Questions Answers to RFP v5 9 Sep 08.doc

QUESTIONS and ANSWERS IN RESPONSE TO RFP

HTC711-08-R-0011, UNIVERSAL SERVICE CONTRACT (USC-6)

Question 1: Reference ADDENDUM TO FAR 52.212-1 Instructions to Offerors – Commercial Items (Nov 2007), Item V Tariffs

Please advise number of users that will require simultaneous access to tariffs.

Answer 1: Two Question 2a: Section 2, page 12 of 62, Bunker Adjustment Factor (BAF):

a. The trigger for application of the BAF has been changed from a 20% differential from the baseline to a 10% differential from the baseline. Please provide the economic justification for that change.

Answer 2a: The trigger for application of BAF has been changed to 20%.

Question 2b: Please provide the calculated dollar amount of the baseline fuel price for each covered route. (We request this in order to confirm our common understanding of the derivation of the indexed rates).

Answer 2b: The baseline fuel price language has been changed to the following:

Rate Rules, 2.2 Baseline Fuel Price

The BAF baseline fuel price will be calculated using the average price for the three (3) calendar months prior to the month in which the solicitation is issued. (Block 6 of SF1449 shows the issue date of the RFP,) Should the Government exercise an option to extend the contract, the BAF baseline fuel price will be calculated using the average price for the three (3) calendar months preceding the month in which the pricing due date falls for that option period. Prior to exercising the option, however, the Government reserves the right to select a different time period for calculating the option period BAF baseline.

Baseline Price will be $689.54 (Los Angeles) and $673.18 (Norfolk).

Question 2c: In sections 2.3.2 and 2.3.4 (page 13), please specify that the monthly computation of adjusted average fuel prices will be posted at the latest by the 10th of the month prior to the month in which it will be applied (i.e., March 10 for April application). This is necessary in order to avoid confusion and excess work associated with re-rating bookings made before the index is calculated for any given month.

Answer 2c: The language in Rate Rules, 2.3.2 has been changed to incorporate the posting date:

2.3.2 A three (3) calendar month average fuel price shall be computed by SDDCxe "SDDC" for Los Angeles and Norfolk. This average price shall be calculated on or after the first day of the month for the prior month and shall apply to shipments booked for sailings in the next month. The monthly computation of adjusted average fuel prices will be posted to the SDDC website no later than the 10th of the month prior to the month in which it will be applied. Example: The average fuel prices for calculation of BAF charges applied in March shall be based on bunker prices for the month of January.

Question 2d: With respect to section 2.7 (page 14), what is the rationale for making a unilateral change to the contract when a new BAF formula is adopted? Such a change must by law be made by a bilateral modification. In addition, the contract should specify that the new formula will be implemented sufficiently in advance of the due date for refreshed rates in any option year to allow the carriers to have an opportunity to make any necessary adjustments their rates.

Answer 2d: The new methodology will be unilaterally incorporated into the contract. However, it will not be effective until the option year (if the contracting officer executes the option year). Since the option years are “unpriced”, they are done through a bilateral modification. Therefore, contractors will be able to consider the new methodology prior to submitting pricing and agreeing to the option year modification.

Question 3a: Section 3, page 14, Currency Adjustment Factor (CAF): The section is ambiguous in its application. Please confirm that CAF applies to both ocean and inland charges. If CAF is not payable on inland charges, what is the rationale for the distinction in light of the fact that inland transportation services are virtually always paid for in local currencies and constitute a significant portion of transportation costs?

Answer 3a: CAF only applies to the ocean portion of the transportation. Rates proposed for inland movements need to include costs for transportation services paid in local currencies.

Question 3b: Section 3.2.6 (page 15) provides that USTRANSCOM will commission an effort to develop a CAF methodology and will unilaterally incorporate that methodology into the contract. Please clarify that the intent is at that stage to apply the CAF to all routes. What is the rationale for making a unilateral change? Such a change must by law be made through a bilateral modification. Any change should be made sufficiently in advance of the due date for refreshed rates in any option year to allow the carriers to have an opportunity to make any necessary adjustments to their rates.

Answer 3b: The intent is to have the study recommend the most appropriate way to handle CAF.

The new methodology will be unilaterally incorporated into the contract. However, it will not be effective until the option year (if the contracting officer executes the option year). Since the option years are “unpriced”, they are done through a bilateral modification. Therefore, contractors will be able to consider the new methodology prior to submitting pricing and agreeing to the option year modification.

Question 4: Section 4, page 15, Fuel Adjustment Factor (FAF): What is the rationale for unilateral determination of the FAF? Such a change by law must be made through a bilateral modification. In addition, the contract should specify that the new formula will be implemented sufficiently in advance of the due date for refreshed rates in any option year to allow the carriers to have an opportunity to make any necessary adjustments their rates.

Answer 4b: The new methodology will be unilaterally incorporated into the contract. However, it will not be effective until the option year (if the contracting officer executes the option year). Since the option years are “unpriced”, they are done through a bilateral modification. Therefore, contractors will be able to consider the new methodology prior to submitting pricing and agreeing to the option year modification.

