Keywords: US Navy, biofuel blends, DLA, bulk
fuels, fuel procurement
The Defense Logistics Agency (DLA), in conjunction with the US
Navy, has issued a solicitation for bulk fuels for DLA
Energy's customers located in the Inland/East/Gulf Coast
regions of the United States. The Inland/East/Gulf Coast is the
single largest bulk fuels acquisition program, and it is valued in
excess of $3.5 billion.
Significantly, as part of the regular bulk fuel procurement for
Inland/East/Gulf, the solicitation is designed to assist the
Department of the Navy in meeting its goals to increase the use of
biofuels. Under the joint "Farm to Fleet" program of the US
Department of Agriculture and Navy, the Navy has a goal that 10
percent of its total military specification of JP-5 aviation
turbine fuel and F-76 naval distillate fuel requirements consist of
In a statement issued on June 10, 2014, the Navy
indicated that at least 37 million gallons of "drop-in"
biofuels are being sought in the solicitation. These biofuels can
be blended in a range of 10 to 50 percent with conventional
petroleum products and must meet all military fuel specification
properties that make handling requirements and performance
indiscernible to the end user. The Navy stated that DLA will
purchase the biofuel blends only if they are cost competitive with
their conventionally derived counterparts. The Navy also added that
"[e]xpanding military energy sources improves the reliability
of our overall fuel supply, adds resilience against supply
disruptions, and gives the military more fuel options to maintain
its readiness and defend the national security interests of the
According to the Navy, $27.2 million in Commodity Credit Corp.
(CCC) funds are available to defray any additional costs that may
exist for fuels derived from domestic feedstocks on a US Department
of Agriculture-approved list. The CCC funding is capped at 71 cents
per neat gallon of biofuel.
Fuel offered under the solicitation must also comply with
Section 526 of the Energy Security and Independence Act, which
requires that the lifecycle gas emissions of the alternative fuel
must be equal to or less than petroleum-based fuel based on either
the renewable fuel standard (RFS) or GREET Model.
The solicitation anticipates award of an Indefinite
Delivery/Indefinite Quantity Type, Fixed-Price with Economic Price
Adjustment contract. The total estimated quantities are for JP-8
(376,000 USG), JP-5 (254,612,000 USG), JAA (925,544,000 USG), and
F-76 (137,886,000 USG). The procurement is 44.94 percent set-aside
for small business. Offers are due July 9, 2014, 3:00 pm EST.
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On October 2, 2014, the U.S. Attorney for the Northern District of Illinois announced the indictment of Michael Coscia, the owner of Panther Energy Trading ("Panther"), for six counts of commodities fraud and six counts of spoofing.