conditions for crude oil at the time of bidding would heavily influence the final negotiated price.
Taxpayer Impact: Taxpayer funds are directly exposed to the volatile global crude oil market, even with a fixed price contract, as the underlying cost impacts the government's expenditure.
Public Impact
Ensures national energy supply continuity by securing essential crude oil. Price fluctuations in the global oil market directly impact the cost to taxpayers. Supports the petroleum wholesale industry, contributing to economic activity in the sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Commodity price volatility risk
- Geopolitical supply chain disruptions
- Contract performance monitoring
Positive Signals
- Fixed price contract mitigates some cost uncertainty
- Full and open competition promotes market efficiency
Sector Analysis
The Department of Energy's purchase falls within the Petroleum and Petroleum Products Merchant Wholesalers sector. Spending benchmarks for crude oil procurement vary widely based on market conditions, geopolitical events, and national strategic reserves.
Small Business Impact
The data does not indicate whether small businesses were involved in this specific contract, either as prime contractors or subcontractors. Analysis of small business participation would require further investigation into the supply chain.
Oversight & Accountability
The Department of Energy is responsible for this procurement. Oversight would involve monitoring contract performance, ensuring delivery, and verifying compliance with terms. The award notice suggests a standard procurement process was followed.
Related Government Programs
- Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Significant expenditure amount
- Reliance on volatile commodity market
- Potential for market concentration with supplier
- Limited insight into specific risk mitigation strategies
Tags
petroleum-and-petroleum-products-merchan, department-of-energy, tx, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $118.0 million to NOBLE AMERICAS CORP.. CRUDE OIL PURCHASE
Who is the contractor on this award?
The obligated recipient is NOBLE AMERICAS CORP..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $118.0 million.
What is the period of performance?
Start: 2015-04-02. End: 2015-07-31.
What was the average per-barrel cost of crude oil purchased under this contract compared to prevailing market rates during the contract period?
Determining the precise per-barrel cost requires access to the contract's detailed pricing structure and historical market data for the specific type of crude oil purchased. Comparing this to benchmarks like WTI or Brent crude during April-July 2015 would reveal if the government secured a favorable price or paid a premium due to market conditions or specific contract terms.
What specific risks related to the supplier, Noble Americas Corp., were assessed prior to awarding this contract?
Standard procurement processes typically involve assessing supplier responsibility, financial stability, and past performance. For a large crude oil purchase, risks might include supply chain reliability, adherence to quality specifications, and potential for price manipulation. The 'full and open competition' suggests multiple bidders were evaluated, but specific risk flags for Noble Americas Corp. are not detailed in the provided data.
How effectively did this contract contribute to the Department of Energy's strategic energy security objectives?
The effectiveness hinges on whether the purchased crude oil met strategic reserve needs or supported critical energy infrastructure. If the purchase was for routine operational needs, its effectiveness is measured by cost efficiency and reliable supply. Without insight into the DOE's specific strategic goals for this procurement, assessing its broader effectiveness is challenging.
Industry Classification
NAICS: Wholesale Trade › Petroleum and Petroleum Products Merchant Wholesalers › Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DE-SOL-0008003
Offers Received: 9
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Noble Group Limited (UEI: 875657850)
Address: 4 STAMFORD PLZ 107 ELM ST 7TH FL, STAMFORD, CT, 06902
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $117,971,714
Exercised Options: $117,971,714
Current Obligation: $117,971,714
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2015-04-02
Current End Date: 2015-07-31
Potential End Date: 2015-07-31 00:00:00
Last Modified: 2015-08-17
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