DoD's $31.9M Aviation Turbine Fuel Contract Awarded to BP Products North America Inc

Contract Overview

Contract Amount: $31,950,275 ($32.0M)

Contractor: BP Products North America Inc.

Awarding Agency: Department of Defense

Start Date: 2018-03-01

End Date: 2018-03-26

Contract Duration: 25 days

Daily Burn Rate: $1.3M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: 8505250106!TURBINE FUEL,AVIATION

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60606

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to BP PRODUCTS NORTH AMERICA INC. for work described as: 8505250106!TURBINE FUEL,AVIATION Key points: 1. Significant contract value for aviation fuel. 2. BP Products North America Inc. is a major player in the energy sector. 3. Potential risk associated with fluctuating fuel prices. 4. Defense sector relies heavily on such fuel procurements.

Value Assessment

Rating: fair

The contract value of $31.9M for aviation turbine fuel appears within a reasonable range for large-scale government procurements of this nature. However, without specific per-unit cost data or detailed market analysis, a precise valuation is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. This method generally promotes price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing competitive pricing for essential aviation fuel.

Public Impact

Ensures operational readiness for military aircraft. Supports critical defense logistics and deployment capabilities. Impacts the broader aviation fuel market due to scale.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns if fuel prices spike significantly.
Reliance on a single supplier for a critical commodity.

Positive Signals

Awarded through full and open competition.
Secures a vital resource for national defense.

Sector Analysis

The petroleum refineries sector is crucial for supplying energy needs across various industries, including defense. This contract represents a significant portion of spending within this sub-sector for the Department of Defense.

Small Business Impact

This contract was awarded to a large corporation, BP Products North America Inc., and does not appear to have direct provisions or benefits for small businesses in this specific award.

Oversight & Accountability

The contract was awarded as a delivery order under a larger agreement, suggesting existing oversight mechanisms. However, the specifics of ongoing performance monitoring and accountability for price adjustments require further review.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Potential for cost escalation due to economic price adjustment.
Dependence on a single large supplier for a critical resource.
Lack of specific per-unit cost data for direct benchmarking.
Short contract duration may indicate a need for longer-term solutions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to BP PRODUCTS NORTH AMERICA INC.. 8505250106!TURBINE FUEL,AVIATION

Who is the contractor on this award?

The obligated recipient is BP PRODUCTS NORTH AMERICA INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $32.0 million.

What is the period of performance?

Start: 2018-03-01. End: 2018-03-26.

What is the historical price trend for aviation turbine fuel during the contract period, and how did the economic price adjustment clause affect the final cost?

Analyzing historical price data for aviation turbine fuel during the contract's duration (March 2018) is crucial. The economic price adjustment clause allows for modifications based on market fluctuations. Understanding the specific formula used in the contract and comparing the final invoiced price against a baseline market price would reveal the true cost impact and whether the government benefited or incurred additional expenses due to price volatility.

How does the per-gallon cost of this contract compare to other similar aviation fuel procurements by the DoD or other federal agencies during the same period?

Benchmarking this contract's per-gallon cost against similar aviation fuel procurements is essential for assessing value. Comparing it to contracts awarded by the DoD or other federal agencies for the same type of fuel, under similar competitive conditions and delivery terms, would highlight any significant deviations. A higher cost might indicate less favorable negotiation or market conditions, while a lower cost suggests effective procurement practices.

What mechanisms are in place to ensure the quality and timely delivery of aviation turbine fuel under this contract, and have there been any performance issues reported?

Ensuring the quality and timely delivery of aviation turbine fuel is paramount for military operations. The contract likely includes specifications and inspection protocols. Reviewing performance reports, delivery records, and any documented quality control issues or delays would provide insight into the contractor's reliability and the effectiveness of the government's oversight in maintaining operational readiness and preventing disruptions.

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

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: BP P.L.C.

Address: 30 S WACKER DR STE 900, CHICAGO, IL, 60606

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $31,950,275

Exercised Options: $31,950,275

Current Obligation: $31,950,275

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60218D0451

IDV Type: IDC

Timeline