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Gas Prices Will Affect U.S. Military Operations Eventually

The U.S. military is currently involved in Iraq, Afghanistan and now what looks to be like Libya. They are also deployed in the Pacific and Europe which includes ships and aircraft on patrol. They also conduct large amounts of training in the U.S. and elsewhere. As such they are one of the biggest consumers of petroleum products (POL) in the world. This fuel is managed and provided through the Defense Logistics Agency’s (DLA) Energy Support Center (DESC) group.

As the price of oil and gasoline increases as it has over the last six months it will eventually begin to affect the ability of the U.S. to pay for and conduct its missions. DLA is able to lock in at certain prices as they award long term contracts but as these expire and new ones are issued the price effect will slowly appear. This means that more funds must be expended on fuel then originally planned and budgeted for at the beginning of the Fiscal Year. In the current budget structure where the Department is operating under Continuing Resolution and without a 2011 budget it also limits funding to 2010 levels which also may reduce the amount of money available to buy fuel.

The DLA issues hundreds of contracts each year for fuel. An example is one that was signed last week with the South Alabama Regional Airport Authority to provide fuel to support Army helicopter training at FT Rucker. This is worth about $11 million. If there end up being limits on how much funding may be spent on these types of contracts then it may affect training hours and flight time which slows the ability of the Army to produce new aviators who fill a critical need on the battlefield.

The U.S. military has also begun investing heavily in research to develop non-oil based fuel. These include the use of biofuels for aircraft power generated from plants or algae. The Air Force and Navy have both flown aircraft powered by such fuel even though there are some who feel the investment is not cost effective right now.

DoD is also investing in solar power and fuel cell technology to provide battlefield power beyond gasoline powered generators or from vehicles.

Even if in the short term it is more expensive it makes sense not only from an economic point-of-view but also logistically to try and reduce the amount of POL that is moved around via truck and aircraft.

Right now the price of oil seems to be going up due to pressures from unrest in the Middle East and North Africa. Eventually most likely sooner then later these increases will begin to affect the U.S. military. Either operational will need to be curtailed or money will have to be moved to buy POL at the cost of other programs or budget priorities.

Photo from roger4336 flicker photostream.

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Defense Department Awards Commercial Air Lift Contracts

Over the last ten years for a variety of reasons the U.S. has heavily used their strategic and tactical airlift to move men and supplies around Afghanistan and Iraq. The geography, location and threat have dictated the heavy use of both fixed and rotary wing assets to conduct this mission.

To further support these efforts commercial air lift and transportation providers have also been used. This includes traditional suppliers such as DHL, UPS (UPS) and FedEx (FDX) as well as charter flights to move troops and their equipment. These commercial providers supplement the available U.S. Air Force C-17, C-5 and C-130 transports.

To continue this kind of support in 2011 the Defense Department awarded a team of airlines a contract worth about $800 million. They also awarded a team led by UPS and JetBlue (JBLU) another contract that could be worth up to $180 million if all options are exercised a contract for international airlift services.

This almost billion dollars of services illustrates the need the U.S. military has for this kind of support. A vast amount of material and personnel is moved every day to all areas of the globe. The internal assets available to the U.S. military cannot support this and the use of commercial capabilities is required.

The support also necessitates a series of support contracts across the world including the controversial fuel contracts in Kazakhstan. When forces are globally deployed this type of support is necessary.

Photo from cliff1066 flickr photostream.

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U.S. Department of Defense to Pay for Management of Water Purification Systems

The Defense Logistics Agency (DLA) awarded a contract worth over $300 million to Aqua-Chem, Inc. as part of the H2O Water Purification Initiative (WPS). If all options on the five year contract are executed the total value will be $386 million.

Aqua-Chem of Tennessee is a world leader in the manufacture of water purification and treatment systems. These include those not only for military applications but also for ships, offshore marine applications, and the power and bio-tech industries. The U.S. Department of Defense with personnel deployed all across the globe in varied climates has great demands for water. Aqua-Chem systems supports these operations with different systems to purify or provide water.

