DOJ scrutinizing fuel supply contracts for US military in South Korea

6 March 2018 2:21pm
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23 February 2018. By Joshua Sisco and Ron Lubosco.

Antitrust prosecutors at the US Department of Justice are investigating potential bid-rigging on federal government contracts for fuel supplies for US military operations in South Korea, MLex has learned.

The investigation is in the early stages and is targeting companies in both the US and Korea, including Korea-based Hyundai Oilbank, it is understood.

Hyundai Oilbank, along with Hanjin Transport, GS Caltex, Hyundai Glovis, SK Energy, CJ Korea Express, S-Oil, Jier Shin Korea, and Florida-based World Fuel Services, all supply the US military with fuel, according to the federal data procurement services website.

The companies did not respond to requests for comment.

Prosecutors in the DOJ antitrust division’s Washington, DC offices are understood to be leading the investigation. The DOJ did not immediately respond for comment.

The contracts are coordinated through the Defense Logistics Agency, part of US Department of Defense, which buys supplies and coordinates a host of support services for the US military operations around the world. DLA Energy coordinates fuel supplies and related technical and service functions.

As one of the largest US military installations in the world, fuel supply to US Forces Korea is big business and multi-year contracts can run into the hundreds of millions of dollars.

DLA Energy did not respond for comment.

It is unknown which specific types of fuel are under investigation or what those fuels are used for. Through DLA Energy, the US military receives supplies of aviation and marine fuels, diesel, and bulk petroleum products including oil and lubricants.

Korea is the third-largest foreign presence of the US military behind Germany and Japan, and the border between North and South Korea is one of the most heavily militarized in the world. US military operations in the country total close to 30,000 troops.

There is no indication of why prosecutors opened the investigation, but the antitrust division routinely conducts training for procurement departments of government agencies to enable employees to spot suspicious bidding conduct among potential contractors.

- With assistance from Leah Nylen

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