Attachment 8 to PWS Prime Vendor Cargo.doc

HTC711-08-R-0011

Performance Work Statement Attachment 8

ATTACHMENT 8

SHIPMENTS OF DLA PRIME VENDOR CARGO

1. Special Provisions for Defense Logistics Agency (DLA) Prime Vendor Program

1.1 Background. DLA, through its Defense Supply Center Philadelphia (DSCP), has entered into contracts with various suppliers and distributors under a “Prime Vendor” program for the supply of various commodities to U.S. Government agencies. These contracts support DSCP customers in geographic locations worldwide. The Defense Distribution Center (DDC), is an authorized ordering office for Prime Vendor Shipments through DSCP under this contract. The items are shipped overseas under the USC contract via ocean transportation arranged through DDC. Under the terms of the DLA Prime Vendor contracts, ownership and title to these items, in most cases, remains with the Prime Vendor while moving within the Defense Transportation System (DTS).

1.2 Contractual Intent. Generally, the terms, conditions and prices of this contract shall apply equally to the transportation of both Government owned and non-Government owned cargo. For example, the standard for the liability of a USC contractor for loss/damage to cargo is the same in both situations. Also, compensation due the USC contractor for detention of carrier containers, for port storage, for reefer maintenance, etc. is the same in both situations. However, experience has demonstrated that certain matters (claims procedures and claims dispute resolution procedures for loss/damage claims related to Prime Vendor cargo, container detention by the Prime Vendor, maintenance of Prime Vendor detained refrigerated containers, port storage related to Prime Vendor detained containers, services not ordered by the U.S. Government under this contract, etc.; remedial action for such claims; and payment of such claims) are properly handled directly between the Prime Vendor and a USC contractor (the real parties in interest) where non-Government owned cargo is involved. Primarily because the Prime Vendor owns the cargo and because only the Prime Vendor and a USC contractor have specific, factual knowledge and evidence related to such matters, some Prime Vendor contracts require the Prime Vendor and a USC contractor to address/resolve such matters directly with each other. The Government customer can be harmed when procedures for resolving such matters between the Prime Vendor and a USC contractor are not established and problems are not resolved directly between the Prime Vendor and a USC contractor.

1.2.A The U.S. Government shall not be liable for loss or damage to Prime Vendor cargo. Any discrepancy reports, notice of claims for such loss or damage shall be submitted by the DSCP Prime Vendor directly to the USC contractor for resolution, not to DSCP or USTRANSCOM. The USC designated contractor shall accept such discrepancy reports, notice of claims or claims for such loss or damage from the DSCP Prime Vendor, as well as any other communications regarding such loss or damage.

1.2.B The U.S Government shall not be liable for container detention, reefer maintenance, port storage or services not ordered by the U.S. Government in connection with Prime Vendor cargo. The contractor shall submit directly to the Prime Vendor, with copy to the USC Contracting Officer, any claims for damage, detention, port storage, reefer maintenance, services not ordered by the U.S. Government, etc.

If the contractor is unable to communicate directly with the Prime Vendor for any reason, the Contractor shall so advise the USC Contracting Officer.

1.2.C Notwithstanding the provisions of 1.2B above, the contractor may file a claim with the Contracting Officer and the contractor may be entitled to payment under the terms of this contract in connection with Prime Vendor cargo for container detention, reefer maintenance, or port storage caused by acts of the United States Government. In no case will the contractor be entitled to payment where acts of the Prime Vendor, acts of other third parties, acts of nature or other non-human origin, or action of any entity or force other than the United States Government causes the detention, storage or maintenance.

1.3 Third-Party Agreement. Under the terms of the DSCP Prime Vendor contracts, the Prime Vendor(s) must contact one or more USC contractors for the routes within the Prime Vendor’s USC-06 Performance Work Statement geographical responsibility in an attempt to develop an agreement outlining the process in resolving any issues that may arise in the transportation of product during performance of the DSCP Prime Vendor contract. Upon request by a DLA Prime Vendor, the contractor should (see section 3.5.1.1 of the PWS) enter into a written agreement with the Prime Vendor which shall, as a minimum, define procedures to submit and process claims and resolve disputes arising in connection with U.S. Government ordered transportation services. These procedures should include the matters described in 1.2.A and 1.2.B. A copy of the agreement, and any changes thereto, shall be furnished to the Contracting Officer. The USC contractor is not required to negotiate or accept any particular term or condition in developing procedures with a Prime Vendor. Specific content is left to the Prime Vendor and the USC contractor. The USC contractor is required to seek in good faith to establish procedures that will be in place if an incident arises during contract performance. The Government’s interest is in avoiding ad hoc approaches at the time an incident arises.