The contract is for logistical support of existing systems by providing storage and management of parts and materials to support existing Aqua-Chem systems in use today.

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Sirit to Supply Parts for DoD RFID Labels

The U.S. Defense Logistics Agency (DLA) awarded Sirit a contract to provide inlays that will be incorporated into Radio Frequency Identification Device (RFID) labels. The contract is worth almost $3 million. Sirit is a unit of Federal Signal Technologies.

The DLA uses RFID like many industries to track shipments and packages as they move through the supply system. The DLA purchases many of the basic products used by the U.S. military in Afghanistan and Iraq. The proper tracking aids the delivery of key parts and supplies to the units that need them.

Photo from Mobile RFID flickr photostream.

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Despite Research Into Alternative Fuels Defense Department Still Buys Good Old Gas

The United States Defense Department has begun several different projects to look at alternative fuels. These include efforts to develop algae and biofuel sources such as grass and grains. These are an obvious long term investment into a time when petroleum based power may be limited. At the same time it still consumes millions of gallons of aviation, diesel and gasoline to power aircraft, vehicles and ships. Because of this it was announced yesterday that several refiners were awarded contracts to provide gasoline and aviation fuel.

Valero (VLO) won a contract worth about $255 million and Tesoro (TSO) one worth close to $45 million. AGE Refining was also given a contract worth $84 million.

The Defense Logistics Agency (DLA) often makes multiple awards such as these as they use local refiners to support different units and facilities across the U.S. Despite the efforts to find alternative sources of energy petroleum based fuel will remain the main power source for several more years to come.

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Boeing Looks To Get Into Vehicle Maintenance

Using their vast amount of experience supporting aircraft — both military and civilian — Boeing (BA) submitted a proposal to the U.S. Army to provide maintenance management and support at two depots primarily concerned with vehicle and weapon maintenance. The Industrial-Product Support Vendor (IPV) contract is worth over $190 million. The work at Anniston Army Depot in Alabama and Red River Depot in Texas is to repair, reset and recapitalize vehicles like the M1 tank, the M2 IFV and the Stryker ICV.

Boeing does not make many of these types of vehicles but at the depots the contract will provide support, forecasting and inventory management. This is all work that Boeing is experienced in with aircraft and they work with the Army already on helicopters such as the CH-47. The bid was submitted to the Defense Logistics Agency (DLA).

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Buying Some Meals Ready To Eat For The Troops

MREThe U.S. Department of Defense placed an order worth over $170 million with AmericaQual Group LLC for the standardized, packaged Meals Ready to Eat (MRE). These are used by all parts of the U.S. military and also include humanitarian ration versions. The MRE has been produced for the U.S. military for over thirty years and is considered a vast improvement over more traditional rations used by soldiers through the ages. This was an option on a contract previously awarded and is good for the next year.

The MRE is a self contained kit with an entree and other food and drinks. It includes self heating food as well. One MRE is supposed to fee one person and they come packaged in cases of twenty-four normally. With the large numbers of U.S. troops deployed to Iraq and Afghanistan over the last eight years the demand for MRE has been high. Especially with many of the soldiers deployed in smaller units at bases scattered across the two countries there normally cannot be fixed housekeeping services like kitchens, canteens or restaurants as there are on bigger U.S. bases.

http://www.flickr.com/photos/williamd/ / CC BY-SA 2.0
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Logistical Costs Burden Operations In Afghanistan

Wars are expensive there is no doubt. As part of the planning for adding troops to Afghanistan the U.S. Department of Defense was asked why it costs about a $1 billion a year for a 1,000 soldiers to operate there. One of the main expenses it turns out is fuel. To get one gallon of JP8 to a soldier or airman who needs it costs about $400 if all related costs are taken into account. This figure alone is giving Congress second thoughts.

