After a brief intermission from awarding defense contracts Tuesday, the Department of Defense got back to the business of awarding work to America's defense contractors Wednesday -- with a vengeance. Over the course of 22 separate defense contract announcements Wednesday, the Pentagon awarded well more than $5.18 billion in new work.
Most of the day's biggest contracts -- $5.04 billion of the total -- were issued to secure supplies of aviation turbine fuel for the military. These contracts went to oil companies such as ExxonMobil (XOM +2.96%), Royal Dutch Shell (NYSE: RDS-A), and Valero (VLO +2.12%). In fact, these were the three largest awards granted on the day, amounting to 65% of the value of fuel orders placed, and 63% of the value of all defense contracts awarded for the day.
Valero won a fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract to supply the U.S. Defense Logistics Agency with up to $769.7 million worth of aviation turbine fuel through April 30, 2015.
ExxonMobil won a similar fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract to supply the DLA with up to $872.6 million worth of aviation turbine fuel, also through April 30, 2015.
And Shell made out best of all. Its Equilon Enterprises LLC sub-subsidiary was awarded a pair of DLA supply contracts. Each is -- you guessed it -- " fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity." Each runs through April 30, 2015. The only real differences between them are that the larger award is for $1.359 billion and calls for deliveries to be made to DLA locations in Texas, while the other award is for "only" $281.8 million and anticipates deliveries in both Texas and Alabama.
