DoD's $201M Aviation Turbine Fuel Contract Awarded to Valero Marketing and Supply Co
Contract Overview
Contract Amount: $20,112,792 ($20.1M)
Contractor: Valero Marketing and Supply CO
Awarding Agency: Department of Defense
Start Date: 2024-12-30
End Date: 2025-03-21
Contract Duration: 81 days
Daily Burn Rate: $248.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: 8511098014!TURBINE FUEL,AVIATION
Place of Performance
Location: SAN ANTONIO, BEXAR County, TEXAS, 78249
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $20.1 million to VALERO MARKETING AND SUPPLY CO for work described as: 8511098014!TURBINE FUEL,AVIATION Key points: 1. Significant contract value of $201 million for aviation turbine fuel. 2. Awarded under full and open competition, suggesting market availability. 3. Potential risk associated with fuel price volatility and supply chain disruptions. 4. Spending falls within the Petroleum Refineries sector (NAICS 324110).
Value Assessment
Rating: good
The contract value of $201,127,920 appears reasonable given the commodity nature of aviation turbine fuel and the duration of the contract. Benchmarking against similar large-scale fuel procurements would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair market value.
Taxpayer Impact: The competitive award process aims to secure the best possible price for taxpayers, minimizing unnecessary expenditure on this critical fuel supply.
Public Impact
Ensures continued operational readiness for military aviation assets. Supports critical defense logistics and deployment capabilities. Impacts the broader energy market due to the scale of the purchase.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Fuel price volatility
- Geopolitical supply chain risks
- Dependence on a single awardee for this specific delivery order
Positive Signals
- Awarded under full and open competition
- Firm Fixed Price contract type
- Supports critical national defense functions
Sector Analysis
This contract falls under the Petroleum Refineries sector, specifically for aviation turbine fuel. Spending benchmarks for this sector are highly dependent on global oil prices and geopolitical factors, making direct comparisons challenging without specific market data.
Small Business Impact
The data indicates this contract was not awarded to small businesses (ss: false, sb: false). The scale and nature of aviation fuel supply typically favor larger, established companies with significant infrastructure and capacity.
Oversight & Accountability
The Defense Logistics Agency (DLA) is responsible for this procurement. Oversight would involve monitoring contract performance, delivery schedules, and adherence to the firm fixed price terms to ensure accountability.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Commodity price volatility
- Supply chain disruption risk
- Geopolitical instability impacting fuel markets
- Potential for price fluctuations not captured by fixed price if market drops
Tags
petroleum-refineries, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.1 million to VALERO MARKETING AND SUPPLY CO. 8511098014!TURBINE FUEL,AVIATION
Who is the contractor on this award?
The obligated recipient is VALERO MARKETING AND SUPPLY CO.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $20.1 million.
What is the period of performance?
Start: 2024-12-30. End: 2025-03-21.
What is the historical price trend for aviation turbine fuel over the contract period, and how does the firm fixed price compare?
Analyzing historical price trends for aviation turbine fuel is crucial. A firm fixed price contract locks in the cost, which can be advantageous if prices rise but disadvantageous if they fall. Comparing the awarded price against market benchmarks and projected price movements will reveal the value realized by the DoD and the potential savings or losses for taxpayers.
What are the specific risks associated with Valero Marketing and Supply Co. as the sole awardee for this delivery order, considering potential supply chain disruptions?
While awarded under full and open competition, this specific delivery order is with one entity. Risks include potential disruptions to Valero's supply chain due to geopolitical events, natural disasters, or internal operational issues. The DoD's contingency plans and Valero's own risk mitigation strategies are critical to ensuring uninterrupted fuel supply for military operations.
How effectively does this contract support the DoD's long-term energy security and operational readiness goals?
This contract directly supports immediate operational readiness by securing a vital fuel source. However, its effectiveness in achieving long-term energy security depends on the DoD's broader strategy, including diversification of suppliers, investment in alternative fuels, and robust inventory management. This single award is a tactical fulfillment, not necessarily a strategic long-term solution.
Industry Classification
NAICS: Manufacturing › Petroleum and Coal Products Manufacturing › Petroleum Refineries
Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Valero Energy Corporation
Address: 1 VALERO WAY, SAN ANTONIO, TX, 78249
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $20,112,792
Exercised Options: $20,112,792
Current Obligation: $20,112,792
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE60224D0471
IDV Type: IDC
Timeline
Start Date: 2024-12-30
Current End Date: 2025-03-21
Potential End Date: 2025-03-21 00:00:00
Last Modified: 2025-02-19
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