Tab 09 Att 9 - BEM Overview.pdf
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- Solicitation number
- SPE602-26-R-0700
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Defense Logistics Agency Energy
About this file
This document is a presentation about the Defense Logistics Agency's (DLA) Bulk Bid Evaluation Model (BEM) for petroleum product procurement. The model is a complex optimization program designed to find the minimum laid down cost for large-volume petroleum contracts, considering multiple factors such as offered product price, transportation costs, storage/distribution expenses, and various fixed and variable costs. The procurement process involves multiple evaluation rounds, including initial offers, interim offers, final offers, and a price reduction round, with a specific sequence of model runs: Base Run, 8(a) Run, HUBZone Run, Small Business Set-Aside Run, Final Forced Run, and Optimization Run.
The BEM includes socio-economic considerations for domestic procurements, such as 8(a) Reservations, HUBZone Premium Program, and Small Business Set-asides (Price Matching). The model evaluates bids using a mixed-integer linear evaluation that accounts for complex logistics scenarios, including multiple transport/delivery modes, volume restrictions, tiered/block pricing, and injection capabilities. The presentation provides a detailed visual example of how different offers can be evaluated based on their laid down cost, demonstrating that the lowest initial price may not always result in the most economical overall procurement solution.
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Bulk Bid Evaluation Model (BEM)
Sean Lucas October 21, 2024
WARFIGHTER ALWAYSPEOPLE PRECISION POSTURE PARTNERSHIPS
Bulk Petroleum Procurement Characteristics
2 of xx
• Procurement of large volumes of petroleum products
• Large dollar value contracts
• Estimated quantity with high minimum lift guarantee (75%)
• Awards on FOB Origin and FOB Destination Basis
• Extensive use of commercial distribution systems
• Distribution may be direct to point of demand or through intermediate terminal(s)
• Socio-Economic considerations (Domestic Procurements only):
• 8(a) Reservations
• HUB Zone Premium Program
• Small Business Set-asides (Price Matching)
Offer Conditions
Bid Evaluation Model (BEM)
3 of xx
• Optimization program (mixed-integer linear evaluation) used to find the minimum laid down cost for the procurement.
• Laid Down Cost considers:
• Offered product price
• Transportation costs
• Additive costs
• Storage/onward distribution costs
• Fixed costs
• Variable costs
• Excess throughput charges
• Offer specific evaluation factors
• Base Reference Price evaluation factors
Bid Evaluation
Model
Volume Restrictions
Multiple Transport /
Delivery Modes
Injection Capability
Tiered / Block Pricing
Either or / One before
Two
* Conditional statements must not conflict with one another (i.e., minimum award by mode exceeds overall maximum award volume)
CUI
CUI
(Offered Price vs. Laid Down Cost)
Evaluation Visual
4 of xx
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
PL = Pipeline; TT = Tank Truck
Offer A
6,000,000 USG @ $2.95
Offer C
1,000,000 USG @ $2.98
Offer B
6,000,000 USG @ $3.00
Intermediate Terminal X
Intermediate Terminal Y
Requirement 3
1,000,000 USG
Requirement 2
3,000,000 USG
Requirement 1
3,000,000 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 ($870,000)
Evaluated on Offered Price Only: Evaluated on Laid-Down Cost:
CUI
Evaluation Rounds
Bid Evaluation Model (BEM)
5 of xx
INITIAL OFFERS
ROUND 1
INTERIM OFFERS
ROUND 2
FINAL OFFERS
ROUND 3
PRICE REDUCTION
ROUND
Minimum Cost Bid Evaluation Sheet
Minimum Cost Bid Evaluation Sheet & Laid Down Cost Report
CUI
Minimum Cost Solution Evaluation Sheet
6 of xx
CUI
Laid Down Cost Report
7 of xx
CUI
Model Sequence
8 of xx
Small Business Set-Aside Run
HUBZone Run
8(A) Run
Base Run
Optimization Run
Final Forced Run
CUI
Contact Information
9 of xx
For questions concerning the functionality of the Bulk Bid Evaluation Model (BEM) please contact:
Sean.Lucas@dla.mil
WARFIGHTER ALWAYSPEOPLE PRECISION POSTURE PARTNERSHIPS 10 of xx
| Slide Number 1 |
| Bulk Petroleum Procurement Characteristics |
| Bid Evaluation Model (BEM) |
| Evaluation Visual |
| Bid Evaluation Model (BEM) |
| Minimum Cost Solution Evaluation Sheet |
| Laid Down Cost Report |
| Model Sequence |
| Contact Information |
| Slide Number 10 |
File details come from the government source that posted it. Updated .