DoD's $9.9M Aviation Turbine Fuel Contract Awarded to PAR HAWAII REFINING LLC
Contract Overview
Contract Amount: $9,930,929 ($9.9M)
Contractor: PAR Hawaii Refining LLC
Awarding Agency: Department of Defense
Start Date: 2026-01-12
End Date: 2026-02-10
Contract Duration: 29 days
Daily Burn Rate: $342.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: 8511856322!TURBINE FUEL,AVIATION
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77024
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $9.9 million to PAR HAWAII REFINING LLC for work described as: 8511856322!TURBINE FUEL,AVIATION Key points: 1. Significant contract for aviation fuel, highlighting critical defense logistics. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. Fixed price with economic price adjustment introduces some cost volatility risk. 4. The sector is dominated by large refineries, with limited small business participation. 5. Awarded by DLA, a key agency for supply chain management.
Value Assessment
Rating: good
The contract value of $9.9M for a 29-day delivery period appears reasonable given the nature of aviation fuel and current market conditions. Benchmarking against similar fuel contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing. The fixed-price with economic price adjustment structure allows for market fluctuations, potentially impacting the final cost to the government.
Taxpayer Impact: Full and open competition is generally beneficial for taxpayers, driving efficiency and potentially lower prices. However, the economic price adjustment clause introduces a risk of increased costs if fuel prices rise significantly.
Public Impact
Ensures continued supply of critical aviation fuel for Department of Defense operations. Supports national security by maintaining readiness of air assets. Impacts the aviation fuel market through a significant government purchase. Potential for price fluctuations due to economic price adjustment clause.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment may lead to cost overruns if fuel prices surge.
- Short contract duration (29 days) may limit long-term price stability.
- Limited small business participation in this sector.
Positive Signals
- Awarded under full and open competition.
- Ensures critical fuel supply for defense operations.
- Experienced contractor with established refining capabilities.
Sector Analysis
The petroleum refining sector is capital-intensive and subject to global commodity price fluctuations. Defense Logistics Agency contracts for fuel are essential for maintaining military readiness and operational capabilities.
Small Business Impact
The petroleum refining industry is highly concentrated with large players. This contract, awarded to PAR HAWAII REFINING LLC, does not appear to involve small business participation, which is typical for this sector.
Oversight & Accountability
The Defense Logistics Agency is responsible for managing the supply chain for the U.S. military. Oversight would focus on contract performance, delivery timeliness, and adherence to the economic price adjustment terms.
Related Government Programs
- Petroleum Refineries
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost increases due to economic price adjustment.
- Short contract duration may not leverage long-term price stability.
- Limited visibility into specific price adjustment mechanisms.
- Concentrated industry with potential for limited competition in future awards.
Tags
petroleum-refineries, department-of-defense, tx, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $9.9 million to PAR HAWAII REFINING LLC. 8511856322!TURBINE FUEL,AVIATION
Who is the contractor on this award?
The obligated recipient is PAR HAWAII REFINING LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $9.9 million.
What is the period of performance?
Start: 2026-01-12. End: 2026-02-10.
What is the historical price trend for aviation turbine fuel over the contract period, and how might this impact the economic price adjustment?
Analyzing historical price data for aviation turbine fuel is crucial. If prices have been volatile or trending upwards, the economic price adjustment clause could significantly increase the final contract cost beyond initial projections. Conversely, stable or declining prices would benefit the government. A thorough review of market forecasts is recommended to assess potential taxpayer impact.
What are the specific triggers and limits for the economic price adjustment in this contract, and how are they monitored?
The contract details the specific indices or benchmarks used to calculate adjustments to the fixed price. Understanding these triggers (e.g., changes in West Texas Intermediate crude prices) and any caps or floors on the adjustment is vital. The Defense Contract Management Agency (DCMA) would typically monitor these adjustments to ensure they align with the contract terms and market realities, safeguarding taxpayer funds.
How does the awarded price compare to benchmark prices for similar aviation turbine fuel contracts awarded by other government agencies or in the commercial sector?
Comparing the awarded price to benchmarks provides insight into its competitiveness. If the price is significantly higher than comparable contracts, it may indicate suboptimal price discovery or market conditions. Conversely, a price in line with or below benchmarks suggests effective competition and negotiation. This comparison is essential for assessing value for taxpayer money.
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
Parent Company: PAR Pacific Holdings, Inc.
Address: 825 TOWN AND COUNTRY LN STE 1500, HOUSTON, TX, 77024
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $9,930,929
Exercised Options: $9,930,929
Current Obligation: $9,930,929
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE60225D0486
IDV Type: IDC
Timeline
Start Date: 2026-01-12
Current End Date: 2026-02-10
Potential End Date: 2026-02-10 00:00:00
Last Modified: 2026-02-26
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