Question 5: Clause 52.216-19 ORDER LIMITATIONS, page 31 of 62: The clause states an order limitation of 10% of vessel capacity per voyage, but does not state any limitation on the routes to which that limitation shall apply. This creates an ambiguity in light of the provision at section 3.A.6 of the PWS (page 7 of 60), which does limit the routes to which the 10% of vessel capacity obligation applies. Please confirm that the more specific PWS section 3.A.6 provision controls over the more general 52.216-19 clause.

Answer 5: Clause language has been modified to mirror language in PWS Section 3.A.6

Question 6: Section 2, Maritime Clauses, pages 45 and 46: In the second paragraph of each of sections 2.1 and 2.2, the trigger for substitution of the UNCITRAL Convention provisions is potentially unlawful and therefore unenforceable as written. Specifically, entry into force for the United States may require domestic implementing legislation, passage of which may or may not be contemporaneous with Senate ratification. Thus, for domestic law purposes, Senate ratification of the Convention may not automatically displace COGSA. If that is the case, then implementation of the Convention in the contract would violate the mandatory provisions of COGSA, and would therefore be unlawful. This potential problem can be avoided, and the intent of the contract maintained, by changing the trigger for substitution to “the entry into force of the UNCITRAL Convention in the United States.”

Answer 6: USTRANSCOM determined this is the best manner to meet the Government’s requirements and the current Section 2.1 and 2.2 language will remain unchanged.

Question 7a: Section 2.3, page 46, Scope of Voyage (Liberties): a. In section 2.3.1.5, the reference to “allocable” costs in the first sentence is unclear. By definition, costs incurred by virtue of a unilateral CO decision will be allocable to the USC-6 contract. That first sentence describes the situation in which costs associated with non-USC-6 cargo are to be paid (i.e., the costs are attributable to the special situation and would not otherwise have been incurred). Does the word “allocable” add a third criterion to these two? If not, please so state. If it does add a further requirement for payment, explain the nature of that requirement.

Answer 7a: Section 2.3.1.5 of the RFP provides in relevant part. “The contractor may submit a request for an equitable adjustment to the contract for reasonable, allocable costs incurred to carry out the CO’s direction if such costs are caused by the need to respond to the special situation and would not have been incurred in performing the contract of carriage except for the special situation.” (Emphasis added.)

Similarly, Section 2.3.1.2 of the RFP provides, “After notification to the CO and approval by the CO of the contractor’s proposed course of action, the contractor may submit a request for an equitable adjustment to the contract for the reasonable, allocable, incurred costs to implement the approved course of action. It is understood that the contractor may be required to act before CO approval to prevent risk of loss, damage or injury to the vessel, her crew or cargo. If the contractor acts before notice to and approval by the CO, the contractor shall nonetheless be entitled to reasonable, allocable, incurred costs if the CO finds that the actions were prudent and necessary for the security and protection of government cargo. In no case shall an equitable adjustment duplicate compensation provided in a USC-6 rate, accessorial charge or similar charge or otherwise reimburse the Contractor for costs chargeable (by the Contractor) to or otherwise allocable to a non-USC-6 shipper. If the contractor has been paid for delivery to destination, the CO will consider this fact in evaluating any request for an equitable adjustment or potential government claim for a windfall to the contractor.” (Emphasis added.)

In the context of the entire Scope of Voyage Clause, then, the term “allocable costs” clearly refers to the pro rata assignment of costs to cargo booked under USC-6 – as opposed those costs assignable to cargo not booked under USC-6. To the degree, that the cost of diversion is not assignable to cargo booked under USC-6, those costs would not be “allocable” to the Government under this Clause.

Question 7b: In the event that the CO orders a diversion against the recommendation of the Contractor, and there is a vessel or cargo casualty following such diversion, does section 2.3.1.5 obligate the government to pay Contractor costs arising from a determination by a court or arbitrator that the diversion was unauthorized with respect to non-USC-6 cargo and thus that liability for damage to such cargo is not limited by COGSA and/or is not subject to general average? If the government does not intend to cover such costs, why is there not an absence of meaningful consideration and/or a taking of property without just compensation under this section?

Answer 7b: Section 2.3.1.5 merely creates a right, on the part of the Contractor, to submit “a request for an equitable adjustment” for the reasonable costs incurred by the Contractor in complying with the CO’s directions relative to the disposition of cargo booked under USC-6, provided that such costs would not have been incurred but for such compliance. Nowhere does this language create rights, remedies or liabilities relative to “a vessel or cargo casualty” arising out of such compliance. The Master is, at all times, responsible for the prudent navigation of the vessel and disposition of her cargo. Nowhere does the RFP relieve the Master of those obligations.

Should a court of competent jurisdiction (or duly appointed arbitrator) rule that the CO’s direction in some way vitiated the Master’s obligations or otherwise suspended his duty to act with the prudence required by the ordinary practice of seamen, the Government will respond to such ruling at that time.

We are unable to understand how any coordination with or direction of the CO could possibly amount to “a taking of property” by the US Government.

Question 7c: Section 6.1, page 50, Compensable Delays, makes reference to section 2.3.1 (Liberties), but provides that such section “provides for monetary equitable adjustment, but only in the case of maritime (not in-land) transportation. . . .” Is it the government’s intention not to pay the Contractor for increased inland transportation costs associated with a CO-ordered diversion of the vessel? If that is the case, what is the rationale for not providing compensation for these services, and under what theory would such a demand by the government for uncompensated services be lawful?

