DoD's Defense Logistics Agency awards $18.6M for Aviation Turbine Fuel, highlighting fixed-price with economic adjustment

Contract Overview

Contract Amount: $18,652,862 ($18.7M)

Contractor: South National for Logistics LLC

Awarding Agency: Department of Defense

Start Date: 2025-06-23

End Date: 2025-07-01

Contract Duration: 8 days

Daily Burn Rate: $2.3M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: 8511460039!TURBINE FUEL,AVIATION

Plain-Language Summary

Department of Defense obligated $18.7 million to SOUTH NATIONAL FOR LOGISTICS LLC for work described as: 8511460039!TURBINE FUEL,AVIATION Key points: 1. Significant award for aviation fuel, a critical component for military operations. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces price volatility risk. 4. The sector is Petroleum Refineries, with a NAICS code of 324110.

Value Assessment

Rating: good

The award amount of $18.6M for a short duration (8 days) appears substantial. Benchmarking against similar aviation fuel contracts would be necessary for a precise valuation, but the full and open competition suggests an effort to achieve fair market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders were considered. This method generally promotes competitive pricing and ensures the government receives the best value.

Taxpayer Impact: The competitive nature of the award is positive for taxpayers, as it likely led to more favorable pricing than a sole-source or limited competition scenario.

Public Impact

Ensures continued operational readiness for military aircraft. Potential for price fluctuations due to economic price adjustment clause. Supports the petroleum refining industry and associated supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment introduces potential for cost overruns.
Short contract duration may indicate urgent need or limited scope.

Positive Signals

Full and open competition utilized.
Awarded to a single entity, potentially simplifying logistics.

Sector Analysis

The petroleum refining sector is essential for national defense, providing critical fuels for military operations. Spending in this sector can fluctuate based on global oil prices and geopolitical events. This award falls within the typical range for bulk fuel procurement.

Small Business Impact

The data indicates the award was not set aside for small businesses, and the contractor, SOUTH NATIONAL FOR LOGISTICS LLC, is not explicitly identified as an SMB. Further investigation would be needed to confirm if small businesses were involved as subcontractors.

Oversight & Accountability

The award was a delivery order under a larger contract, suggesting existing oversight mechanisms are in place. The Defense Logistics Agency's role implies established procurement and oversight processes for fuel acquisition.

Related Government Programs

Petroleum Refineries
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Economic Price Adjustment (EPA) clause introduces cost uncertainty.
Short contract duration may indicate potential logistical challenges or urgent need.
Contractor's small business status is not specified, potentially limiting SMB participation.
Lack of detailed performance metrics in the provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to SOUTH NATIONAL FOR LOGISTICS LLC. 8511460039!TURBINE FUEL,AVIATION

Who is the contractor on this award?

The obligated recipient is SOUTH NATIONAL FOR LOGISTICS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2025-06-23. End: 2025-07-01.

What is the historical price trend for aviation turbine fuel under similar FPEPA contracts awarded by the DLA?

Analyzing historical price trends for aviation turbine fuel under similar FPEPA contracts awarded by the DLA is crucial. This would involve examining past economic price adjustments to understand the volatility and potential impact on the total contract value beyond the initial $18.6M. It helps assess if the current pricing structure adequately protects against excessive cost increases while allowing for market fluctuations.

What are the specific risks associated with the economic price adjustment clause in this contract?

The primary risk associated with the economic price adjustment clause is potential cost escalation beyond initial projections, impacting the overall budget. This clause ties the fuel price to market indices, which can be volatile due to global supply, demand, and geopolitical factors. Without clear caps or defined adjustment mechanisms, the government could face significantly higher costs than anticipated, affecting fiscal planning and resource allocation.

How does the short delivery period (8 days) impact the overall effectiveness and cost of this fuel acquisition?

The short delivery period of 8 days suggests an urgent operational need or a specific, time-sensitive requirement. While potentially increasing logistical complexity and possibly unit cost due to expedited delivery, it ensures immediate availability of critical fuel. The effectiveness hinges on meeting the operational demand within this tight timeframe. The cost-effectiveness would depend on whether this urgency justified any premium paid over a longer delivery schedule.

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: ELLIA ABU MADI ST SHEMESANI, AMMAN

Business Categories: Category Business, Foreign Owned, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $18,652,862

Exercised Options: $18,652,862

Current Obligation: $18,652,862

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60522D9507

IDV Type: IDC

Timeline