- Id
- 2026PRNOC-1255
- Status
- complete
- Procurement Method
- direct
- Procurement Method Details
- Direct award
- Why this procedure was chosen
- MGO is a commodity. It is traded on international commodity markets and priced by reference to published market indices for the grade at the relevant port, with bunker suppliers quoting on a short term basis reflecting the market at the point of enquiry. Price and availability are driven by market conditions rather than by the terms of any tender, which means requiring suppliers to tender in the usual manner is unnecessary, not appropriate, and would not drive the best outcome for the contracting authority.
MGO is a standardised product defined by ISO 8217/2024/2017, a published international technical standard for marine distillate fuels. The specification for this requirement is set entirely by that market standard and by regulatory compliance obligations, being MARPOL Annex VI Regulation 14 for sulphur content within the North American Emission Control Area and SOLAS flash point requirements, rather than by any buyer preference or bespoke requirement. Any supplier able to deliver ISO 8217 grade DMA fuel to the vessel at the port of delivery is capable of fulfilling the contract, and the product itself is not meaningfully differentiable between compliant suppliers.
The requirement was competed through a competitive quotation exercise among suppliers able to deliver to the vessel at the port and on the date required, priced on a common specification and quantity on a best and final basis. Award was made on the basis of the Most Advantageous Tender. A firm fixed price has been secured at the point of quotation and the supplier's offer is irrevocable until the last day of the delivery window.
The fuel is required for the operational bunkering of RRS Discovery at the Port of Halifax, Nova Scotia on 4 October 2026, ahead of a scheduled departure, making this a time-critical requirement against a fixed delivery date. The port of delivery is outside the United Kingdom and the pool of suppliers capable of delivering to the vessel is limited to those holding stock and delivery capacity at that port within the required window.
For these reasons the procurement qualifies for direct award under the commodities justification at paragraph 10 of Schedule 5 to the Procurement Act 2023: the goods are purchased on a commodity market, the specification is determined by an established market standard, and the authority has nonetheless conducted a competitive process to secure best value.
- Published risks
- Price volatility: MGO is a commodity fuel subject to market price fluctuation. A firm fixed price has been secured at the point of quotation and the supplier's offer is irrevocable until the last day of the delivery window, but wider market movements could affect supplier willingness to perform if there is a material delay between award and delivery.
Local taxes and duties: the delivery is made at an overseas port and the price is quoted delivered to the vessel. Liability for local sales, excise, or fuel taxes, and the availability of any relief applicable to fuel bunkered for a vessel on an international voyage, has been confirmed with the supplier in advance of award. A change in that treatment at the point of lifting would affect the delivered cost.
Delivery logistics: delivery is into a working commercial port by bunker barge or road tank wagon, with third party agent-controlled access and a berth-controlled window. Risks include barge or vehicle availability at short notice, port access restrictions, weather, and sea state affecting a transfer alongside. The delivery date falls on a Sunday, which carries additional risk to barge crew, agent, and berth availability, and may attract weekend working charges. The exact delivery window and operational hours are confirmed to the supplier no later than five days before delivery.
Vessel programme risk: the delivery is tied to the vessel's ETA and ETD window at berth. A change to the vessel's programme would require the delivery date to be moved. The supplier has confirmed that no change to the delivery date alters the price quoted.
Quantity variance: the quantity delivered may differ from the estimate due to the operational fuelling process, available tank capacity at the time of bunkering, and density variance. Payment is made solely on the actual quantity delivered as evidenced by the Bunker Delivery Note, and the purchase order value may require amendment to reflect the actual delivered quantity. Quantity is measured in metric tonnes by reference to the density recorded on the Certificate of Analysis for the fuel actually delivered, measured at 15 degrees Celsius.
Specification non-compliance: there is a risk that fuel delivered does not meet ISO 8217 for the grade ordered, the 0.10 per cent Emission Control Area sulphur limit, the flash point requirement, or the cold flow requirement on arrival. This would require rejection of the delivery and sourcing from an alternative supplier at short notice, with potential impact on vessel departure. The port of delivery is remote from the authority's usual supply base, which limits the practical alternatives available within the window.
Documentation failure: the requirement for the fuel specification, representative fuel samples, the Technical Data Sheet with Certificate of Analysis, the Safety Data Sheet, and the Bunker Delivery Note with the MARPOL Annex VI Regulation 18 declaration creates a risk that incomplete documentation is provided at the time of bunkering. This could affect regulatory compliance and the outcome of port state control inspection.
Single supplier and remote port: the delivery is awarded to one supplier at a port outside the United Kingdom where the number of suppliers holding stock and delivery capacity within the required window is limited. Failure to perform would be difficult to remedy at short notice from the same port, and the contingency is a revised bunkering plan at the next port of call rather than substitution at Halifax.