Sugar-Solicitation_Invitation-Announcement_for_FFP_Inv_3_FINAL_11_14_13.pdf

November 14, 2013 Invitation No. 3 under Announcement FFP1 1

UNITED STATES Farm Date Issued: November 14, 2013 DEPARTMENT OF Service AGRICULTURE Agency

ANNOUNCEMENT FFP1, INVITATION NO. 3

SALE OF COMMODITY CREDIT CORPORATION-OWNED SUGAR

RESTRICTED FOR THE PRODUCTION OF BIOFUEL

The Commodity Credit Corporation (CCC) invites offers under section 9010 of the Farm Security and Rural Investment Act of 2002, as amended by section 9001 of the Food, Conservation, and Energy Act of 2008, (7 U.S.C. 8110), from bioenergy producers to purchase sugar from CCC, subject to the terms and conditions of this Announcement and Invitation. Under the Feedstock Flexibility Program (FFP), the use of sugar sold by CCC to bioenergy producers is restricted to the production of biofuel. Biofuel, for the purpose of this Invitation, means products such as ethanol, butanol, or other marketable biofuels as CCC determines.

CCC will conduct compliance activities to verify the use of the sugar is in accordance with this Invitation, and successful offerors (purchasers) must submit a plan for the disposal and allow CCC access to facilities and records for such verification. Bioenergy producers without an Environmental Protection Agency (EPA) plant number are required to contact the CCC Contracting Officer before the bid due date in order to determine whether their operation and product is suitable for making an offer for consideration under this Invitation. Bioenergy producers with an EPA plant number are pre-qualified. Subcontractors and non-manufacturers (e.g., brokers) are excluded from consideration.

Quality of raw cane sugar will be based on KC-227, Raw Sugar Certification Report, and quality of refined beet sugar will be based on KC-227-A, Refined Sugar Certification Report. Offerors are encouraged to contact Warehouse Operators (Sugar Processors) in advance of bidding to discuss the quality of sugar to be delivered, a delivery schedule, and to prearrange a schedule for premiums and discounts. CCC will not be responsible for the quantity or quality of sugar delivered out of the storage facility, nor will CCC be responsible for any storage charges beginning November 1, 2013, or handling charges, including loadout.

CCC Sugar Storage Agreement (SSA) rates are $0.08 per cwt per month for raw cane sugar and $0.10 per cwt per month for refined beet sugar. Offerors awarded a contract will be responsible for storage charges beginning November 1, 2013, and loadout charges. The rate for load out is $0.18 per cwt for all sugar types.

A catalog listing with CCC-owned quantities is attached to this Announcement/Invitation. Participants are encouraged to make offers on all catalog items. The minimum acceptable offer is 50,000 short tons (100 million pounds). No offer on any one catalog item number will be contingent upon the acceptance of another catalog item number. Contract awards will be made based on bid evaluation that results in the overall greatest efficiency to CCC.

Purchasers of sugar must remit to CCC 100% of contract value within five business days of contract date. CCC will transfer title to the sugar (instore) upon receipt of payment. If payment is not received within

November 14, 2013 Invitation No. 3 under Announcement FFP1 2 five business days of contract date, interest will accrue for the account of the buyer on the sixth business day and continue up to the date payment is received by CCC. It is not acceptable for a purchaser to withhold payment in favor of continuing to pay interest to CCC.

Any biofuel producer that wishes to participate in the EPA’s Renewable Fuel Standard (RFS) program must comply with EPA regulations, in 40 CFR part 80; however, participation in RFS is not a requirement for participation in FFP. EPA has confirmed that ethanol produced from U.S. sugarcane would qualify for an advanced fuel Renewable Identification Number (RIN), and that ethanol produced from U.S. sugar produced from U.S. sugar beets would qualify for a conventional RIN, subject to certain grandfathering provisions.

Offers must be submitted for each lot in its entirety, with a price expressed in U.S. dollars per pound up to four decimal places. No bids will be accepted on partial lots. Offerors may specify a minimum and/or maximum total quantity to purchase in Item No. 4, Miscellaneous Information, on Offer Form, CCC-331D.

Offers and any modifications or withdrawal of offers must be received in the Kansas City Commodity Office by 1:30 p.m., CT, November 20, 2013.