Answer 7c: Section 2.3 provides in relevant part: “[T]he diversion of U.S. Government cargo at sea requires the unique conditions set forth below.” Each such condition recited there “below” refers to either “the vessel,” “the master,” “the voyage,” “the port of discharge,” “ports of call,” “retain[ing] the goods on board,” or “divert[ing] the cargo to a port.” Nowhere do those conditions contemplate diversions in other than maritime transportation.

Accordingly, the Scope of Voyage Clause is properly limited to “monetary equitable adjustment, but only in the case of maritime (not inland) transportation where attempted delivery to the destination port has been abandoned.”

“[I]nland transportation costs associated with a CO-ordered diversion of the vessel” would and could only be properly addressed in a one-time-only Modification to USC-6. In-land transportation from a discharge port not contemplated by the contract of carriage must be negotiated anew with the CO and may potentially include a price reduction for non-conforming services.

Question 8: Section 2.7.1, page 48, Liens (Seizure of Cargo): The relationship between this section and the provision in section 1.6.d in Attachment 8 (Prime Vendor) is unclear. Vessel operator liens against cargo are possessory in nature. Thus, in order for a Contractor to have a meaningful lien on Prime Vendor cargo, the Contractor would have to delay/withhold delivery of any cargo with respect to which there were unpaid charges. Exercising such a remedy would prevent delivery of supplies to military personnel in Exigency and other areas. Does the government understand and accept that outcome?

Answer 8: Yes.

Question 9: Section 2.8, pages 48-49, Force Majeure: What is the meaning of the phrase “liability for costs/damages resulting from delay in performance” in the last sentence of this section? If delay is excused under this section 2.8, what would be the nature of “costs/damages resulting from delay in performance” that would not be excused? The exclusion appears to negate the purpose and effect of the entire section. Please explain the government’s interpretation of this provision.

Answer 9: Force Majeure does not address liability for loss/damage to cargo (see, instead, the applicable “Application of COGSA clause”), liability for costs/damages resulting from delay in performance, or matters other than excusable delay., Other clauses in the contract (such as FAR 52.212-4 paragraph f; 2.8 force majeure; 2.3.2 Scope of Voyage (Liberties); etc.) cover delay in performance or frustration of performance in certain situations. Additional Clauses" Section 6 Compensable Delays addresses compensation/financial liability in other situations.

Question 10: Addendum to FAR 52.212-2, page 59: This provision states that: “This acquisition is a competitive best value source selection.” There are also recitations at PWS pages 13 (section

3.B.1.1) and 38 (section 5.A.2.2.) stating that this is a best value contract. However, in part III of the FAR 52.212-2 Addendum (page 61), the contract states that: “ The basis for award will be

Low Priced, Technically Acceptable Offers after giving preference to VISA participants as described.” Given these conflicting descriptions of the award basis, please clarify whether the contract will be awarded on a best value or a low price technically acceptable basis, and set forth in detail the evaluation factors.

Answer 10: IAW FAR 15.101, Low price technically acceptable (LPTA) is a type of best value source selection.

Question 11: Addendum to FAR 52.212-2, page 59 (Modification No. 0001 version): In Section II (Voluntary Intermodal Sealift Agreement), the listing of the categories of priority for vessel capacity has been amended, primarily by removing the discussion of VISA Stage I and II commitment requirements. Our understanding of the amended language is that it is not intended as a substantive change from the original language, but rather that the change was adopted in order to conform the contract language more closely to the priority list as published by the Maritime Administration (see, e.g., 72 Fed. Reg. 45298-99 (August 13, 2007)). More specifically, we understand that the references in the modified language to “a VISA participant” continue to refer to a carrier that has enrolled for at least the minimum commitment levels for all three Stages of VISA as described, for example, at 72 Fed. Reg. 45300 (first column). Please confirm that this understanding is accurate. (This question applies with equal force to the modified VISA priority language in section 2 (Ordering Process for Bookings) set forth in the final two pages of Modification No. 0001.)

Answer 11: The understanding stated in the question is not accurate. When using commercial sealift capacity to meet DoD peacetime ocean transportation requirements, the VISA priorities as listed in DoDI 4500.57 (dated 18 March 2008) do not give a higher priority for carriers committed to all three stages. The first priority is U.S.-flag vessel capacity operated by a VISA participant and U.S.-flag Vessel Sharing Agreement capacity of a VISA participant.

Question 12: Section 3.A.5, PWS page 7, Responsibility for Charges and Taxes: The punctuation obscures the meaning of the section. Recommend that the section be revised to read as follows: The Contractor shall pay all dues, charges and taxes customarily levied on the vessel, however the amount thereof may be levied. The Contractor shall pay all taxes levied on the freight charges. The U.S. Government shall pay all dues, charges, duties, and taxes customarily levied on the cargo, however the amount thereof may be assessed.

Answer 12: The clause has been revised.

Question 13: Section 3.A.10 Electronic Commerce/Electronic Data Interchange (EDI): Is the contractor required to provide EDI transaction for both U.S. Government and Prime Vendor owned cargo? Is the contractor required to send EDI to the Prime Vendor?

