DoD's $22M aviation turbine fuel contract awarded to Motor Oil (Hellas) Corinth Refineries S.A

Contract Overview

Contract Amount: $22,047,764 ($22.0M)

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

Awarding Agency: Department of Defense

Start Date: 2025-09-03

End Date: 2025-09-10

Contract Duration: 7 days

Daily Burn Rate: $3.1M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: 8511614603!TURBINE FUEL,AVIATION

Plain-Language Summary

Department of Defense obligated $22.0 million to MOTOR OIL (HELLAS) CORINTH REFINERIES S.A. for work described as: 8511614603!TURBINE FUEL,AVIATION Key points: 1. The contract value represents a significant investment in aviation fuel for defense operations. 2. Competition dynamics for this fuel type are crucial for ensuring cost-effectiveness and supply chain resilience. 3. Potential risks include price volatility of crude oil and geopolitical factors affecting supply. 4. Performance will be assessed based on timely delivery and fuel quality meeting stringent military specifications. 5. This contract positions the Defense Logistics Agency within the broader energy and defense logistics sector. 6. The fixed-price structure with economic price adjustment aims to mitigate some market fluctuation risks.

Value Assessment

Rating: good

The contract value of approximately $22 million for a 7-day delivery period appears reasonable given the nature of aviation turbine fuel. Benchmarking against similar large-volume fuel procurements by the DoD would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment (FPEPA) contract type suggests an effort to balance cost certainty with market volatility, which is a common approach for commodity-based contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is expected to drive favorable pricing and ensure a robust selection of suppliers. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of market interest and participation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better terms for the government.

Public Impact

Military aviation units within the Department of Defense are the primary beneficiaries, ensuring operational readiness. The service delivered is critical aviation turbine fuel, essential for flight operations. The geographic impact is likely global, supporting deployed forces, though the specific delivery location is not detailed. Workforce implications are minimal for this specific contract, primarily affecting logistics and procurement personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if crude oil prices surge.
Dependence on a single supplier for this specific delivery order could pose a risk if unforeseen issues arise with the contractor.
Geopolitical instability in regions supplying crude oil could impact fuel availability and cost.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing and a vetted supplier.
The fixed-price with economic price adjustment structure provides some cost predictability while allowing for market fluctuations.
The Defense Logistics Agency's expertise in managing fuel contracts ensures adherence to quality and delivery standards.

Sector Analysis

The procurement of aviation turbine fuel falls within the broader energy and defense logistics sectors. The market for such fuels is global and subject to significant price volatility driven by crude oil markets, geopolitical events, and refining capacity. This contract represents a specific, short-term demand within the larger defense fuel supply chain, which is a critical component of national security. Comparable spending benchmarks would involve analyzing other large-scale fuel procurements by military branches or government agencies.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Given the nature and scale of aviation fuel procurement, it is likely that large, established refineries or distributors are the primary participants. Subcontracting opportunities for small businesses are not explicitly detailed but could potentially exist in areas such as transportation or specialized logistics services if utilized by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA), which is responsible for procuring and distributing fuel for the DoD. Accountability measures would include performance monitoring against delivery schedules and fuel quality specifications. Transparency is generally maintained through contract award databases, though specific operational details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Fuel Procurement
Military Aviation Fuel Services
Aviation Turbine Fuel Market
Petroleum Refining Industry
Fixed Price with Economic Price Adjustment Contracts

Risk Flags

Price Volatility Risk
Supply Chain Disruption Risk
Geopolitical Instability Impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.0 million to MOTOR OIL (HELLAS) CORINTH REFINERIES S.A.. 8511614603!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 $22.0 million.

What is the period of performance?

Start: 2025-09-03. End: 2025-09-10.

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

The Defense Logistics Agency (DLA) is the primary procurer of fuel for the U.S. military, and its spending on aviation turbine fuel is substantial and consistent, reflecting the continuous operational needs of air power. Historical data indicates that DLA awards billions of dollars annually for various types of fuel, including JP-8 and other aviation-grade fuels. Spending fluctuates based on global oil prices, geopolitical events, and changes in military operational tempo. For instance, periods of increased deployment or conflict often correlate with higher fuel demand and, consequently, higher spending. The agency utilizes a mix of contract types, including fixed-price with economic price adjustment, to manage price volatility. Analyzing DLA's historical contract awards for aviation fuel reveals a pattern of large-volume, recurring procurements, often through competitive bidding processes, to ensure supply chain security and cost-effectiveness for a critical national defense resource.

