DoD's $14.8M Naval Distillate Contract Awarded to S-OIL Corporation Amidst Fixed Price with EPA
Contract Overview
Contract Amount: $14,828,396 ($14.8M)
Contractor: S-Oil Corporation
Awarding Agency: Department of Defense
Start Date: 2025-12-03
End Date: 2025-12-22
Contract Duration: 19 days
Daily Burn Rate: $780.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: 8511790292!DISTILLATE,NAVAL
Plain-Language Summary
Department of Defense obligated $14.8 million to S-OIL CORPORATION for work described as: 8511790292!DISTILLATE,NAVAL Key points: 1. Contract value of $14.8M for naval distillate. 2. Awarded to S-OIL CORPORATION under full and open competition. 3. Potential risk associated with fixed price with economic price adjustment. 4. Spending falls within the Petroleum Refineries sector.
Value Assessment
Rating: good
The contract value of $14.8M for naval distillate appears reasonable given the fixed price with economic price adjustment structure. Benchmarking against similar contracts for fuel procurement 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, suggesting a competitive bidding process. This method generally leads to better price discovery and potentially lower costs for the government.
Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by leveraging market forces to achieve competitive pricing.
Public Impact
Ensures supply of critical naval distillate for defense operations. Potential for price fluctuations due to economic price adjustment clause. Supports the Department of Defense's logistical capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 78 / 10
Warning Flags
- Economic price adjustment may lead to cost overruns.
- Limited duration of the delivery order.
Positive Signals
- Full and open competition utilized.
- Clear end date for delivery.
Sector Analysis
This contract falls under the Petroleum Refineries sector, specifically for naval distillate. Spending benchmarks for fuel procurement by the Department of Defense can vary significantly based on market conditions and geopolitical factors.
Small Business Impact
There is no indication that small businesses were involved in this specific contract award. Further analysis would be needed to determine if subcontracting opportunities were offered or utilized.
Oversight & Accountability
The Department of Defense, through the Defense Logistics Agency, is responsible for overseeing this contract. Standard oversight procedures for fuel procurement and delivery are expected to be in place.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Economic Price Adjustment (EPA) clause introduces cost uncertainty.
- Limited contract duration (delivery order).
- Potential single-source dependency risk.
- No explicit mention of small business participation.
Tags
petroleum-refineries, department-of-defense, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.8 million to S-OIL CORPORATION. 8511790292!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 $14.8 million.
What is the period of performance?
Start: 2025-12-03. End: 2025-12-22.
What is the historical price trend for naval distillate and how might the economic price adjustment impact the final cost?
Historical price trends for naval distillate are influenced by global crude oil prices, refining capacity, and geopolitical events. The economic price adjustment (EPA) clause allows for price changes based on specified indices, typically related to inflation or commodity prices. This means the final cost could be higher or lower than the initial fixed price, depending on market fluctuations. Without specific EPA indices, it's difficult to quantify the exact potential impact, but it introduces variability and potential for increased expenditure.
What are the specific risks associated with relying on a single supplier like S-OIL CORPORATION for this critical fuel, even under full and open competition?
Even with full and open competition, reliance on a single supplier for a critical resource like naval distillate presents risks. These include potential supply chain disruptions due to the supplier's internal issues, geopolitical instability affecting their operations, or unforeseen events like natural disasters. If S-OIL CORPORATION faces production or logistical challenges, it could impact the DoD's operational readiness. Diversification of suppliers, where feasible, can mitigate such risks.
How effectively does the fixed price with economic price adjustment structure balance cost control with ensuring supply availability for naval distillate?
The fixed price with economic price adjustment (EPA) structure attempts to balance cost control and supply availability by setting a base price while allowing for adjustments based on market conditions. This can incentivize suppliers to bid competitively while ensuring they are not unduly penalized by unforeseen economic shifts, thus promoting supply continuity. However, the EPA component introduces uncertainty in the final cost, potentially leading to higher-than-anticipated spending for the government if inflation or commodity prices rise significantly.
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: $14,828,396
Exercised Options: $14,828,396
Current Obligation: $14,828,396
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE60225D0459
IDV Type: IDC
Timeline
Start Date: 2025-12-03
Current End Date: 2025-12-22
Potential End Date: 2025-12-22 00:00:00
Last Modified: 2025-12-18
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