That is because the gas is shipped to Pakistan and then trucked to Afghanistan. To get it to the various outposts and bases sometimes requires aircraft and helicopters. For a helicopter to carry a gallon of gas probably takes a few gallons of gas and at a high maintenance rate. There is also the cost of all the personnel and contractors to handle the gas and supplies.

This should not really surprise anyone. In John Ellis’ book about World War II soldiers, On The Front Lines, he estimated it took about eleven personnel to support one front line soldier in the Pacific and almost ten in the European. That counted everyone who touched a ton of supplies as it moved from the U.S. to the actual soldier. That cost alone was fairly high. Take into account the gas used to move it and the maintenance of the ships, trucks and aircraft and the costs go up even more. Afghanistan is remote and costs even more.

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Agility DGS Wins Warehousing Contract — Press Release

Agility DGS Wins Warehousing Contract

ALEXANDRIA, Va., August X, 2009 – Agility Defense & Government Services (DGS) said today that the Defense Logistics Agency (DLA) renewed its contract for warehouse and distribution services at the Defense Distribution Center, Kuwait/Southwest Asia (DDKS).

Under the one-year extension, Agility DGS, a leading global provider of supply chain solutions, will use its extensive facilities in Kuwait to provide DLA with a complete warehouse management system to support operations in the Middle East and Southwest Asia.

DLA originally awarded Agility DGS a one-year DDKS contract in 2005. Each year since, Agility DGS has won the right to handle the work. The potential value of the DDKS award is $214 million over five years.

“We are gratified to have earned the confidence of DLA based on our record of outstanding performance since 2005,” said Dan Mongeon, president and CEO of Agility DGS. “We’ve become a trusted partner because we provide advanced logistics experience, capabilities and facilities that are unsurpassed. We are uniquely suited to continue helping the DDKS provide outstanding support to the U.S. military.”

The DDKS contract extends Agility’s record of successful performance for the DLA, which includes recent awards of long-term contracts for heavy equipment and transport services in Iraq and Kuwait, along with supply and distribution of food and other products for the U.S. military in Iraq. Agility DGS also recently has won contracts to manage repair parts supplies at the Tobyhanna Army Depot in Pennsylvania and bulk-fuel supplies for the U.S. military on U.S. Air Force installations in Guam, Japan, South Korea, Portugal, Germany and Turkey.

About Agility Defense & Government Services

Agility Defense & Government Services is the public sector arm of Agility. It provides complete supply chain management, logistics services and commodity services to defense and government customers. With more than 550 offices in 120 countries, Agility DGS and its parent offer a vast network of global land, sea and air transportation capabilities, including warehousing and storage.

For more information, contact Jim Cox, Agility DGS vice president of public affairs and marketing, at +1.703.417.6050 or at [email protected], or visit www.agilitylogistics.com.

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U.S. Department of Defense Buys Gas — Lots Of It

The United States Defense Logistics Agency (DLA) announced today a sheaf of contracts to buy gas. Gas for airplanes, ships, trucks and vehicles. The U.S. military runs on it as it is very heavily mechanized and relies on its helicopters and aircraft for the kind of support many armies would say no to or use artillery for.

World Fuel Services was awarded a contract worth $104.5 million for aviation fuel to support all of the services and Valero also received one worth up to $230 million.

These contracts are good for a year. One of the increasing costs the Department of Defense is facing is the price of oil. As it has gone up and down over the last five years it has forced the Defense Department to adjust its O&M budget. The heavy demand of operations also means that money may have to be moved from procurement accounts to cover these costs. Ideally for good budgeting it would be hoped that the price would stabilize over the year so proper planning can be made.