How does the price per unit of this contract compare to market rates for aviation turbine fuel?

Determining the precise price per unit and comparing it to market rates for this specific contract is challenging without knowing the exact quantity of fuel procured under the $22 million award and the specific type of aviation turbine fuel (e.g., JP-8, Jet A-1). Aviation turbine fuel prices are highly volatile, influenced by crude oil prices, refining costs, transportation, and regional supply-demand dynamics. The contract's 'Fixed Price with Economic Price Adjustment' (FPEPA) clause further complicates direct comparison, as the final price can vary. However, general market indicators for bulk aviation fuel can be referenced. For example, if this contract were for JP-8, a common military specification, market prices can range significantly. A rough estimate, assuming a substantial volume, might place the price per gallon in the range of $3-$5, but this is highly speculative. A more accurate assessment would require access to the specific quantity details and current market benchmarks from sources like the Energy Information Administration (EIA) or specialized defense fuel market reports.

What are the key performance indicators (KPIs) for this contract, and how will they be measured?

Key performance indicators (KPIs) for this aviation turbine fuel contract would primarily focus on ensuring the timely delivery of fuel that meets stringent quality specifications. Specific KPIs would likely include: 1. On-Time Delivery: Measuring the percentage of deliveries made by the agreed-upon date and time. Failure to deliver on schedule can ground aircraft and disrupt operations. 2. Quality Compliance: Ensuring the fuel meets all military specifications (e.g., MIL-DTL-83133 for JP-8) for purity, additives, and performance characteristics. This would be verified through laboratory testing of fuel samples. 3. Quantity Accuracy: Confirming that the correct volume of fuel is delivered as per the order. 4. Price Adherence: While subject to economic price adjustment, the base price and the application of the adjustment formula must be monitored. Measurement would involve delivery receipts, quality control reports from testing facilities, and audits of invoicing against contract terms. Performance failures could lead to penalties or contract termination.

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

Motor Oil (Hellas) Corinth Refineries S.A. is a major player in the energy sector, primarily known for its refining operations in Greece. While its primary business is commercial, large international energy companies often engage in government contracting, especially for fuel supply to military forces. Information on their specific track record as a U.S. federal government contractor, particularly for the Department of Defense, would typically be available through federal procurement databases like SAM.gov or FPDS. Such records would detail past awards, contract performance history, and any past performance issues or disputes. Given the scale of their refining capacity, it is plausible they possess the capability to supply large volumes of military-grade fuels. However, without direct access to their specific U.S. government contract history, a definitive assessment of their track record in this capacity cannot be made. Their established presence in the refining industry suggests a baseline capability, but government contracting often involves specific compliance and logistical requirements.

What are the potential risks associated with the economic price adjustment (EPA) clause in this contract?

The Economic Price Adjustment (EPA) clause in this contract is designed to allow for adjustments to the fixed price based on fluctuations in specific economic factors, typically related to the cost of raw materials or labor. For aviation turbine fuel, the primary driver for EPA would be the price of crude oil. The key risk associated with an EPA clause is that it can lead to higher costs for the government if the underlying economic indicators increase significantly. While it protects the contractor from losses due to unforeseen cost escalations, it transfers some of that risk to the government. In a volatile energy market, this could result in the government paying substantially more than initially anticipated. Conversely, if prices fall, the EPA clause could lead to a price reduction, benefiting the government. The specific formula and indices used in the EPA are critical; a poorly structured clause could lead to unpredictable cost increases or administrative burdens in calculating adjustments.

How does this contract fit into the broader strategy of the Defense Logistics Agency for ensuring fuel security?

This contract, while a specific delivery order, fits into the Defense Logistics Agency's (DLA) broader strategy of ensuring global fuel security for military operations. DLA's strategy involves maintaining a diverse and resilient supply chain, utilizing multiple sources, contract types, and transportation methods. Procuring fuel through full and open competition, as indicated here, helps ensure access to a wide range of suppliers and competitive pricing, reducing reliance on any single source. The use of contracts with economic price adjustments helps manage the inherent price volatility of the global energy market, providing a degree of cost predictability. Furthermore, DLA often pre-positions fuel and maintains strategic reserves. Contracts like this one, even for short durations, contribute to meeting immediate operational demands while supporting the DLA's overarching goal of providing uninterrupted fuel support to all branches of the U.S. military, wherever and whenever needed.

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: $22,047,764

Exercised Options: $22,047,764

Current Obligation: $22,047,764

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60225D0478

IDV Type: IDC

Timeline