Successful offerors will be notified of acceptance by telephone by 1:30 p.m., CT, November 21, 2013.

The envelope containing offers must be plainly marked “DO NOT OPEN UNTIL PRESCRIBED TIME UNDER ANNOUNCEMENT FFP1, INVITATION NO. 3. Offerors are responsible for the timely receipt of offers and any modifications, or withdrawal of offers.

SUBMISSION OF OFFERS

A. How to Submit Offers

(1) Offers, modifications, withdrawals, and cancellations shall be submitted by one of the following methods.

(a) Express or regular mail, and/or hand delivered. Place the notation “Offer under

Announcement FFP1” on the envelope (preferably at the lower left corner).

(b) Facsimile (FAX) to (816) 926-6795. Place in the subject line “Offer under Announcement

FFP1”.

(2) Offer form CCC-331D must be signed. Reproductions of the offer form are acceptable.

(3) CCC will not be responsible for any failure attributed to the transmission or receipt of faxes including, but not limited to, the following:

(a) Receipts garbled or incomplete;

November 14, 2013 Invitation No. 3 under Announcement FFP1 3

(b) Availability or condition of the receiving fax equipment;

(c) Incompatibility between the sending and receiving equipment;

(d) Failure of the Offeror to properly identify the information;

(e) Illegibility of the information; and

(f) Security of data.

(4) Envelopes containing the offers are to be sealed and marked with the name and address of the offeror in the upper left corner. Offers submitted by express mail must be sealed inside a second envelope. All envelopes must be plainly marked with the following statement, “DO

NOT OPEN UNTIL PRESCRIBED TIME UNDER ANNOUNCEMENT FFP1,

INVITATION (Enter Appropriate Invitation Number).” If overnight/express service is utilized, this statement must be printed clearly on the outer express envelope, not on the mailing label.

(5) Changes by facsimile must contain the required signatures.

B. Where to Submit Offers

(1) Offers, modifications, withdrawals, and cancellations of offers shall be submitted to the Kansas City Commodity Office (KCCO) and must be received by the date and local time specified in the invitation for receipt of offers.

By Mail: USDA-FSA-DACO-KCCO Beacon Facility – Mailstop 8698 P. O. Box 419205 Kansas City, MO 64141-6205

Hand delivered: Kansas City Commodity Office USDA-CCC-FSA – Mailstop 8698 6501 Beacon Drive Kansas City, MO 64133-4676

By Fax: 816-926-6795

(2) If an offer is sent by fax, the recorded date and time per incoming facsimile will serve as proof of receipt for the Kansas City Commodity Office and CCC. OFFERORS ARE

RESPONSIBLE FOR THE TIMELY RECEIPT OF OFFERS AND AMENDED

CHARGES. No offers, modifications, or withdrawals will be accepted by telephone.

November 14, 2013 Invitation No. 3 under Announcement FFP1 4

(3) If an offer is sent by express or regular mail and/or hand delivered, the date and time of receipt will be recorded by the Kansas City Administrative Office’s (KCAO) mailroom’s date and time stamp.

C. What to submit

(1) Each Offeror shall submit a completed CCC-331D, Offer Form, (attached);

(2) Reproduction of the forms is permissible.

D. Basis of Offer

The content of an offer will include:

(1) Announcement FFP1, Invitation 3;

(2) Company name, address, contact name, telephone, facsimile numbers, and email address;

(3) EPA Plant number (for domestic bioenergy producers only);

Note: If EPA plant number is not available, advance approval must be obtained from the Contracting Officer.

(4) Quantity expressed in pounds;

(5) INSTORE, location (address, city, state, and zip); and

(6) The offer price must be stated in U.S. dollars per pound (maximum four decimal places).

PROVISIONS OF CONTRACT

The contract will consist of:

(1) Producer’s offer;

(2) CCC’s Acceptance of Offer;

(3) This Announcement/Invitation; and

November 14, 2013 Invitation No. 3 under Announcement FFP1 5

(4) Performance Bond (if required). See section on Performance Bond/Letter of Credit Requirement for International Producers.

TRANSFER OF TITLE

Transfer of title to successful offeror will occur upon receipt of payment.

