U.S. Military Privatizes Lube Distribution


The U.S. Defense Logistics Agency last week awarded a $6.25 billion, five-year contract to Science Applications International Corp. of Fairfield, N.J., to privatize the storage, warehousing and distribution of packaged petroleum, oils and lubricants, as well as certain chemicals.

With respect to the SAIC packaged petroleum, oil and lubricants, and chemicals contract, DLA spokeswoman Lana Hampton told Lube Report, privatization means that tasks once performed by the Defense Logistics Agency will now be performed by SAIC. When a customer orders a commodity covered by the contract, SAIC will receive notice of the order. They will then obtain the goods or ship from their stock on hand. DLA will maintain oversight of the contractors actions.

The agencys customers are the U.S. Army, Navy, Air Force, Marine Corps and civilian federal agencies.

The goal of the privatization program, mandated in 2005 by the Base Realignment and Closure Commission, is to reduce infrastructure and generate savings associated with procurement, storage and transportation of the products.

Commodities that will be privatized include chemicals such as insecticides, pesticides, disinfectants and repellants, said Terri Gruber of the Defense Supply Center Richmond. It also includes POLs [petroleum, oil and lubricants] such as lubricating oils and automotive grease.

Requisitions for packaged petroleum, oil and lubricants are currently handled by a supply team in Defense Supply Center Richmonds Aviation Supplier Operations Directorate. Within 90 days of the May 2 contract signing, the government privatization team will meet with SAIC to prepare for the planning and execution of the contract. Total transition will occur over the next year, as SAIC assumes full item management and receives DLA inventory, according to DLA.

SAIC will be responsible for operational support of the contract in the areas of forecasting, storage, warehousing and distribution to customers of the packaged petroleum and lubricants.

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