DoD's $20.06M Aviation Turbine Fuel contract awarded to Motor Oil (Hellas) Corinth Refineries S.A

Contract Overview

Contract Amount: $20,081,559 ($20.1M)

Contractor: Motor OIL (hellas) Corinth Refineries S.A.

Awarding Agency: Department of Defense

Start Date: 2025-06-27

End Date: 2025-07-15

Contract Duration: 18 days

Daily Burn Rate: $1.1M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: 8511470035!TURBINE FUEL,AVIATION

Plain-Language Summary

Department of Defense obligated $20.1 million to MOTOR OIL (HELLAS) CORINTH REFINERIES S.A. for work described as: 8511470035!TURBINE FUEL,AVIATION Key points: 1. Contract value represents a significant investment in aviation fuel for defense operations. 2. The fixed-price structure with economic price adjustment aims to mitigate market volatility. 3. Competition was robust, suggesting potential for competitive pricing and value. 4. The short delivery period indicates an urgent or immediate need for these fuel supplies. 5. This contract falls within the broader category of petroleum product procurement for military readiness. 6. The award to a single entity, despite full and open competition, warrants further examination of bid outcomes.

Value Assessment

Rating: good

The contract value of approximately $20.06 million for aviation turbine fuel appears reasonable given the market for specialized fuels. Benchmarking against similar large-volume fuel procurements by the Department of Defense would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment (FPEPA) contract type is common for commodities subject to price fluctuations, aiming to balance cost control for the government with risk for the contractor. Without specific per-unit cost data or comparison to historical pricing for this exact fuel type and grade, a definitive value assessment is challenging, but the overall contract size suggests a significant operational requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified in the provided data, but the fact that it was competed broadly suggests that the Defense Logistics Agency sought the best possible pricing and terms. A high level of competition generally leads to better price discovery and can drive down costs for the government. However, the ultimate award to a single entity, Motor Oil (Hellas) Corinth Refineries S.A., implies that their offer was deemed the most advantageous.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that government funds are used efficiently. It prevents potential price gouging and encourages a wider range of suppliers to participate, fostering a healthier market.

Public Impact

The primary beneficiaries are the various branches of the Department of Defense requiring aviation turbine fuel for aircraft operations. This contract ensures the availability of critical fuel supplies necessary for maintaining military readiness and executing missions. The geographic impact is likely global, supporting deployed forces and operational readiness worldwide. Workforce implications are minimal for the contracting agency but support jobs within the petroleum refining and logistics sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if fuel markets experience significant upward volatility.
Dependence on a single supplier for a critical commodity, although competition was initially broad.
Logistical challenges in ensuring timely delivery of specialized fuel to potentially remote or operational locations.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Fixed-price element provides some cost certainty for the government.
Contract duration is relatively short, allowing for frequent re-evaluation of market conditions and supplier performance.

Sector Analysis

The procurement of aviation turbine fuel falls under the broader energy and defense logistics sectors. The market for aviation fuels is dominated by large refining companies and specialized distributors. This contract represents a specific instance of the Department of Defense's ongoing need for bulk fuel purchases to support its vast global operations. Comparable spending benchmarks would involve analyzing other large fuel contracts awarded by military branches or government agencies for similar products, considering volume, delivery terms, and market conditions at the time of award.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small businesses is likely limited to potential subcontracting opportunities, if any, that Motor Oil (Hellas) Corinth Refineries S.A. may pursue. The primary focus of this large-scale fuel procurement is on major suppliers capable of meeting the volume and logistical demands, rather than direct small business set-asides.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Defense Logistics Agency (DLA), which is responsible for procuring and distributing supplies for the U.S. military. Accountability measures are embedded in the contract terms, including delivery schedules and fuel specifications. Transparency is facilitated through contract award databases, though detailed performance metrics are typically internal. The DLA has its own Inspector General and is subject to broader government accountability frameworks.

Related Government Programs

Defense Logistics Agency Fuel Procurement
Aviation Fuel Contracts
Petroleum Product Procurement
Fixed Price with Economic Price Adjustment Contracts
Department of Defense Supply Chain Management

Risk Flags

Potential for price volatility due to economic price adjustment clause.
Short delivery window increases risk of supply chain disruption.
Dependence on a single supplier for a critical commodity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to MOTOR OIL (HELLAS) CORINTH REFINERIES S.A.. 8511470035!TURBINE FUEL,AVIATION

Who is the contractor on this award?

