{"id":64305,"date":"2023-01-30T15:00:00","date_gmt":"2023-01-30T15:00:00","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2023\/01\/30\/snagged-military-fuel-card-contract-triggers-lawmaker-scrutiny\/"},"modified":"2026-08-08T00:47:45","modified_gmt":"2026-08-08T00:47:45","slug":"snagged-military-fuel-card-contract-triggers-lawmaker-scrutiny","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/pentagon\/2023\/01\/30\/snagged-military-fuel-card-contract-triggers-lawmaker-scrutiny\/","title":{"rendered":"Snagged military fuel card contract triggers lawmaker scrutiny"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2015 The Pentagon is taking another stab at opening competition for the AIR Card program, a government credit card widely used to pay for a huge military expense \u2015 <a href=\"https:\/\/www.defensenews.com\/pentagon\/2022\/04\/27\/pentagons-fuel-prices-rose-3b-amid-inflationary-pressures\/\" target=\"_blank\">fuel<\/a>, but the effort is facing skepticism from a key lawmaker.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the contract, troops use the Aviation Into-Plane Reimbursement (AIR) cards and Ship Bunkers Easy Acquisition Card (SEA) cards to keep U.S. military aircraft around the globe fueled up and ready to go. The contract holder processes the transactions and profits almost entirely from transaction fees it charges the government\u2019s network of commercial fuel suppliers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But in a December letter to the Defense Logistics Agency, Rep. <a href=\"https:\/\/www.defensenews.com\/battlefield-tech\/space\/2022\/12\/09\/defense-bill-underlines-need-for-tactically-responsive-space-program\/\" target=\"_blank\">Michael Waltz<\/a>, R-Fla., raised alarms about DLA\u2019s award of the contract last June to Miami-based Associated Energy Group, instead of longtime incumbent Kropp Holdings Inc., of Overland Park, Kansas. After KHI protested the decision, DLA scrapped the award and opted to reopen the competition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">KHI alleged in its protest that, because AEG is a fuel supplier, allowing it to manage the service would be unfair to other suppliers and spur them to exit the government\u2019s fuel supply network.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Waltz, who chairs the House subcommittee on military readiness, had similar concerns. According to his office, multiple fuel suppliers reached out to Waltz with worries that if AEG managed the network, it could compromise their proprietary information and force them to consider leaving the government\u2019s network.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Waltz\u2019s letter, he said, without mentioning KHI or AEG by name, the contract should go to a \u201cneutral liaison\u201d between fuel suppliers and the government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI am concerned that the compromised competition could potentially damage the government\u2019s aviation fuel network and military readiness,\u201d Waltz said in the Dec. 12 letter, obtained by Defense News.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whichever company wins will get to manage and charge fees for a huge number of transactions for fuel and related services. According to solicitation documents, KHI handled just over $1 billion in military fuel sales and ground service expenses in 2019 and nearly $900 million in 2018. How much KHI earned that way isn\u2019t public, and the listed $2.5 million contract value for last year likely only reflects what KHI charged to the government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the competition continues, the DLA subagency responsible for the contract, DLA Energy, has extended its current contract with KHI to June 30, 2023, and included a six-month option that, if exercised, would further extend the contract to Dec. 31, 2023.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AEG did not respond to multiple requests for comment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DLA spokeswoman Michelle McCaskill said there\u2019s no time-frame for a new award.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cDLA Energy determined that corrective action was the best course of action in response to the protest and is therefore re-evaluating relevant offers,\u201d she said. \u201cDLA is unable to provide further details while the source selection process is ongoing.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Asked to address concerns about potential conflicts of interest, McCaskill said DLA follows the relevant federal acquisition regulations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In a statement, KHI President Virginia Zimmerman said KHI should win the contract again because the company maintains a large network of fuel suppliers and was the longtime incumbent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cKHI is uniquely qualified to support the warfighter due to KHI\u2019s position in maintaining and operating one of the world\u2019s largest commercial aviation fuel networks, decades of experience and expertise in providing government technology solutions, and successful management of the on-the-ground complexities facing the U.S. Government in the procurement of fuel across the globe,\u201d Zimmerman said in the statement.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Rep. Michael Waltz raised alarms about the AIR Card contract process.<\/p>\n","protected":false},"author":7,"featured_media":117491,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":19,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":{"2":{"categories":["pentagon-congress","news","middle-column","home"],"primary_category":"pentagon-congress"},"4":{"categories":["pentagon-congress","news","middle-column","home","daily-news-roundup","newsletters"],"primary_category":"pentagon-congress"},"5":{"categories":["pentagon-congress","news","middle-column","home","daily-news-roundup","newsletters"],"primary_category":"pentagon-congress"},"6":{"categories":["pentagon-congress","news","middle-column","home","daily-news-roundup","newsletters"],"primary_category":"pentagon-congress"},"7":{"categories":["pentagon-congress","news","middle-column","home","daily-news-roundup","newsletters"],"primary_category":"pentagon-congress"},"8":{"categories":["congress","federal-oversight","management","budget","home","govcon","contracting","regulations"],"primary_category":"congress"}}},"categories":[8,160,36,19],"tags":[],"coauthors":[3446],"class_list":["post-64305","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-congress","category-daily-news-roundup","category-newsletters","category-pentagon"],"acf":{"subheadline":"","legacy_arc_id":"MPN55TE6BZH6DG4YYM74RWC6VQ","arc_canonical_url":"\/pentagon\/2023\/01\/30\/snagged-military-fuel-card-contract-triggers-lawmaker-scrutiny\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Snagged military fuel card contract triggers lawmaker scrutiny - Defense News<\/title>\n<meta name=\"description\" content=\"Rep. 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