Answer 13: The contractor is required to provide EDI transactions for both US Government and Prime Vendor cargo. The contractor is not required to send EDI transactions to the Prime Vendor.

Question 14: Section 3.A.15, PWS page 11, Chassis Requirements: The provision makes no distinction between CONUS and OCONUS operations, and makes no exception (included in earlier drafts) for those situations in which the custom of the trade does not include carrier-furnished chassis. The reality is that carrier-provided chassis are the norm only in the United States. This equipment is simply not available on the terms requested in much of the world. The requirement as written is therefore unreasonable in that it: (1) requests a service that in many cases cannot be provided, and (2) provides no compensation for the considerable costs that would be incurred in providing this service where it is usually not provided, but where it might be possible to do so. Please revise so that the chassis requirement applies only where carrier-provided chassis are the recognized custom of the trade.

Answer 14: PWS Section 3.A.15 has been revised to require that the contractor request a blanket waiver from the cognizant COR for movements over certain lanes that do not normally use chassis.

Question 15: Section 3.B.1.1.1, PWS page 13: There is a reference to “paragraph 4.B.3.4” regarding Prime Vendor cargo. There is no such paragraph.

Answer 15: Reference changed to Attachment 8, paragraph 1.3 Question 16: Section 3.B.1.5.1, PWS page 14, Required Delivery Dates: This section makes reference to the “acceptance logic resident in IBS.” We request that such logic be made available to the carriers so that systems may be configured to comply with the stated requirements.

Answer 16: The IBS logic supporting RDD validation along with the associated transit time tables are currently being updated for USC-6 and will be provided to the contractors by mid November.

Question 17: Sections 3.C.1.2.2.1, PWS page 14, OCONUS Drop and Pick Service: Our comment here relates to the comment in Item 13 above dealing with chassis requirements (PWS section 3.A.15). Specifically, at OCONUS locations, chassis are furnished by the trucker, not the ocean carrier. To the extent that chassis must be left with containers for loading, that will result in additional charges from the trucker (if the trucker can be induced to leave the chassis at all). Accordingly, the PWS must be revised to require chassis-based drop and pick only in those OCONUS locations where trucker practices make that service available, and an appropriate surcharge must be applicable. In general, the more realistic solution is to have live loads.

Answer 17: USTRANSCOM determined this is the best manner to meet the Government’s requirements and current PWS Section 3.C.1.2.2.1 and Section 3.A.15 language will remain unchanged.

Question 18: Section 3.C.1.3, PWS page 15, Live Load: The provision states in the third sentence that the shipper shall have three hours free time beginning at the scheduled appointment time or upon actual start. We understand that the intent is that the free time begins upon the earlier of those two events (otherwise the government could avoid paying for waiting time simply by refusing to begin operations). Please confirm that understanding and amend the language accordingly in order to avoid future confusion.

Answer 18: Free Time will commence at the earlier of the Appointment or start of loading. PWS Section 3.C.1.3 language has been changed to the following:

3.C.1.3 Live loadxe "Live load". For other locations in CONUS,xe "CONUS" the Contractor shall provide live load service at origin unless drop and pick service is ordered. The Contractor and the shipper shall set a live load appointment (date and time and specific location) for each container booked. The shipper shall have three hours' free tixe "free time"me, starting from the time of the appointment to load the container or upon actual start. The Contractor shall be paid waiting time at the rate of $60 per hour rounded to the next higher quarter hour Waiting time shall only run during the shipper’s normal hours of operation. In the event the Contractor does not meet the agreed appointment time by 15 minutes or more, the shipper may load the container immediately or reschedule the load for a later time. Free time start will be adjusted to actual start time. Shipper may also cancel the appointment and reschedule for a different day.

Question 19: Section 3.F.2, PWS 18, Expedited Delivery: The section recognizes that expedited delivery in German may take two business days. Similar constraints apply in other countries, and the standard should be the same (2 days) for all locations. Related to this, the 500 mile per day standard is unrealistic in light of inland transportation congestion issues in virtually all circumstances. The standard is also potentially unsafe in terms of encouraging speeds and hours of service beyond what is prudent and allowable. The standard should be revised to a more reasonable figure of 350 miles per day.

Answer 19: We will revise this section and reduce the mile per day standard to 400.

Question 20: Section 3.G.3, PWS page 19, Canceled Shipments/No Shows: These provisions are both ambiguous and unreasonable. The provision is ambiguous in that it states that the government will provide cancellation notice at least 24 hours prior to vessel cutoff, but it also states that there shall be no penalty for cancellation. Is there compensation to be paid if cancellation is not timely? If it is not the government’s intent to provide compensation in that situation, that approach should be revised in order to compensate carriers for the direct costs associated with having space reserved and not used.

Answer 20: USTRANSCOM determined this is the best manner to meet the Government’s requirements and the current PWS Section 3.G.3 will remain unchanged.

Question 21a: In section 3.G.4.1.1, move the first sentence to the end of the first paragraph and add at the end the words “prior to delivery.”

Answer 21a: The clause has been revised.

Question 21b: In the second paragraph of 3.G.4.1.1, add after the word “Exception” the phrase “to detention starting at delivery.”

