DoD's $35.3M Naval Distillate Fuel Contract Awarded to BP Products North America Inc
Contract Overview
Contract Amount: $35,277,473 ($35.3M)
Contractor: BP Products North America Inc.
Awarding Agency: Department of Defense
Start Date: 2022-03-11
End Date: 2022-03-31
Contract Duration: 20 days
Daily Burn Rate: $1.8M/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: 8508937693!DISTILLATE,NAVAL
Place of Performance
Location: CHICAGO, COOK County, ILLINOIS, 60606
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $35.3 million to BP PRODUCTS NORTH AMERICA INC. for work described as: 8508937693!DISTILLATE,NAVAL Key points: 1. Significant award for naval distillate fuel, a critical component for naval operations. 2. BP Products North America Inc. is a major player in the energy sector. 3. Potential risk associated with reliance on a single supplier for a critical fuel. 4. Spending falls within the broad energy sector, specifically petroleum refining.
Value Assessment
Rating: good
The award amount of $35.3M for naval distillate fuel appears reasonable given market prices for refined petroleum products. Benchmarking against similar fuel 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, suggesting a competitive bidding process. This method generally leads to better price discovery and value for the government.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential fuel procurement.
Public Impact
Ensures a steady supply of fuel for naval vessels, critical for national security and readiness. Supports the energy sector and associated jobs through government procurement. Potential for price fluctuations in the global oil market impacting future contract costs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Fuel price volatility
- Supply chain disruptions
Positive Signals
- Competitive award process
- Established supplier
Sector Analysis
This contract falls under the petroleum refineries sector, which is vital for national infrastructure and defense. Spending benchmarks for fuel procurement vary widely based on volume and type, but this award appears substantial.
Small Business Impact
The data indicates this contract was not awarded to small businesses, which is common for large-scale fuel procurements requiring significant infrastructure and capacity.
Oversight & Accountability
The Department of Defense and the Defense Logistics Agency are responsible for overseeing fuel procurement. Standard oversight mechanisms for contract performance and delivery are expected to be in place.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for price volatility in the energy market.
- Dependence on a single supplier for a critical resource.
- Geopolitical factors impacting global fuel supply and pricing.
- Supply chain vulnerabilities in the refining and distribution network.
Tags
petroleum-refineries, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.3 million to BP PRODUCTS NORTH AMERICA INC.. 8508937693!DISTILLATE,NAVAL
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 $35.3 million.
What is the period of performance?
Start: 2022-03-11. End: 2022-03-31.
What is the historical price trend for naval distillate fuel over the past five years, and how does this contract price compare?
Analyzing historical price trends for naval distillate fuel is crucial for assessing the long-term value of this contract. Comparing the awarded price against these trends, as well as against benchmark prices for similar refined fuels, would reveal whether the government secured a favorable rate. Fluctuations in crude oil prices, refining costs, and geopolitical events can significantly impact fuel prices, making historical context essential for a comprehensive value assessment.
What are the specific risks associated with relying on BP Products North America Inc. for this critical fuel supply?
Risks associated with relying on a single supplier like BP Products North America Inc. include potential supply disruptions due to operational issues, natural disasters, or geopolitical events affecting their production or distribution. There's also a risk of price gouging if competition is limited in future solicitations. Furthermore, dependence on one entity could impact the government's flexibility in responding to urgent needs or securing alternative sources quickly.
How effectively does this contract support the operational readiness of the U.S. Navy's fleet?
This contract directly supports the operational readiness of the U.S. Navy's fleet by ensuring a consistent and reliable supply of naval distillate fuel. This fuel is essential for the propulsion and operation of various naval vessels. The timely delivery and quality of the fuel procured under this contract are paramount to maintaining the fleet's ability to conduct missions, exercises, and deployments without interruption.
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: FIRM FIXED PRICE (J)
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, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $35,277,473
Exercised Options: $35,277,473
Current Obligation: $35,277,473
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE60221D0475
IDV Type: IDC
Timeline
Start Date: 2022-03-11
Current End Date: 2022-03-31
Potential End Date: 2022-03-31 00:00:00
Last Modified: 2022-12-01
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