FINANCIAL ARRANGEMENTS

Payment submitted by company, certified or cashier’s check:

By regular mail:

USDA/FSC/RMO

Mail Stop 8212 P.O. Box 419205 Kansas City, MO 64141-6205

By Express Delivery Services:

USDA/FSC/RMO

Mail Stop 8212 9240 Troost Avenue Kansas City, MO 64131

Payment submitted by Wire Transfer of funds:

Commodity Credit Corporation Account Number 0004992 Special instructions: BNF = /AC -4992 OBI= CCC!

ABA#021030004

Federal Reserve Bank of New York 33 Liberty Street New York, NY 10045

GENERAL COMPLIANCE

A. THE FOLLOWING REQUIREMENTS APPLY TO PURCHASERS:

1. Companies purchasing CCC-owned sugar must provide a production plan describing the sugar conversion process prior to converting into biofuel using sugar stocks. Production plans and changes to production plans must be cleared in advance by the CCC Contracting Officer.

2. Sugar must be produced into biofuel by November 30, 2014.

November 14, 2013 Invitation No. 3 under Announcement FFP1 6

3. Purchasers will be required to permit CCC access to the facility to conduct on-site compliance reviews to verify production of biofuel using sugar stocks.

4. Compliance reviews will be conducted to trace use of the sugar purchased under this invitation for the production of biofuel. Bioenergy producers must verify and track movement of sugar accepted into the biofuel plants through conversion of sugar into biofuel.

5. CCC will require documentation and verification from purchasers (biofuel producers) that the quantity of U.S. origin sugar purchased was used in a facility for the production of biofuel.

6. The purchaser must submit biofuel production reports containing details on sugar stocks on a monthly basis to the following address:

USDA-FSA-DACO-KCCO

Commodity Management Division Merchandising Branch

Beacon Facility – Mailstop 8748 P. O. Box 419205 Kansas City, MO 64141-6205

B. FAILURE TO PERFORM, AND LIQUIDATED DAMAGES:

CCC-owned sugar is being sold only for use in the production of biofuel under this Invitation, and any other use may result in CCC sugar loan forfeiture activity and additional costs to CCC. Accordingly, if a purchaser fails to timely prove production of biofuel corresponding to CCC sugar purchased in an amount sufficient to offset the awarded amount for that corresponding sugar, the purchaser will be subject to liquidated damages.

The purchaser may, prior to November 30, 2014, request in writing a one-time extension of up to six months to use the sugar in the production of biofuel. The extension request must include a detailed explanation for consideration by the CCC contracting officer as to why the production time requirement will not be met.

Purchasers who fail to perform to the satisfaction of the CCC contracting officer by November 30, 2014, or the extended time period, if applicable, shall pay CCC by way of compensation as liquidated damages, and not as penalty, an amount as follows:

CCC’s cost to acquire the sugar times 125 percent, minus the price the purchaser paid for the CCC-owned sugar, times the quantity of sugar for which the purchaser was unable to verify to the satisfaction of the CCC contracting officer that the sugar was used in the production of biofuel. If the purchaser paid multiple prices for the sugar, the weighted average price(s) will be used if none of the sugar was verified as used in the production of biofuel. If liquidated damages apply to only a portion of the sugar, the CCC contracting officer will use the highest CCC acquisition cost for sugar first, followed by succeeding lower costs, until the quantity is satisfied.

November 14, 2013 Invitation No. 3 under Announcement FFP1 7

The purchaser agrees to pay such damages upon demand.

C. RECORDS RETENTION

Purchasers must maintain supporting documentation for a period of six years from the date of the contract and allow the CCC representative access to the processing plant and to the plant records.

D. DISPUTES

1. Any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail or otherwise furnish a copy to the purchaser. The decision of the Contracting Officer shall be final and conclusive. However, the purchaser may appeal to the Civilian Board of Contract Appeals within 30 days from the date of receipt of the Contracting Officer’s decision.

Appeals should be filed with the Clerk of the Civilian Board of Contract Appeals, 1800 F Street, N.W., Washington, D.C. 20405. Other methods of filing and further information on appeals can be obtained from the Board at http://www.cbca.gsa.gov/. The purchaser shall mail or otherwise furnish to the Contracting Office a copy of the appeal filed. The decision of the Civilian Board of Contract Appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this paragraph, the purchaser shall be afforded an opportunity to be heard and to offer evidence in support of his appeal. Pending final decision hereunder of a dispute, if performance under the contract has not been completed by the purchaser or terminated by CCC, purchaser shall proceed diligently with performance of the contract and in accordance with the Contracting Officer's decision.

