DoD's $3.36M aviation turbine fuel contract awarded to Placid Refining Company LLC

Contract Overview

Contract Amount: $3,367,258 ($3.4M)

Contractor: Placid Refining Company LLC

Awarding Agency: Department of Defense

Start Date: 2026-01-02

End Date: 2026-01-15

Contract Duration: 13 days

Daily Burn Rate: $259.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: 8511839770!TURBINE FUEL,AVIATION

Place of Performance

Location: PORT ALLEN, WEST BATON ROUGE County, LOUISIANA, 70767

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $3.4 million to PLACID REFINING COMPANY LLC for work described as: 8511839770!TURBINE FUEL,AVIATION Key points: 1. Value for money appears reasonable given the fixed-price with economic price adjustment structure. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with contract duration and fixed-price structure presenting some exposure. 4. Performance context is limited to a short delivery period, suggesting a tactical or immediate need. 5. Sector positioning places this within the broader energy and defense logistics supply chain.

Value Assessment

Rating: good

The awarded amount of $3.36 million for aviation turbine fuel over a 13-day period appears within a reasonable range for such a specialized commodity. The fixed-price with economic price adjustment (FP-EPA) contract type allows for some flexibility in market fluctuations, which is appropriate for fuel. Benchmarking against similar fuel procurements would provide a more precise value assessment, but the initial data suggests a fair price given the short delivery window and market volatility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive environment. This approach generally leads to better price discovery and ensures that the government receives offers from a wide range of qualified suppliers.

Taxpayer Impact: A full and open competition process maximizes the potential for cost savings for taxpayers by encouraging multiple companies to bid, driving down prices through market forces.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units requiring aviation turbine fuel. The service delivered is the supply of critical aviation fuel. The geographic impact is localized to Louisiana, where the contractor is based and likely delivery will occur. Workforce implications are primarily within the energy sector, supporting refinery operations and fuel logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment introduces potential for cost overruns if fuel prices spike unexpectedly.
Short contract duration may indicate a reactive procurement, potentially missing opportunities for longer-term, more cost-effective agreements.
Reliance on a single supplier for this specific delivery order, even if competed, carries inherent supply chain risk.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Fixed-price element provides some cost certainty for the base price of the fuel.
Contractor is based in Louisiana, potentially leveraging regional supply chains.

Sector Analysis

This contract falls within the energy sector, specifically the refining and distribution of petroleum products. The market for aviation turbine fuel is influenced by global oil prices, geopolitical stability, and refining capacity. The Defense Logistics Agency (DLA) is a major procurer of fuel for military operations, and contracts like this are essential for maintaining readiness. Comparable spending benchmarks would involve analyzing other DLA fuel contracts and broader government fuel procurement trends.

Small Business Impact

The data indicates that this contract was not 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 contractor, Placid Refining Company LLC, is likely a larger entity given the contract value and industry.

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 are embedded in the contract terms, including delivery specifications and pricing adjustments. 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 Logistics Agency Fuel Procurement
Aviation Fuel Supply Contracts
Petroleum Product Procurement
Fixed Price with Economic Price Adjustment Contracts

Risk Flags

Potential for price volatility due to economic price adjustment.
Short contract duration may limit long-term cost optimization.
Geographic concentration of supplier could pose supply chain risk during regional disruptions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.4 million to PLACID REFINING COMPANY LLC. 8511839770!TURBINE FUEL,AVIATION

Who is the contractor on this award?

The obligated recipient is PLACID REFINING COMPANY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.4 million.

What is the period of performance?

Start: 2026-01-02. End: 2026-01-15.

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

The Defense Logistics Agency (DLA) is a significant procurer of aviation turbine fuel, with annual spending often reaching billions of dollars. Historical data reveals consistent demand driven by global military operations and training exercises. Spending patterns fluctuate based on geopolitical events, fuel market volatility, and strategic inventory management. For instance, periods of increased operational tempo or supply chain disruptions can lead to higher procurement volumes and prices. The DLA utilizes various contract types, including fixed-price and cost-plus, often with economic price adjustments to mitigate market risks. Analyzing trends over the past 5-10 years would show the scale of DLA's fuel requirements and its adaptation to market conditions, highlighting the importance of contracts like the one awarded to Placid Refining Company LLC in maintaining national security.

How does the pricing structure (Fixed Price with Economic Price Adjustment) compare to other fuel contracts?

The Fixed Price with Economic Price Adjustment (FP-EPA) contract structure is commonly used for commodities like fuel where market prices are volatile. It offers a balance between cost certainty for the government and protection for the contractor against significant price fluctuations. The fixed price component establishes a base cost, while the economic price adjustment clause allows for modifications based on a pre-defined index or formula tied to market prices (e.g., West Texas Intermediate crude oil). This contrasts with pure Fixed Price (FP) contracts, which offer maximum price certainty but expose the contractor to greater risk in volatile markets, potentially leading to higher initial bids. Cost-Plus (CP) contracts, on the other hand, reimburse the contractor for allowable costs plus a fee, offering less price certainty for the government but ensuring the contractor covers all expenses. FP-EPA is often preferred for fuel procurements by agencies like the DLA because it provides a reasonable degree of cost control while acknowledging the inherent unpredictability of the energy market.

What are the potential risks associated with a short-duration fuel delivery order?

Short-duration fuel delivery orders, like the 13-day period for this contract, often indicate an immediate or tactical need rather than a long-term strategic requirement. Potential risks include a higher per-unit cost compared to longer-term contracts, as suppliers may factor in expedited logistics or less favorable economies of scale. There's also a risk of supply chain disruption if unforeseen events impact the limited delivery window, potentially affecting operational readiness. Furthermore, frequent short-duration procurements can indicate a lack of proactive planning or an inability to secure longer-term agreements, which might stem from market uncertainty or contractor reluctance. While full and open competition mitigates some pricing risks, the inherent inflexibility of a short timeframe can limit the government's ability to negotiate more favorable terms or secure supply during peak demand periods.

What is Placid Refining Company LLC's track record with government contracts?

Placid Refining Company LLC has a history of receiving government contracts, primarily related to fuel supply. While specific details on the volume and nature of all past contracts require deeper database analysis, their involvement suggests a capacity to meet federal procurement requirements. Examining past performance ratings, on-time delivery records, and any disputes or contract terminations would provide a more comprehensive view of their reliability. As a refiner, their core business aligns with supplying petroleum products, making them a logical choice for fuel-related solicitations. Understanding their experience with similar FP-EPA contracts and their performance under competitive bidding processes is crucial for assessing their suitability and the value they bring to government acquisitions.

How does the geographic location of the contractor (Louisiana) impact this contract?

The contractor's location in Louisiana is significant for this aviation turbine fuel contract. Louisiana is a major hub for the oil and gas industry, with substantial refining capacity and access to key transportation infrastructure, including ports and pipelines. This proximity likely facilitates efficient sourcing of crude oil and refined products, potentially reducing transportation costs and lead times for delivery. For the Defense Logistics Agency (DLA), awarding contracts to companies in strategic refining regions like the Gulf Coast can enhance supply chain resilience and responsiveness. It allows for leveraging existing infrastructure and potentially tapping into regional fuel markets that may offer competitive pricing due to local supply dynamics. However, it also concentrates risk in a region prone to weather-related disruptions (e.g., hurricanes), which could impact supply continuity.

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: 1940 LA HWY 1 N, PORT ALLEN, LA, 70767

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,367,258

Exercised Options: $3,367,258

Current Obligation: $3,367,258

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60225D0472

IDV Type: IDC

Timeline