Answer 21b: The clause has been revised accordingly: Exception to free time starting at delivery: When call-forward or staging is requested by the receiving activity, free-time will run commencing at RDD for the remainder of the requested hold time Question 22: Section 3.G.5, PWS Page 23, Rerouting of Containers: In the second paragraph of 3.G.5.2, there are references to sections G.5.1.2.2 and G.5.1.2.3. There are no sections that bear the numbers referenced.

Answer 22: References have been changed to 3.G.5.1.1.2 and 3.G.5.1.1.3

Question 23a: Section 3.H.8, PWS page 26, All Risk Liability: Please confirm that these rates are to be bid, not pre-set by the government.

Answer 23a: Yes Question 23b. Please confirm that Prime Vendors are not authorized to order “all risk” services (in light of the fact that the government has already placed all risk of loss on the PV).

Answer 23b: Only the Government is authorized to order all risk liability services to meet the Government’s requirement.

Question 23c: Would a carrier’s choice to decline to offer a bid on all-risk rates affect its ability to otherwise participate in the contract? Would such a choice to decline to bid affect contemporaneous best value booking decisions?

Answer 23c: Declining to offer a bid on all-risk rates does not affect the carrier's ability to otherwise participate in the contract. However, the offeror’s business decision not to submit a rate for all-risk liability will prevent the offeror from receiving and accepting bookings in which there is a Government requirement for all risk liability services.

Question 23d: Please provide the government’s analysis of the availability and cost of all-risk insurance of the type that this section requires the carrier to provide, and describe how such analysis will be used to determine whether carrier rate offers are fair and reasonable.

Answer 23d: Prospective offerors are responsible for conducting any analysis they determine to be required to meet the Government’s requirement as part of a business decision to submit an offer. The Government will determine price reasonableness in accordance with FAR 15.404.

Question 23e: If a carrier is unable to insure this risk, explain how in that situation any obligation to carry the cargo under the proposed terms would not fail for lack of consideration.

Answer 23e: If all-risk rates are not offered and the booking requires that accessorial, then the offeror’s business decision not to submit a rate for all-risk liability will prevent the offeror from receiving and accepting bookings in which there is a Government requirement for all risk liability services.

Question 24. Section 4.B, PWS pages 36-37, Shipments of Cargo Not Owned by the U.S. Government:

a. Under what contractual document will the agencies and departments referenced in section 4.B.1 have a legally binding obligation to pay the Contractor for the responsibilities listed in section 4.B.2?

b. Will USTRANSCOM pay the Contractor for the section 4.B.2 obligations if the relevant agency or department fails or refuses to do so? If the answer to this question is “no,” does that answer apply even where the reason that the agency or department refuses to pay is that it has no legally binding obligation to do so? If USTRANSCOM will not pay the Contractor in those situations in which the agency or department refuses to pay based on the lack of a legal obligation to do so, on what legal basis does USTRANSCOM have the authority to order services or cause the Contractor to incur costs for which no government entity is willing to pay?

Answer 24: This section has been removed

Question 25a: Section 5, PWS pages 38-39, Measuring Performance: Section 5.A.2.1 provides that Contractors shall provide performance data “not later than the close of business on the first business day of each month.” Does transmittal of EDI messages in the normal course of business constitute compliance with this requirement?

Answer 25a: Yes, transmittal of EDI messages in the normal course of business constitutes compliance with Performance Objectives 1 and 2.

Question 25b: Section 5.A.2.1 previously referenced a process for the prompt (15 days) resolution of disputes. Modification No. 0001 removed that provision. Is it the government’s position that there will be no mechanism for resolving performance evaluation disputes prior to the imposition of carrier selection and pricing sanctions?

Answer 25b: The clause has been revised. It now reads:

“5.A.2.1 Performancexe "Performance" Assessment Performancexe "Performance" Averages shall be based upon a 90-day rolling average refreshed at the close of business on the 15th business day of each calendar month. Rolling 90-day averages shall be based upon performance data provided by the Contractor to SDDCxe "SDDC" not later than the close of business on the first business day of each month. The COR will coordinate with the Contractor to resolve all disputed performance assessment data prior to the refreshing of the Performance Average. Data points for Performance Objectives 1, 2 and 3 represent one customary shipping unit as booked.”

Question 25c: RDDs, a primary Performance Measure, are set solely by the government. Those dates are in many cases unrealistic. How will the performance evaluation system treat RDD dates that are countered by the Contractor? Specifically, if cargo is booked against the RDD date provided by the Contractor in a counter, will performance be measured against the date as proposed in the counter, or against the original RDD? If the latter, why is that process not unreasonable as measuring performance against a service that the Contractor has not offered to perform? If the “counter” RDD date is to be used to measure performance, how will the government’s information technology systems ensure that performance is evaluated against that corrected RDD? How will that system work if the counter is made and accepted by email?

Answer 25c: Performance measurement shall be based upon the counter and subsequently accepted RDD. Government information technology systems shall be configured to accommodate this.

Question 26: Section 6.C.2, PWS page 40, Exigency Area Container Detention: This provision is unclear in much the same way as section 3.G.4 (PWS page 20) is. Specifically, the inclusion of the phrase “Government caused” in the first sentence following the table in section 6.C.2.1 is misplaced, because all post-delivery retention of the container is for the government’s account, regardless of fault. We suggest that the words “Government caused” be removed from that section, and that a new sentence as follows be inserted after the amended sentence: “Free time shall run during any predelivery delay caused by the Government.”

