Tab 09 Att - BEM Overview.pdf
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- Solicitation number
- SPE602-26-R-0706
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Defense Logistics Agency Energy
About this file
This document is a presentation on the Bulk Bid Evaluation Model (BEM), a procurement tool used by the Defense Logistics Agency (DLA) for evaluating bulk petroleum product bids. The BEM is an optimization program employing mixed-integer linear evaluation to determine the minimum laid-down cost for large-volume petroleum procurements. The model evaluates offers based on total cost of ownership rather than offered price alone, incorporating transportation costs, additive costs, storage and onward distribution costs, fixed and variable costs, and excess throughput charges. The procurement process addresses bulk petroleum characteristics including large volumes and dollar values, estimated quantities with 75% minimum lift guarantees, FOB Origin and FOB Destination basis awards, and extensive use of commercial distribution systems with delivery either direct to point of demand or through intermediate terminals.
The BEM accommodates various offer conditions including volume restrictions, multiple transport and delivery modes, injection capabilities, and tiered or block pricing structures. For domestic procurements, the model integrates socio-economic considerations including 8(a) reservations, HUB Zone Premium Program participation, and Small Business Set-asides with price matching. The evaluation process operates through multiple rounds: Initial Offers (Round 1), Interim Offers (Round 2) with a Minimum Cost Bid Evaluation Sheet, Final Offers (Round 3) with both the Minimum Cost Bid Evaluation Sheet and Laid Down Cost Report, and a Price Reduction Round. The model sequence for final awards follows Base Run, 8(A) Run, HUBZone Run, Small Business Set-Aside Run, Final Forced Run, and Optimization Run. The document includes sample evaluation sheets and laid-down cost reports demonstrating application of the model to specific procurement scenarios.
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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 |
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