The obligated recipient is MOTOR OIL (HELLAS) CORINTH REFINERIES S.A..

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: 2025-06-27. End: 2025-07-15.

What is the historical spending pattern for aviation turbine fuel by the Defense Logistics Agency?

The Defense Logistics Agency (DLA) is the primary agency responsible for procuring fuel for the U.S. military, including aviation turbine fuel. Historical spending patterns reveal a consistent and substantial requirement for these fuels, often amounting to billions of dollars annually. DLA typically awards numerous contracts of varying sizes and durations to ensure a stable supply chain. Spending fluctuates based on operational tempo, global events, and prevailing market prices for crude oil and refined products. Analyzing DLA's historical data shows a trend towards competitive bidding, with awards often going to major international and domestic energy companies. The agency also utilizes various contract types, including fixed-price and cost-reimbursement, to manage risks associated with price volatility and supply chain complexities. Recent years have seen increased focus on energy security and sustainability, potentially influencing future procurement strategies and spending.

How does the pricing of this contract compare to similar aviation fuel procurements?

Directly comparing the pricing of this specific $20.06 million contract without access to the unit price and the exact specification of the aviation turbine fuel is difficult. However, the contract's structure, a Fixed Price with Economic Price Adjustment (FPEPA), is designed to account for market fluctuations. This means the final cost can vary from the initial bid based on an agreed-upon index, typically related to crude oil prices. To benchmark effectively, one would need to compare the awarded price per gallon (or other unit) against historical DLA contracts for similar fuel types (e.g., JP-8, Jet A-1) awarded during comparable market conditions. Factors like delivery location, volume, and contract duration also influence pricing. Generally, full and open competition aims to secure prices at or near market rates, but the economic price adjustment introduces a variable element that requires ongoing monitoring.

What are the potential risks associated with this contract for the government?

Several potential risks exist for the government with this contract. Firstly, the economic price adjustment (EPA) clause introduces uncertainty regarding the final cost. If global oil prices surge significantly during the contract period, the government could end up paying substantially more than initially anticipated. Secondly, while awarded under full and open competition, the reliance on a single contractor, Motor Oil (Hellas) Corinth Refineries S.A., for this specific delivery order creates a dependency. Any disruption in the supplier's production, logistics, or geopolitical stability affecting their operations could lead to supply shortages or delays, impacting military readiness. Lastly, ensuring consistent quality and adherence to stringent military specifications for aviation fuel is paramount; any deviation could have severe operational consequences.

What is the track record of Motor Oil (Hellas) Corinth Refineries S.A. as a government contractor?

Motor Oil (Hellas) Corinth Refineries S.A. is a significant player in the European energy market, primarily involved in oil refining and marketing. While their primary business is commercial, large energy companies often engage in government contracting, particularly for fuel supplies. Information regarding their specific track record as a direct U.S. federal government contractor, especially for aviation turbine fuel, would typically be found in federal procurement databases like SAM.gov or FPDS. Such records would detail past awards, contract performance history, and any instances of disputes or corrective actions. Without direct access to this specific data, it's presumed that they were deemed a responsible and capable source meeting all pre-award requirements, including financial stability and technical capacity, to be eligible for this significant Department of Defense contract.

How does the short duration (18 days) of this delivery order impact its analysis?

The extremely short duration of this delivery order (18 days from award to end date) suggests an urgent operational requirement for aviation turbine fuel. This brevity has several implications for analysis. Firstly, it implies that the procurement process, while initiated under full and open competition, likely involved expedited procedures to meet the immediate need. Secondly, the short timeframe limits the potential impact of the economic price adjustment clause, as there is less opportunity for significant price fluctuations to occur within such a narrow window. However, it also heightens the risk of supply disruption; any delay in delivery could have immediate and critical consequences for the intended military operations. Finally, it suggests this is likely a spot purchase or a fill-in order rather than a long-term supply agreement.

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: 12A IRODOU ATTIKOU, MAROUSSI

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $20,081,559

Exercised Options: $20,081,559

Current Obligation: $20,081,559

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60225D0456

IDV Type: IDC

Timeline