DoD's $20.1M Aviation Turbine Fuel Contract Awarded to S-OIL Corporation

Contract Overview

Contract Amount: $20,081,749 ($20.1M)

Contractor: S-Oil Corporation

Awarding Agency: Department of Defense

Start Date: 2025-03-21

End Date: 2025-04-16

Contract Duration: 26 days

Daily Burn Rate: $772.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: 8511263706!TURBINE FUEL,AVIATION

Plain-Language Summary

Department of Defense obligated $20.1 million to S-OIL CORPORATION for work described as: 8511263706!TURBINE FUEL,AVIATION Key points: 1. Significant award for aviation fuel, a critical defense commodity. 2. Competition method is 'Full and Open', suggesting potential for competitive pricing. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces price volatility risk. 4. Sector is Petroleum Refineries, with a NAICS code of 324110.

Value Assessment

Rating: fair

The award amount of $20.1M for a 26-day duration is substantial. Benchmarking against similar aviation fuel contracts is difficult without more specific volume and grade data, but the FPEPA clause warrants close monitoring for price escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition', which generally promotes competitive pricing. However, the specific impact on price discovery for this particular delivery order is not detailed.

Taxpayer Impact: Taxpayer funds are being used for essential aviation fuel. The FPEPA clause means taxpayers are exposed to potential price increases in the fuel market during the contract period.

Public Impact

Ensures supply of critical aviation fuel for Department of Defense operations. Potential for price fluctuations due to the economic price adjustment clause. Supports the petroleum refining sector through government procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic Price Adjustment (EPA) clause can lead to cost overruns.
Short contract duration (26 days) may limit long-term price stability.
Sole supplier for this specific delivery order, though competition was full and open initially.

Positive Signals

Awarded under full and open competition.
Addresses a critical operational need for the DoD.

Sector Analysis

The petroleum refining sector is vital for energy security and military operations. Spending in this sector can fluctuate based on global oil prices and geopolitical events. This award falls within the typical range for bulk fuel procurement.

Small Business Impact

This contract was awarded to S-OIL CORPORATION, a large corporation, and there is no indication of small business participation or set-aside in the provided data.

Oversight & Accountability

The Defense Logistics Agency (DLA) is responsible for this procurement. Oversight would focus on ensuring fuel quality, timely delivery, and appropriate application of the economic price adjustment clause.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Price escalation risk due to FPEPA.
Potential for market volatility impacting fuel costs.
Short contract duration may not reflect long-term cost efficiencies.
Lack of specific volume data hinders detailed cost analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to S-OIL CORPORATION. 8511263706!TURBINE FUEL,AVIATION

Who is the contractor on this award?

The obligated recipient is S-OIL CORPORATION.

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: 2025-03-21. End: 2025-04-16.

What is the projected volume of fuel for this award, and how does the unit price compare to market benchmarks for aviation turbine fuel?

The provided data does not specify the exact volume of fuel. Without this, a precise unit cost comparison to market benchmarks is not possible. However, the contract type (FPEPA) suggests that the base price is subject to adjustments based on economic factors, making a static benchmark comparison less straightforward.

What are the specific economic factors that trigger price adjustments under the FPEPA clause, and what is the historical volatility of these factors?

The FPEPA clause typically adjusts prices based on indices related to crude oil prices, refining costs, and transportation. The historical volatility of these factors can be significant, influenced by global supply and demand, geopolitical events, and currency exchange rates, posing a risk of price escalation.

How does the Defense Logistics Agency ensure fair pricing and prevent excessive cost increases given the FPEPA clause on this contract?

DLA likely employs mechanisms such as pre-defined adjustment formulas tied to reliable market indices, regular reviews of price adjustments, and potentially caps or floors on price changes. They also rely on the initial 'Full and Open Competition' to establish a competitive baseline price.

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: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 192, BAEKBEOM-RO, SEOUL

Business Categories: Category Business, Foreign Owned, International Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $20,081,749

Exercised Options: $20,081,749

Current Obligation: $20,081,749

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60225D0459

IDV Type: IDC

Timeline