Matthew Shuster Supplier Relationship Manager - PowerPoint Presentation

Slide1

Matthew Shuster

Supplier Relationship Manager

2019 DLA Energy Worldwide Energy ConferenceMay 20-22, 2019

Bulk

Bid Evaluation Model

Bulk Fuels Business Model

2

Procure petroleum products in very large volumes Fewer contracts with large dollar values Estimated quantity with high minimum lift guarantee (75 percent)

Awards on FOB Origin and FOB Destination basis

Extensive use of commercial distribution systems (pipeline and truck)

Distribution may be direct to demand point or through intermediate defense fuel support

p

oints

Socio-economic considerations

Small business set-asides (price

m

atching)

HubZone

Premium Program

8(a) reservation

Bid Evaluation

Model

3The Bulk Bid Evaluation Model, also known as BEM, is a mixed-integer linear optimization program used to find the minimum laid down cost for the entire requirements of a purchase program

Laid

down

p

rice

includes:

Offered

product price

All transportation costs

All additive costs

All intermediate

defense fuel support point

distribution costs (fixed and variable costs)

Excess

throughput charges

Unique

costs for specific receipt

mode

Offer specific evaluation factors

Base reference price evaluation factors

Offer conditions

Offer

Conditions

4 Offer ConditionsOptional

BEM evaluates complex

offers

Tiered pricing

Block pricing

Volume restrictions (Minimums and Maximums)

Multiple load capabilities (modes of transportation)

Parcel size limitations

Additive injection capabilities

Offer conditions such as

“Either/Or”

and

“One

before

Two”

Conflicting

Conditions

Conditional

statements

must

not conflict with each other (

i.e., minimum

award by

tanker

is 5 million and

overall

maximum award is 3 million)

Evaluation Example

5

OffersA: 6,000,000 USG by TT @ $2.95/gallonB: 6,000,000 USG by PL @ $3.00/gallon

C: 1,000,000 USG by PL @ $

2.98gallon

Requirements

Base 1: 3,000,000 gallons received by TT

Base 2:

3,000,000

gallons received by TT

Base 3:

1,000,000

gallons received by TT

Intermediate Depot

Support Available

Into X by PL, out by TT to all Requirements

Into Y by PL, out by TT to all Requirements

Transportation Rates

A to 1 (TT): .28/gallon

A to 2 (TT): .20/gallonA to 3 (TT): .23/gallonB to X (PL): .02/gallonB to Y (PL): .02/gallonC to X (PL): .01/gallonC to Y (PL): .04/gallonX to 1 (TT): .05/gallonX to 2 (TT): .02/gallonX to 3 (TT): .05/gallonY to 1 (TT): .04/gallonY to 2 (TT): .06/gallonY to 3 (TT): .02/gallon

PL = Pipeline; TT = Tank Truck

Offer A

6,000,000 USG @$2.95

Offer C1,000,000 USG @$2.98

Offer B6,000,000 USG @$3.00

DFSP X

DFSP Y

Base 31,000,000 USG

Base 23,000,000 USG

Base 13,000,000 USG

.28

.02

.05

.01

.02

.05

.02

.04

.02

.04

.20

.23

.06

Req

1 – Offer A (total cost $3.23/gal)

Req

2 – Offer A (total cost $3.15/gal)

Req

3 – Offer C (total cost $3.04/gal)

Total cost: $22,180,000

Req

1 – Offer B (total cost $

3.06/gal

)

Req

2 – Offer C (total cost $3.01/gal)

Req

2 – Offer B (total cost $3.04/gal)Req 3 – Offer B(total cost $3.04/gal)Total cost: $21,310,000 $870K SavingsDistribution Plan Generated

Evaluated on Offered Price Only:

Evaluated on Laid-Down Cost:

BEM Rounds

6

BEM

Minimum Cost

Bid Evaluation Worksheet7

Laid Down Cost Report

8

Sequence of BEM Runs

9

Final Forced Run

Small Business Set-Aside Run

HUBZone

Run

8(a) Run

Base Run

Post Award

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Once the solicitation is awarded, the BEM reports will be published on Federal Business Opportunities website

at

https://www.fbo.gov

/

For questions specific

on

an offer, please contact the

contracting

o

fficer

listed on the

solicitation

Contact Information

11

For questions concerning the functionality of BEM/OET, please contact:

Matthew Shuster

Matthew.Shuster@dla.mil

Wo

rk

: (571) 767-9250

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QUESTIONS

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