DoD awards $9.4M for aviation turbine fuel, with Marathon Petroleum Company LP as the contractor

Contract Overview

Contract Amount: $9,406,114 ($9.4M)

Contractor: Marathon Petroleum Company LP

Awarding Agency: Department of Defense

Start Date: 2025-12-19

End Date: 2026-01-11

Contract Duration: 23 days

Daily Burn Rate: $409.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: 8511827091!TURBINE FUEL,AVIATION

Place of Performance

Location: FINDLAY, HANCOCK County, OHIO, 45840

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $9.4 million to MARATHON PETROLEUM COMPANY LP for work described as: 8511827091!TURBINE FUEL,AVIATION Key points: 1. Contract value represents a significant portion of the overall award, indicating a substantial need for this fuel. 2. The fixed-price with economic price adjustment structure aims to mitigate market volatility for fuel costs. 3. Competition was full and open, suggesting a robust bidding process and potential for competitive pricing. 4. The contract duration is relatively short, implying a need for ongoing, potentially frequent, fuel procurements. 5. The geographic focus on Ohio (st) suggests a regional supply chain for this critical defense commodity. 6. This award falls under the broader category of petroleum refining and distribution for the defense sector.

Value Assessment

Rating: good

The award of $9.4 million for aviation turbine fuel appears reasonable given the nature of the commodity and the fixed-price with economic price adjustment contract type. While specific per-unit cost benchmarks are not provided in the data, the contract's value is substantial enough to suggest significant volume. Comparing this to other similar fuel contracts would provide a clearer picture of value for money, but the open competition suggests a degree of market validation.

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. This approach typically fosters a competitive environment, potentially leading to more favorable pricing and terms for the government. The number of bidders is not specified, but the open competition itself is a positive indicator for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives competitive offers for its essential fuel needs.

Public Impact

The Department of Defense (DoD) benefits through the reliable supply of critical aviation turbine fuel. This fuel is essential for supporting military aviation operations, ensuring readiness and mission capability. The primary geographic impact is within Ohio, where the contractor is based and likely where fuel will be supplied. The contract supports jobs within the petroleum refining and distribution sector, specifically at Marathon Petroleum Company LP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to the economic price adjustment clause, depending on market fluctuations.
Dependence on a single contractor for a significant fuel supply could pose a risk if supply chains are disrupted.

Positive Signals

Awarded through full and open competition, suggesting a competitive market for this fuel.
The fixed-price component provides some cost certainty, with adjustments only for economic factors.
The contractor, Marathon Petroleum Company LP, is a major player in the energy sector, implying established supply capabilities.

Sector Analysis

This contract falls within the petroleum refining and distribution sector, specifically serving the energy needs of the defense industry. The North American Industry Classification System (NAICS) code 324110, Petroleum Refineries, categorizes the primary business activity. The market for aviation turbine fuel is substantial, driven by both commercial and military demand. Benchmarking this contract's value against other government fuel procurements or large commercial contracts would provide further context on its scale within the industry.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary focus remains on the large prime contractor, Marathon Petroleum Company LP.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Logistics Agency (DLA), which is responsible for procuring and managing a wide range of supplies for the DoD. Accountability measures are inherent in the contract terms, including delivery schedules and fuel specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Fuel Supply Center
Aviation Fuel Procurement
Petroleum Products Contracts
DoD Energy Supply Chain

Risk Flags

Potential for price volatility due to EPA clause
Dependence on specific regional supply chain

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.4 million to MARATHON PETROLEUM COMPANY LP. 8511827091!TURBINE FUEL,AVIATION

Who is the contractor on this award?

The obligated recipient is MARATHON PETROLEUM COMPANY LP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $9.4 million.

What is the period of performance?

Start: 2025-12-19. End: 2026-01-11.

What is Marathon Petroleum Company LP's track record with the Defense Logistics Agency (DLA) for fuel supply contracts?

Marathon Petroleum Company LP is a significant entity in the energy sector. While this specific award is for aviation turbine fuel, their broader experience likely includes supplying various petroleum products to government agencies. A detailed analysis would require examining historical contract data specifically between Marathon Petroleum and the DLA, looking at past performance, delivery success rates, and any documented issues or commendations. Their established infrastructure and market presence suggest a capacity to fulfill large-scale government fuel requirements, but specific DLA performance metrics would offer a more precise assessment of their reliability in this context.

How does the $9.4 million award compare to historical spending on aviation turbine fuel by the DoD?

The $9.4 million award represents a specific delivery order under a larger contract vehicle. To compare this to historical spending, one would need to aggregate all awards for aviation turbine fuel by the DoD over several fiscal years. This would involve analyzing contract databases to identify similar procurements, noting their values, durations, and the contractors involved. Factors such as fluctuating fuel prices, changes in operational tempo, and strategic shifts in inventory management can significantly influence year-over-year spending. Without access to aggregated historical data, it's challenging to definitively state whether this $9.4 million is high, low, or average relative to past expenditures.

What are the primary risks associated with this contract, considering the economic price adjustment (EPA) clause?

The primary risk associated with the economic price adjustment (EPA) clause in this contract is potential cost escalation for the government. While EPAs are designed to protect contractors from unforeseen market volatility, they can lead to higher-than-anticipated expenditures for the government if fuel prices rise significantly. The specific formula or index used for adjustment is crucial; a poorly structured EPA could expose the DoD to substantial price increases. Mitigating this risk involves careful negotiation of the EPA terms, potentially including caps on price increases or basing adjustments on reliable, transparent market indices. Continuous monitoring of market trends is also essential.

How effective is full and open competition in ensuring competitive pricing for specialized fuels like aviation turbine fuel?

Full and open competition is generally the most effective mechanism for ensuring competitive pricing across most goods and services, including specialized fuels. It allows any qualified vendor to bid, fostering a marketplace where price and performance are key differentiators. For aviation turbine fuel, this means multiple refineries and distributors can compete, potentially driving down unit costs. However, the effectiveness can be influenced by market concentration (i.e., the number of qualified suppliers available) and the complexity of the supply chain. If the market is dominated by a few large players, even full and open competition might yield less aggressive pricing than in a highly fragmented market.

What are the implications of the short contract duration (23 days) for the DoD's long-term fuel strategy?

The short duration of this specific delivery order (23 days) suggests it is intended to fulfill immediate or near-term fuel needs rather than serve as a long-term strategic supply agreement. This implies that the DoD likely relies on a series of such short-term awards or a broader indefinite-delivery/indefinite-quantity (IDIQ) contract to ensure continuous fuel availability. From a strategic perspective, this approach allows for flexibility in adapting to changing market conditions and supplier performance. However, it may also necessitate more frequent procurement actions and potentially less predictable long-term cost management compared to longer-duration contracts.

What is the significance of the contract being awarded in Ohio (st: OH, sn: OHIO)?

The indication that the contract is associated with Ohio (st: OH, sn: OHIO) likely signifies the location of the delivery point, a major distribution hub, or the primary operational base for fulfilling this specific award. For the DoD, this geographic focus can be important for logistical planning, ensuring fuel is available where and when needed for military installations or operations within or near that region. It may also reflect the location of Marathon Petroleum Company LP's relevant facilities. Understanding the geographic scope helps in assessing supply chain resilience and potential transportation costs associated with the fuel delivery.

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: 539 S MAIN ST, FINDLAY, OH, 45840

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $9,406,114

Exercised Options: $9,406,114

Current Obligation: $9,406,114

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60225D0480

IDV Type: IDC

Timeline