Valero awarded $157M fuel contract for Israel

By James LaPorta  |  Oct. 16, 2017 at 4:32 PM
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Oct. 16 (UPI) -- In a new deal struck between the Defense Logistics Agency and Valero Marketing and Supply Co., Pentagon officials announced Friday the allocation of $157 million to the Texas-based company in search of various types of fuel.

The contract is designed to be a fixed-price in terms of base cost, but the deal does take into account economic-price-adjustments, so the totality of the contract can be adjusted upward or downward depending on external market factors.

The contract acquisition was said to be competitive among the four defense contracting companies who submitted proposals to the Defense Department. The award is a one-year base contract with a one-year option period, plus a 30-day carryover. Work will occur in Texas, with a completion data of Sept. 30, 2017.

The work completed will solidify the partnership between the U.S. and Israel, as they are the primary customer on the contract, in addition to the Defense Department.

Since the 2009 surge into remote parts of Afghanistan, and the continued fight of U.S. and coalition forces against insurgents in the desert sands of Iraq, the U.S. Military has been pushing to develop, test and deploy renewable energy -- or shift to alternative types of fuel in order to decrease the Pentagon's dependency on fossil fuels to transport food and water, bullets, bandages and soldiers to wage war.

The U.S. Army Environmental Policy Institute concluded in a 2009 report that resupply of fuel and drinking water for troops in-theater costs lives, lamenting that for every 24 fuel convoys that set out, one soldier or civilian assigned to fuel transport was killed.

The Center for Army Lessons Learned found that, historically, those killed during fuel transport missions made up 10 to 12 percent of total Army casualties. The report asserted that life and equipment would be saved if the dependency on fossil fuels decreased. The Army's challenge, however, is to "increase the energy efficiency of weapons and support systems while maintaining combat and operational performance."

Valero Marketing and Supply Co. has worked on 461 contracts worth $9.03 billion in total obligations from the U.S. government since fiscal year 2007. Fiscal year 2016 saw profits of $210 million in contract revenue through the Pentagon, the Department of Justice and the Treasury Department.

An analysis of the company shows they are awarded far higher than average when compared to all 494,388 federal vendors, according to InsideGov, a government research and data visualization site.

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