ARTICLE

September 2004

Military Needs Efficient Fuel-Buying Process

by Robert M. Giannini and Maurice E. Le Pera

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.

Military-unique needs include increased storage stability, additives, a wider operating temperature range and improved survivability from fires. These requirements are driven by the weapons and support systems that consume the fuel, the geographical areas where these systems are deployed and the intended operational use for these systems.

There is some similarity between certain military and commercial specifications, as is the case with aviation kerosene turbine fuel. But other items, such as the Navy’s distillate fuel—the primary fuel for all Navy shipboard operations—have no identifiable commercial equivalent.

To the extent possible, the military would like to use commercial rather than military specifications, but only when this does not compromise military operations.

The military services could benefit by working with the commercial standards-setting organizations to incorporate military requirements into commercial specifications.

Commercial standards are set by the American Society for Testing and Materials. The processes for developing ASTM fuel specifications and military specifications are different. After a military agency generates a draft specification document, it is circulated to the other services and industry for review and comment. In cases of dispute, DESC resolves the matter in coordination with the military services.

The ASTM consensus process is different. Proposed changes only are approved during semiannual meetings of ASTM Committee D2 on Petroleum and Related Products and through balloting of the entire ASTM D2 membership. The ASTM D2 membership includes all the organizations represented in the commercial and military/governmental community—equipment manufacturers, petroleum product suppliers, purchasers, end users and regulators.

The Navy uses a middle distillate fuel for shipboard boilers, gas turbines, and medium- and high-speed diesel engines. This fuel is provided through bulk contracts by DESC. But there were times when the Navy was unable to obtain the fuel it required in certain parts of the world.

This led to the development of the Navy’s marine gas oil purchase description in 1996. DESC purchases fuel through local bunker supplier contracts worldwide. Currently, marine gas oil accounts for approximately 4 percent of the Navy’s total fuel requirements. But the marine gas oil purchase description does not contain the Navy’s essential storage stability requirement. Thus, one problem is that once on board, the fuel only has a six-week use limit.

Against this backdrop, the Navy decided to develop an ASTM commercial fuel specification that would replace the marine gas oil purchase description. Sufficient research work had been done in the past to identify the requirements needed for this draft ASTM specification. The Coast Guard and DESC supported the Navy in this effort. Through numerous meetings with ASTM—negotiating on fuel properties and property limits, responding to questions and comments and resolving the negative ballots that evolved—an agreement was finally reached on a new commercial specification.

The process for initiating a new product specification through ASTM may require more time than military specification procedures. It also may require greater financial investment.

The joint Navy-ASTM effort to incorporate military requirements into a commercial specification resulted in the recent approval and issuance of ASTM D 6985 “standard specification for middle distillate fuel oil - military marine applications.”

As an example of a military requirement, ASTM D 6985 incorporates a storage stability requirement, which will enable the Navy to replace its current marine gas oil purchase description with a storage-stable commercial fuel. By definition, any fuel taken onboard, whether military or commercial, will be stable.

The Navy spent five years and more than $3 million developing the required data just to show the problems with the property requirements in existing commercial marine fuel specifications for high-speed diesel engines. Much of the background data was drawn from the Navy’s efforts in evaluating fuel and engine requirements, which spanned 15 years and cost approximately $15 million.

DESC has the ability to use this recently approved commercial specification, which certainly demonstrates a significant improvement in the global procurement process for Navy fuels.

Robert M. Giannini works at the Naval Air Systems Command and Maurice E. Le Pera is president of Le Pera and Associates. Edwin C. Owens of Southwest Research Institute, and Dennis Hardy, of the Naval Research Laboratory also contributed to this article.

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