Answer 26: USTRANSCOM determined this is the best manner to meet the Government’s requirements and the current PWS Section 6.C.2 language will remain unchanged.

Question 27: Section A.2.4.3: This section authorizes payments to the Contractor in accordance with business rules. Please identify where the business rules are published and state whether they are a part of the contract.

Answer 27: Business rules are posted on the SDDC website. The business rules are a guide for use in conjunction with this contract, but will not be incorporated into the contract. Business rules are subject to review and subsequent changes. See http://www.sddc.army.mil/sddc/Content/Pub/36791/Attach%202%20PowerTrack%20.pdf Question 28: Section B.2.5, Attachment 6 page 4, Port Storage Invoices: The requirement of a “paid bill” is ambiguous. If the requirement is for a copy of the invoice against which the Contractor paid, the requirement is reasonable. If the requirement is for an invoice that has been marked as “paid” by the entity providing storage, the requirement is impractical or impossible at some ports. A copy of the bill with a Contractor certification that the costs were incurred is all that is or should be required. With respect to the requirement for a “certified statement documenting government direction to stage the cargo,” the requirement is unreasonable. Staging is often constructive (such as from a failure of the government to complete customs procedures to allow on-carriage), and DoD field personnel in any event do not routinely issue “certified” staging requests (whatever that means in this context). Requiring such documentation is tantamount to refusing payment for services for which fundamental fairness and the contract require the Contractor to be compensated.

Answer 28: Section B.2.5 of Attachment 6 has been revised as follows:

B.2.5 Invoices submitted for port storage will contain the following additional information:

· Outgate Date from Port

· Copies of the applicable port tariff in effect at the time charges were incurred.

· A copy of the invoice for charges associated with port storage charges (if applicable).

· Documentation verifying government direction to stage the cargo (if applicable).

· Other documentation verifying proof of costs incurred.

Question 29: Section B.2.7, Attachment 6 page 4: This provision states that: “Failure to provide required information for each container shall result in a rejection of the invoice.” It is unreasonable to reject an entire invoice (which may cover many containers) on the basis of a lack of complete information for a single container or a small number of containers. The sentence quoted above should be amended by adding the phrase “with respect to any such container lacking required information.”

Answer 29: Section B.2.7 of Attachment 6 has been revised as follows:

B.2.7 Failure to provide required information and appropriate documentation for a specific container shall result in a rejection of that portion of the invoice. Each invoice should include the following certification statement signed by an authorized contractor representative:

Question 30a: Section 1.2, Attachment 8, page 1: The descriptions of the items to be dealt with directly by the Prime Vendor and the Contractor end in both instances with “etc.” This is ambiguous. Please clarify what unnamed items, if any, fall within the “etc.” catch-all. If there are none, please so state.

Answer 30a: The current Attachment 8 language is being revised.

Question 30b: Section 1.2: The penultimate sentence states that “some Prime Vendor contracts require the Prime Vendor and a USC Contractor to address/resolve such matters directly with each other.” Please identify those contracts. Is it anticipated that all Prime Vendor contracts entering into force on or after the effective date of USC-6 will contain such a clause?

Answer 30b: The current Attachment 8 language is being revised.

Question 30c: Section 1.2.2: This section lists four items with respect to which the Contractor is to look to the Prime Vendor for compensation: container detention, reefer maintenance, port storage, and services not ordered by the U.S. Government. Is this the complete list of services/cost items with respect to which the government refuses to accept responsibility? If not, please name any others. Please also define “services not ordered by the U.S. Government” and describe how the contractor will determine if those services were not ordered by the Government.

Answer 30c: The current Attachment 8 language is being revised.

Question 30d: Section 1.2.3: This section makes reference to section “1.2B.” No such section exists.

Answer 30d:The current Attachment 8 language is being revised.

Question 30e: Section 1.3, Third Party Agreement: This provision states that the Prime Vendor must contact “one or more” carriers that provide service on the routes on which the Prime Vendor moves cargo. Under what authority does the Department of Defense remove the Prime Vendor portion of the contract from the Competition in Contracting Act by allowing a Prime Vendor to convert this competitively bid contract into a sole source contract? By what means will the Department of Defense evaluate and police the Prime Vendor’s best value booking decisions? Do the provisions of PWS Section 5—Measuring Performance – apply to Prime Vendor cargo (either for performance evaluation purposes or booking decisions)? What are the Contractor’s remedies for Prime Vendor violations of best value booking procedures? All of these questions apply with equal force to section 1.3.1, which provides that a Contractor will enter into a written agreement “upon request by a DLA Prime Vendor"

Answer 30e: The current Attachment 8 language is being revised.

Question 30f: Section 1.3.1: This provision makes reference to sections 1.2.A and 1.2.B, neither of which exists. Please clarify.

Answer 30f: The current Attachment 8 language is being revised.

Question 30g: Section 1.3.1: This section states that the Contracting Officer may reject any written agreement between the Prime Vendor and the Contractor. At the same time, the paragraph states that no particular terms are required. What are the criteria that the Contracting Officer is to consider in making a determination of whether to reject an agreement? By what authority does the Department of Defense allow a Prime Vendor to exercise control over which Contractor carries the cargo by giving such prime Vendor the authority to veto any proposed agreement between the Prime Vendor and the Contractor?

