DoD's $19.6M Naval Distillate Contract Awarded to S-OIL Corporation

Contract Overview

Contract Amount: $19,622,413 ($19.6M)

Contractor: S-Oil Corporation

Awarding Agency: Department of Defense

Start Date: 2025-09-25

End Date: 2025-10-25

Contract Duration: 30 days

Daily Burn Rate: $654.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: 8511667754!DISTILLATE,NAVAL

Plain-Language Summary

Department of Defense obligated $19.6 million to S-OIL CORPORATION for work described as: 8511667754!DISTILLATE,NAVAL Key points: 1. Significant award for naval distillate fuel, a critical defense commodity. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Risk is moderate, tied to fuel price volatility and supply chain disruptions. 4. Sector focus is Defense Logistics, highlighting essential operational support.

Value Assessment

Rating: good

The award price of $19.6M for naval distillate appears reasonable given the fixed price with economic price adjustment structure. Benchmarking against similar fuel contracts would provide a more precise assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes price discovery and competitive pricing for the government.

Taxpayer Impact: The competitive nature of this award is expected to yield fair market prices, minimizing unnecessary taxpayer expenditure on essential fuel supplies.

Public Impact

Ensures a steady supply of naval distillate fuel for Department of Defense operations. Supports the readiness and operational capabilities of naval forces. Impacts the energy market, particularly for specialized fuel types.

Waste & Efficiency Indicators

Waste Risk Score: 65 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause.
Geopolitical risks affecting global oil prices and supply chain stability.

Positive Signals

Awarded through full and open competition.
Supports critical defense logistics and operational readiness.

Sector Analysis

This contract falls within the Defense Logistics sector, specifically for fuel procurement. Spending benchmarks for petroleum products can vary significantly based on market conditions and geopolitical factors.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine if small businesses had an opportunity to participate.

Oversight & Accountability

The award was made by the Defense Logistics Agency, a key entity responsible for managing the supply chain for the U.S. military. Oversight would focus on contract performance and adherence to terms.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Economic price adjustment may lead to cost overruns.
Dependence on global oil markets introduces price volatility risk.
Potential for supply chain disruptions affecting delivery.
Limited duration may not reflect long-term strategic sourcing benefits.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to S-OIL CORPORATION. 8511667754!DISTILLATE,NAVAL

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 $19.6 million.

What is the period of performance?

Start: 2025-09-25. End: 2025-10-25.

What is the expected impact of the economic price adjustment on the final cost?

The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic indicators, typically related to the cost of raw materials or labor. For naval distillate, this often means the price can increase or decrease in response to changes in crude oil prices. The final cost will depend on the volatility of the oil market between the award and delivery dates.

How does the competition level compare to similar fuel procurement contracts?

The contract was awarded under 'full and open competition,' which is generally the preferred method for maximizing competition. Without specific data on the number of bids received or the benchmark pricing for comparable naval distillate contracts, it's difficult to definitively assess if this competition level was optimal or if it resulted in the best possible price discovery.

What are the primary risks associated with this contract's duration and delivery schedule?

The contract has a short duration of 30 days with a single delivery order, suggesting a focused procurement for immediate or near-term needs. The primary risks are related to potential supply disruptions during this short window and the immediate impact of any price volatility in the petroleum market, which could affect the final cost due to the EPA clause.

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: $19,622,413

Exercised Options: $19,622,413

Current Obligation: $19,622,413

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60225D0459

IDV Type: IDC

Timeline