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Taos Industries Awarded $8.5M DRMS Contract Task Orders — Press Release

Taos Industries Awarded $8.5M DRMS Contract Task Orders

HUNTSVILLE, Ala., July 23 ­­– Taos Industries, a subsidiary of Agility Defense & Government Services (DGS), won two task orders worth $8.5 million for the operation of six Defense Reutilization and Marketing Offices (DRMOs) in Kuwait, Iraq and Afghanistan.

The task orders were awarded by the Defense Reutilization and Marketing Service (DRMS), a unit of the Defense Logistics Agency based in Battle Creek, Mich.

Taos Industries currently operates the world’s largest DRMO at Camp Arifjan in Kuwait. It also operates four DRMO sites in Iraq and one in Afghanistan.

Using state-of-the-art technology, the Taos DRMS team demilitarizes and disposes of excess and unserviceable military property, with the exceptions of ordnance and HAZMAT, for U.S. military and allied forces.

Under a $5.2 million DRMS task order, Taos Industries will provide continued operations and life support at the six DRMO locations. Under a second DRMS task order worth $3.3 million, Taos Industries will provide additional operational labor and materials at the Afghanistan site and four Iraq DRMO locations to meet a surge of material at each location. Each award covers a one-year base period.

“Taos brings unique capabilities to the Department of Defense property disposal mission. The company has a proven track record of moving people and materiel safely,” said Joseph M. Cosumano Jr., president and CEO of Taos Industries. ““These awards signify the great working relationship that Agility and Taos Industries have developed with DRMS.”

About Taos Industries Inc.

Taos Industries, based in Huntsville, Ala., is a subsidiary of Agility Defense & Government Services. Taos provides logistics and commodity services, specialized procurement, and household relocation services to the U.S. Department of Defense, Department of State, NATO and other government and defense customers. Taos offers base operations support, and defense reutilization and marketing services, as well as contingency operations and natural disaster support. Taos Industries has been supplying the U.S. government and its allies since 1991. For more information about Taos Industries, contact Hobie Frady at 256.772.7743 or visit www.taos-inc.com.

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Agility Awarded $1.4 billion Option Year on Contract to Feed U.S. Forces in Iraq — Press Release

Agility Awarded $1.4 billion Option Year on Contract to Feed U.S. Forces in Iraq

Defense Logistics Agency extends Agility to December 2010

ALEXANDRIA, Va., June 9, 2009 – Agility Defense & Government Services (DGS) announced that the U.S. Defense Logistics Agency (DLA) has exercised the third option period on its contract for the supply and distribution of food and non-food products to U.S. forces in Iraq.

The contract, known as the Subsistence Prime Vendor contract, requires Agility DGS to handle procurement, shipping, warehousing and distribution of food and non-food products for all branches of the U.S. military. The maximum value of the 18-month extension is $1.4 billion.

“We welcome news of the extension. It’s another indication that we’ve been able to maintain exceptional performance under the most challenging conditions,” said Dan Mongeon, president and CEO of Agility DGS. “We’ve delivered with accuracy, efficiency and dependability, ensuring that U.S. troops eat properly as they perform their mission.”

Agility DGS originally won the Subsistence Prime Vendor contract in Dec. 2005. The extension covers the third and final option year. The company’s performance on the competitively bid contract has earned it recognition and awards from DLA and other agencies.

“Through advanced logistics and extensive quality assurance measures, we’ve been extremely successful in delivering food and other items into a warzone,” Mongeon said.

About Agility Defense & Government Services

Agility Defense & Government Services is the public sector arm of Agility. It provides complete supply chain management, logistics services and commodity services to meet the needs of defense and government customers. With more than 550 offices in 120 countries, Agility DGS and its parent offer a vast network of global land, sea and air transportation capabilities, including warehousing and storage.

For more information, contact Jim Cox, Agility DGS vice president of public affairs and marketing, at 703 417-6050 or at [email protected], or visit www.agilitylogistics.com.

