Tab 09 Att 9 - BEM Overview.pdf

Bulk Bid Evaluation Model (BEM)

Sean Lucas October 21, 2024

WARFIGHTER ALWAYSPEOPLE PRECISION POSTURE PARTNERSHIPS

Bulk Petroleum Procurement Characteristics

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• 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)

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• 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

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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)

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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

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CUI

Laid Down Cost Report

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CUI

Model Sequence

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Small Business Set-Aside Run

HUBZone Run

8(A) Run

Base Run

Optimization Run

Final Forced Run

CUI

Contact Information

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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