e. Coal Contracts. DESC purchases 1 million tons of coal annually for about 50 military installations in
CONUS, Alaska, and Europe. All contracts are administered by DESC, except for the European contact which is
administered by the Army. Contractors bill the customers directly for all orders placed. Coal contracts are for
one to two years, except for Alaska which is for five years. Coal contracts have price increase provisions for
wages, transportation, and land reclamation expenditures.
f. Bulk Lubes Contracts. These are indefinite quantity contacts and direct delivery to about 21 activities
in the CONUS, Hawaii, Guam, and Japan. DESC administers all contracts except for the ground vehicle
lubricating oils. For these, the DERs order the requirements for their customers using DESC funds. The
customers are then billed at a later date.
g. Natural Gas Contracts. These contracts direct delivery of natural gas to posts, camps, and stations as
well as to various civilian activities. Gas is normally purchased and delivered via interstate pipelines to the local
distribution companies boundary. Pipeline service is usually purchased as a-part of the contract. The customer
contracts separately with the local company for gas transportation from boundary to the military base.
h. Storage Contracts. These contracts cover the receipt, storage, and shipment of government-owned
fuel in the CONUS including 16 COCO facilities. Outside the continental United States, the storage contracts
include 18 COCOs and 9 GOCO facilities. Contracts are fixed price and last three to five years.
i. Overseas Service Contracts. DESC also awards and administers six COCO lab testing contracts, one
transportation contract, one naval mooring service, and one GOCO lab in Korea.
j. Credit Card Contracts. These contacts are used to purchase gasoline and lubricants for automobiles,
aviation gasoline, and jet fuel. These contracts operate on a five-year cycle. Base contracts are for one year with
four one-year options.
k. Strategic Petroleum Reserve. In 1989, DESC reassumed procurement responsibility for the nation's
SPR. The SPR is used to store crude oil as a buffer against potential national emergencies. The total reserve is 1
billion barrels. DESC purchases the crude oil for the Department of Energy, which stewards the reserve.
8.
Contract Administration and Responsibilities.
DESC uses the DFAMS to control the flow of petroleum products from procurement through storage and
transportation to final sale to the customer. DFAMS provides information on the status of DESC contracts, funds,
inventories at Defense Fuel Support Points, contractor payments, and customer billing.
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