2. This “Disputes” section does not preclude consideration of any questions of law in connection with decisions provided for in paragraph 1 above. Provided, that nothing in the contract shall be construed as making final the decision of any administrative official, representative, or board, on a question of law.

3. If an appeal is filed by purchaser from a final decision of the Contracting Officer under this Disputes section denying a claim arising under the contract, simple interest in the amount of the claim finally determined owed by CCC shall be payable to purchaser. Such interest shall be at the rate determined by the Secretary of the Treasury pursuant to Public Law 92-41, 85 Stat. 97, from the date purchaser furnishes to the Contracting Officer his written appeal under this Disputes paragraph, to the date of (1) a final judgment by a court of competent jurisdiction, or (2) mailing to purchaser of a supplemental agreement for execution either confirming completed negotiations between the parties or carrying out a decision of a Board of Contract Appeals.

4. Notwithstanding paragraph 3 above, (1) interest shall be applied only from the date payment was due, if such date is later than the filing of an appeal, and (2) interest shall not be paid for any http://www.cbca.gsa.gov/

November 14, 2013 Invitation No. 3 under Announcement FFP1 8 period of time that the Contracting Officer determined purchaser has unduly delayed in pursuing remedies before the Board of Contract Appeals or a court of competent jurisdiction.

INTERNATIONAL COMPLIANCE

In addition to general compliance requirements, for production outside of the United States (U.S.) with sugar purchased from CCC, the following requirements apply:

A. In order to verify and track movement of sugar from any U.S. port to any foreign port with eventual delivery to the foreign plant, international producer must appoint an Independent Marine Surveyor to perform a draft survey on the vessel at the port of discharge and obtain acceptable export documentation for commerce tracking that includes a copy of a non-negotiable ocean bill of lading issued by a freight forwarder and signed by an ocean carrier (or its agent); a copy of the draft survey conducted at the discharge port in the foreign country destination; and copies of the weigh scale tickets in the foreign country destination (or port weigh bridge receipts) at the time the sugar is discharged from on board the vessel.

B. Weigh scale tickets should be provided at offloading at the foreign port of discharge and then again upon entering the production facility.

C. CCC will require proof of production, to be obtained by providing plant production records, validated by an independent third party acceptable to CCC.

PERFORMANCE BOND/STAND-BY LETTER OF CREDIT

REQUIREMENT FOR INTERNATIONAL PRODUCERS

As a condition of being awarded a contract under this Announcement/Invitation, the producer outside of the U.S. who purchases CCC-owned sugar in anticipation of production outside of the U.S. must furnish a performance bond or a stand-by letter of credit in form and substance satisfactory to CCC, which meets the criteria set forth in this section:

A. The bond or stand-by letter of credit may cover purchases made either during the period of time specified in the bond (a term bond) or for a specified time period (a single purchase bond).

B. Only the bioenergy producer may be the principal on the bond or stand-by letter of credit covering such sugar to be used in the production of biofuel. The surety or sureties shall be among those listed by the Secretary of the US Department of Treasury as acceptable on Federal bonds (http://www.fms.treas.gov/c570/c570.html).

C. The obligation under the bond or stand-by letter of credit shall be made effective no later than the date of title transfer of the sugar.

D. The amount of the bond or stand-by letter of credit shall be equal to 20 cents per pound for sugar purchased under this announcement/invitation.

FALSE STATEMENTS

http://www.fms.treas.gov/c570/c570.html

November 14, 2013 Invitation No. 3 under Announcement FFP1 9

Participation in this program is certification with full knowledge of the provision of 15 U.S.C. 714m(a), for making any statement knowing it to be false, for the purpose of influencing in any way the action of the United States Department of Agriculture.

Further information on this announcement/invitation for offers may be obtained by contacting:

Kansas City Commodity Office Commodity Management Division

Telephone (816) 926-3816 Emails: martha.mitchell@kcc.usda.gov kenneth.knosp@kcc.usda.gov

Martha Mitchell or Ken Knosp CCC Contracting Officers Kansas City Commodity Office

Attachment mailto:martha.mitchell@kcc.usda.gov mailto:kenneth.knosp@kcc.usda.gov