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Contracts Continue for BearingPoint

Despite its recent bankruptcy filing BearingPoint continues to win contracts providing technical and management support to the U.S. Department of Defense. WashingtonTechnology.com writes that the Defense Logistics Agency (DLA) just gave them a small contract to provide acquisition management and support. The contract is worth about $3.5 million. BearingPoint has supported DLA in this area since 2002. DLA has been satisfied with the work that BearingPoint has done.

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U.S. Army Buys More Packs from BAE

BAE was awarded a contract to provide more MOLLE gear for the U.S. Army. The Modular Lightweight Load Carrying Equipment is a configurable system of different packs, pockets and so on that is the primary gear carrying system for the Army. MarketWatch.com has the press release. This $40 million contract is an option under a long term one worth up to $370 million if all options are exercised. BAE produces the components in a variety of U.S. locations.

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ID Cards are Big Business

The US Department of Defense has over the last few years switched to a universal identification card, The Common Access Card (CAC) Card (sic). As its name implies it is common across DoD being used by the Services, for civilians and contractors. Most military bases require a CAC Card for access. MarketWatch.com reports that Telos Corporation has been awarded a $160 M contract to provide the consumables used to make the cards and track the government inventory of them. Read more

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Does the Punishment Fit the Crime? Former DoD Worker Sentenced for Fraud

A Defense Logistics Agency (DLA) worker, Constance Walton, was sentenced to two years probation and a $10 K fine. Ms. Walton directed contracts be given to companies that she either had a financial role in or owned outright. She also failed to report income from these ventures. MarketWatch.com has the press release from the US Department of Justice on her case. To top it off the companies she directed work to never did any and were still paid. Read more

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DoD awards RFID contract

The Defense Logistics Agency (DLA) for the DoD awarded an omnibus RFID contract to a team led by CDO. If all options are exercised the contract is worth over $75 M. The team of companies will provide Radio Frequency Identification Devices (RFID) for any US service or agency that would like to buy them through DLA. RFID is used mainly to track stores and equipment as they are moved from depot to the needed unit.

For more see the Dayton Daily News. An example as to how all defense contracts are local it is referred to as a “huge contract” by the paper.

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DoD buys vehicle parts management system

Lockheed Martin was awarded yesterday a potential 10 year contract worth over $5 B to set up and manage a system to provide auto parts to the various services. The system will be able to provide, track and ship necessary vehicle parts all over the world to the Army, Air Force, Navy and Marines. The system will utilize a proprietary software system that Lockheed Martin developed and is currently being used to support aircraft. Despite the size of the award the contract will employ only about thirty personnel.

See the Philadelphia Business Journal for more details.

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US buys batteries

The Defense Logistics Agency (DLA) signed a contract with SAFT for batteries. See the press release here. While SAFT is a French company the batteries will be made in NC at their plant. The contract is for up to 5 years and could be worth $170 M. With the amount of electronics proliferating on the battlefield, battery technology is very important as the US and other countries strive for lighter batteries that provide more power.

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DRS Technologies wins sub-contract from Booz Allen Hamilton to inspect DoD fuel sites

DRS Technologies was hired as a sub-contractor by Booz Allen Hamilton to conduct inspections of DoD fixed fuel sites world wide. See a UPI article for more details. BAH had been given a logistics support contract by the Defense Logistics Agency recently. DRS technologies currently supports DoD fuel system in the US.

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Defense Logistics Agency awards ID/IQ contract for facility support

December 31, 2007 by · Comment
Filed under: Contract Awards, DLA, logistics 

The DLA qualified on 28 December 18 teams to participate in an Indefinite Delivery/Indefinite Quantity (ID/IQ) contract to provide facility support across the United States. What this means is that the contract will award a group of hours of work to one of the teams. There is no total of hours to be awarded (IQ) and no time limit on when they can be awarded during the life of the contract (IQ). There is no guarantee that any of the companies will be given work, or that any work will be given at all. Some how this will save the government money. See Defenselink.mil for more.

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