Answer 30g: The current Attachment 8 language is being revised.

Question 30h: Section 1.3.2: The only difference between this section and section 1.3.1 is that a written agreement is not a hard prerequisite for participation in this cargo under 1.3.2. However, the existence or not of such an agreement is a best value factor under 1.3.2. Therefore, with that qualification, all questions in item c. immediately above apply with equal force to section 1.3.2.

Answer 30h:The current Attachment 8 language is being revised.

Question 30i: Section 1.4: This section makes reference to sections 1.2.A, 1.2.B, and 1.2.C, none of which exists. TCJA Answer 30i: The current Attachment 8 language is being revised.

Question 30j: Section 1.4: The section purports to remove disputes between the Prime Vendor and the Contractor from the Contract Disputes Act. 41 U.S.C. §602(a) provides that “this Act applies to any express or implied contract . . . entered into by an executive agency for . . .

the procurement of services.” By what authority does the Department of Defense purport to remove this portion of the contract from the CDA?

Answer 30j: The current Attachment 8 language is being revised.

Question 30k: Section 1.5, Third Party Beneficiary: This section broadly states that 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 . . . .” This contradicts section 1.2.1, which suggests that the Prime Vendor’s rights against the Contractor are limited to claims for cargo loss or damage. This ambiguity with respect to the scope of rights purportedly granted to the Prime Vendor must be clarified. Is it the intent that the Prime Vendor steps into the shoes of the government only with respect to items enumerated in section 1.2.1 (cargo loss and damage claims), or is the intent for the Prime Vendor to more broadly operate and act in the place of the government and Contracting Officer? By way of example only, and not by way of an exclusive list:

(i) May the Prime Vendor purchase containers on the same terms as the government?

(ii) Is the Contractor required to submit EDI messages to the Prime Vendor?

(iii) Will the Prime Vendor make bookings directly? If yes, what is the legal basis for delegating such authority to the Prime Vendor?

(iv) May the Prime Vendor dictate a port to which the vessel shall be diverted under the

Scope of Voyage (Liberties) clause?

(v) Will accessorials be applicable to the extent electronic transmissions are required for Prime Vendors?

Answer 30k: The current Attachment 8 language is being revised.

Question 30l: Section 1.5: The section describes language in the “DLA Prime Vendor contract” that makes the USC Contractor the express beneficiary of the Prime Vendor’s contract with

DLA. Please provide the text of the described language. If such language is not in existence at this time, please so state.

Answer 30l: The current Attachment 8 language is being revised.

Question 30m: If a Contractor chooses not to submit rates for Prime Vendor cargo, will that choice affect the Contractor’s selection to carry non-Prime Vendor cargo?

Answer 30m: Please see Exhibit 2, Ordering Procedures.

Question 30n: By what authority does the Department of Defense purport to require or coerce third parties to contract with one another?

Answer 30n: The current Attachment 8 language is being revised.

Question 31: Page 11, Rate Rules Section 1.2.7 Vessel Demurrage: Contractor shall be compensated for berthing delays caused by the U.S. Government based on demurrage rates (per vessel day) in the Schedule of Rates Table 6C. Charges are prorate for the actual period of delay. Is the above always determined by when the Vessel arrives at the POD, or can the U.S. Government impose an earliest arrival date upon the carrier at the Port of Discharge which would supersede the above?

Answer 31: The contractor is only entitled to compensation if there is a delay to the vessel's follow-on schedule.

Question 32: Page 30 of 60 – Section 3.I.6.7.1 - …When such services are performed by the crew in accordance with 3.I.6.8…Is this a typo which should read when services are performed by the crew in accordance with Section 3.I.6.7 , instead of Section 3.I.6.8?

Answer 32: Yes, it is a typo. The clause has been revised.

Question 33: Page 32 of 60 – Section 3.K.1.2.1 (Flatbed and double drop service) – Contractor’s loading and securing of cargo on conveyance at POD and removal from conveyance at POE is included in liner term rates for breakbulk. Securing of cargo on conveyance at the POD is not included in liner term rates for breakbulk. The securing costs are to be included in the Contractor’s inland rate.

Answer 33: PWS will be revised as below to remove reference to securing cargo as part of liner terms and clarify that costs for securing cargo onto conveyance is included in contractors rates for flatbed and doubledrop service. 3.K.1.2.1 is revised as follows:

3.K.1.2.1 Contractor loading of cargo on conveyance at POD and removal from conveyance at POE is in liner terms rates for breakbulk. Costs for securing cargo onto conveyance is included in contractors inland rates for flatbed and doubledrop service.

Question 34: Page 5 of 62, Rate Rules Section 1.1.1. - There is no mention of reefer differential in the RFP. Government and Contractors agreed to a 25% reefer differential formula.

Answer 34: There is no longer a reefer differential formula Requirements for reefers for which there is no established rate will be sent out for quote using the OTO process.