1.4 Contract Disputes Act Not Applicable. Because matters of the type described in 1.2.A and 1.2.B will be handled under some sort of business arrangement between the Prime Vendor and a USC contractor, rather than under the terms of the USC, the Contract Disputes Act and the “Disputes” clause in the USC are not applicable to such matters. Instead, disputes between a Prime Vendor and a USC contractor regarding such matters will be governed by their business arrangement and laws applicable to such arrangements. Matters of the type described in 1.2.C are subject to the Contract Disputes Act and the Disputes clause of this contract.

1.5 Third Party Beneficiary. As noted in Section 1.2, except for the subjects covered in Sections 1.2 and 1.3 and except for the modified provisions described in 1.6 or other exceptions specified elsewhere in this contract, the terms, conditions and prices of this contract apply equally to the transportation of both Government owned and non-Government owned cargo. For non-Government owned cargo, the Prime Vendor is an express beneficiary of the terms, conditions and prices of this contract that apply equally to the transportation of both Government owned and non-Government owned cargo, as well as to the modified provisions described in 1.6. (Similarly, under the DLA Prime Vendor contract, the USC contractor is made an express third party beneficiary of provisions making the Prime Vendor responsible to the USC Contractor for detention of contractor containers, port storage of detained containers, and maintenance of detained refrigerated containers.) Third party beneficiaries are subject to all amendments and modifications of this contract.

1.6 Other USC Provisions Impacted by the Special Provisions for the DLA Prime Vendor Program.

Unless specified elsewhere in this contract, this attachment 8, including the additional items below, are the only variations in USC terms and conditions applicable to transportation of non-DOD owned cargo for the DLA Prime Vendor Program.

a. Paragraph (d) of FAR 52.212-4, is modified in accord with Section 1.4.

b. FAR 52.233-4 does not apply to claims of breach of the business agreement between the Prime Vendor and the Contractor.

c. DFARS 252.233-7001 does not apply to disputes between the Prime Vendor and the Contractor. See Section 1.4.

d. Section 2.7.1, Liens/Seizure of Cargo of the “Additional Clauses” Section of this contract shall not apply to Prime Vendor cargo. (Similarly, the DLA Prime Vendor contract does not prohibit the Prime Vendor from exercising any right of setoff involving a commercial contract or other remedial action to protect its interest with respect to USC Contractor(s).)

e. The clause “Application of COGSA for Non-Government Owned Cargo” at Section 2.2 of the “Additional Clauses” Section shall apply to transportation of Prime Vendor Cargo instead of the clause “Application of COGSA” at section 2.1.

f. In PWS, paragraph 3.G.4 the Prime Vendor, not the Government, pays the Contractor for detention.

g. In PWS, paragraph 3.G.8, the Contractor is entitled to notice, etc. and reimbursement from the Prime Vendor, not the Government.

h. In PWS, paragraph 3.G.9, the Prime Vendor’s representative, not the Contracting Officer, determines theft or disappearance of Contractor equipment.

i. In PWS, paragraph 3.G.11, the Prime Vendor, not the Government, reimburses the Contractor.

j. In PWS, paragraph 6.C.2, the USC Contractor, not the Government, pays the Prime Vendor.

k. In PWS, paragraph 6.C.3, the Prime Vendor, not the Government, may purchase containers.

l. In Attachment 6, Invoicing and Payment, the Prime Vendor and the USC Contractor shall develop their own invoicing and payment procedures for matters between them and described in paragraph A.1

m. In Attachment 7, the Prime Vendor and the USC Contractor may develop their own reports and formats.

1.7 The Contracting Officer will provide written notice to any USC carrier when a specific Prime Vendor wins award of a DLA Prime Vendor contract and may approach the USC carrier to negotiate an agreement. The notice shall include the name, address, and contact information for the specific Prime Vendor.