Military needs efficient fuel-buying process.

• Author: Giannini, Robert M.
• Position: Viewpoint

Fuel continues to be one of the major drivers in combat operations. The increasing burden associated with the logistics of fuel supply and distribution has spawned the need for greater energy efficiency and flexibility in procuring fuels.

Typically, for operations in foreign countries, fuel represents more than half the tonnage needed to sustain military actions.

In Iraq, for example, U.S. logisticians are working to create a network that supplies a force consuming 15 million gallons of fuel a day.

Fuel procurement is the responsibility of the Defense Energy Support Center, which provides fuel and other energy products such as coal, natural gas, and electricity to government customers at more than 4,000 locations worldwide.

During fiscal year 2002, DESC purchased a total of 7.5 billion gallons, which was about 2 to 3 percent of that year's U.S. commercial consumption. Of all the fuel products procured by DESC, JP-8 and JP-5 aviation turbine fuels typically represent the largest fraction.

DESC'S contracting procedures are accepted and recognized by the petroleum refining industry. Solicitations are issued and awards are made based upon the lowest bid. The DESC bid evaluation model, which determines the lowest overall cost of product to the government, takes into account the product, additives, distribution costs, quantities offered, transportation, storage, terminal throughput constraints and minimum quantity requirements.

Fuel is purchased using four different contract mechanisms--bulk, into-plane, bunker and post-camp-station contracts. Bulk contracts account for approximately three-fourths of the fuel supplied by DESC. The fuel is transported by pipeline, barge, tank truck, railcar or a combination of these.

A major complication in the purchasing process continues to be the documents used for solicitations. Each of the services is responsible for its fuel requirements. The Army handles ground fuels; the Navy handles both shipboard and aircraft fuels, and the Air Force manages aircraft fuels.

Military specifications, regardless of fuel type, differ from commercial specifications. These differences have made it difficult for the petroleum industry to respond to particular DESC solicitations.

The inability of DESC to obtain worldwide coverage for its solicitations occasionally has created supply and distribution problems for military customers.

Military specifications are viewed by DESC as the least preferred method to procure fuels.

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