Question 35: Page 12 of 62, Bunker Adjustment Factor (BAF) Section 2.2 – The RFP resets the baseline at 4 weeks prior to the issuance of the RFP. This time frame was at the height of oil prices and it is anticipated that the Contractors will be paying the Government at the start of the new contract. In addition the Government also changed the trigger mechanism from 20% to 10% which exacerbates the problems for the Contractor. Maersk does not support the resetting of the baseline and believe it is in the best interest of both parties to maintain the trigger mechanism from USC-05 at 20%.

Answer 35: The trigger for application of BAF has been changed to 20%.

Question 36: Page 12 of 62, Bunker Adjustment Factor (BAF) Section 2.2 – The Government is required to provide the Contractors with the baseline prior to the submission of the proposals. Cannot locate in the current RFP.

Answer 36: The baseline fuel price language has been changed to the following:

Rate Rules, 2.2 Baseline Fuel Price

The BAF baseline fuel price will be calculated using the average price for the three (3) calendar months prior to the month in which the solicitation is issued. (Block 6 of SF1449 shows the issue date of the RFP,) Should the Government exercise an option to extend the contract, the BAF baseline fuel price will be calculated using the average price for the three (3) calendar months preceding the month in which the pricing due date falls for that option period. Prior to exercising the option, however, the Government reserves the right to select a different time period for calculating the option period BAF baseline.

Baseline Price will be $689.54 (Los Angeles) and $673.18 (Norfolk).

Question 37: Page 14 of 62, Section 2.7, BAF – The RFP states that BAF will only apply to listed routes. TRANSCOM previously agreed to allow Contractors to refresh non-BAF routes after six months if BAF payments are triggered on BAF-routes, but no such language is included in the RFP. Please confirm that non-BAF routes will be subject to refresh after six months.

Answer 37: Due to the procurement laws governing firm-fixed priced contracts, the Government cannot allow rates to be refreshed based on fluctuating commodity prices (this can only be accomplished through Economic Price Adjustment provisions). We considered making the non-BAF routes 6-month options. However, due to CARE system constraints, we cannot construct a portion of the rates as a 6-month option.

Question 38: Page 14 of 62, Section 2.7, BAF – Explain the timing of how the Contracting Officer would “unilaterally incorporate the new BAF methodology” into the contract Answer 38:

The new methodology will be unilaterally incorporated into the contract. However, it will not be effective until the option year (if the contracting officer executes the option year). Since the option years are “unpriced” they are done through a bilateral modification. Therefore, contractors will be able to consider the new methodology prior to submitting pricing and agreeing to the option year modification.

Question 39: Page 31 of 62, FAR 52.216-19 To avoid any ambiguity, we request that TRANSCOM revise (b)(1) and (2) by replacing the language “10 % of vessel capacity per voyage” with “the space commitment requirements set forth in Section 3.A.6 of the PWS.”

Answer 39: Clause language has been modified to mirror language in PWS Section 3.A.6

Question 40: Page 33 of 62, FAR 52.247-17, the requirement to include FAR 52.247-17 in contracts is set forth at FAR 47.207-6(a)(2). However, Subpart 47.2 does not apply to international ocean carriers per FAR 47.200(a)(2)(ii). Accordingly, FAR 52.247-17 should be deleted from the RFP because it does not apply.

Answer 40: Clause has been removed Question 41: Page 34 of 62, Clause 1.1, During the IPT, TRANSCOM indicated that this CENTCOM clause would not apply to truckers. It is impractical if not impossible for a Contractor to require its trucking subcontractors to: (a) utilize employment contracts written in English; (b) provide living conditions for host nation truckers; and (c) provide QA checks of life support areas. Please confirm that Sections 1.1.2, 1.1.4, and 1.1.5 does not apply to subcontracted truckers and incorporate appropriate contract language.

Answer 41: The CENTCOM clauses included in the solicitation are applicable when performance is required in Iraq or Afghanistan. No relief was given for any of the other CENTCOM clauses included in the USC-6 solicitation with the exception of the following:

"DFARS DEVIATION 2007-O0010 CONTRACTOR PERSONNEL IN THE UNITED STATES CENTRAL COMMAND AREA OF RESPONSIBILITY" which only applies to individuals performing in theater for 30 days or more per contract action (i.e. task order or booking). Since each individual booking is a single contract action and each contract action is completed in less than 30 days, DFARS Dev 2007-O0010 does not apply.

Question 42: Pages 38, CENTCOM Clauses, Section 2.3- AI 52.6 Arming Requirements and Procedures for Private Security Company (PSC) Contracts, Personal Security Detachment (PSD) Contract, and for Requests for Personal Protection in Iraq and Afghanistan; Is this clause referring to personal security for individuals or does this apply to cargo moving in convoys?

Answer 42: Both Question 43: Pages 45-46 of 62,Section 2.1, 2.2, UNCITRAL – Explain the timing of how the Contracting Officer would unilaterally incorporate the UNICITRAL convention into the contract.

Answer 43: The reference to unilateral changes in this clause has been removed.

Question 44: Pages 50-51 of 62, Sections 6.2 and 6.3 should be revised to read “Such cost shall be reasonable, supported by appropriate documentation, and subject to audit” since not all costs are necessarily the subject of an invoice.

Answer 44: Section 6.2 and 6.3 have been revised.

Question 45: Page 54, Current RFP does not distinguish between designated and non designated routes as in USC-05.