USC-6 Exhibit 2 - Carrier Selection Procedures.doc

HTC711-08-R-0011

Exibit 2

CARRIER SELECTION PROCEDURES

“FAIR OPPORTUNITY PROCESS”

A. Fair Opportunity to Compete.

1. Fair Opportunity To Compete and Task Order (booking) Awards: Under the USC-6 multiple award contracts, fair opportunity for bookings is either provided through the automated carrier selection logic in the Integrated Booking System (IBS) or by the decision process used by Ordering Officers.

a. The automated process selects the lowest cost routing of the highest VISA priority able to deliver the cargo by the RDD. The shipper specifies both when cargo is available at origin for movement and when it is required to be delivered at destination. IBS uses carrier provided schedules and awarded rates to determine VISA priority, schedule feasibility and cost for all contractors. Any authorized DOD user is permitted to input their agency’s shipping requirements into IBS. Users are not required to be ordering officers.

b. Shipper select. This method is limited to shippers who are ordering officers and can be used in both IBS and Direct Booking systems.In either case the ordering officer is responsible to perform a best value evaluation that considers all competitors.

i. IBS. Instead of releasing a shipping requirement to the automated process for IBS logic to select the carrier, (a above) an ordering officer may instead choose to select the carrier or other specific elements such as voyage or ports that may effectively select one carrier and the IBS automated process will execute the ordering officer’s request unless IBS finds there is a higher VISA priority routing possible.or that the request does not allow delivery by the RDD.

ii. Direct booking. The ordering officer enters the requirement directly into the carrier’s website. An IBS module receives shipment documentation from shipper and validates that there are rates for all elements of the shipment. Carriers are not supposed to include foreign flag routings on their website for use by direct bookers. Direct booking is limited to container shipments only

c. Cargo Booking Offices. The cargo bookers at SDDC cargo booking offices worldwide are ordering officers. Ordering officers are responsible for evaluating shipment requirements that were not completed by the automated process and must select the lowest cost routing of the highest VISA priority able to deliver the shipemt by the RDD. Bookers may consider shipper requests for a specific carrier, ports or voyage.

2. Ordering Clause: IAW FAR 16.505, Ordering, all multiple award contractors shall be provided a fair opportunity to be considered for each order in excess of $3,000 pursuant to the procedures established in this section, unless the contracting officer (or ordering officer / booker) determines that:

a. The agency’s need for the services or supplies is of such urgency that providing such opportunity to all such contractors would result in unacceptable delays.

b. Only one such contractor is capable of providing the services or supplies at the level of quality required because the services or supplies ordered are unique or highly specialized.

c. The task/delivery order should be issued on a sole source basis in the interest of economy or efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity pursuant to the procedures in this clause to be considered for the original order.

d. It is necessary to place an order to satisfy a minimum guarantee.

B. Automated Offering of Cargo to the Ocean Carrier:

1. It is mandatory that all ocean carriers providing service under the SDDC ocean contracts use the prescribed Electronic Data Interchange (EDI) transaction sets to allow for the electronic exchange of booking data. The Integrated Booking System (IBS) has the capability to pass and receive transaction sets to/from carriers. Carriers are required to respond to offers within 24 hours. When the carrier fails to respond, the booker/Ordering Officer will ascertain if the carrier is experiencing technical problems. If so, the booker will coordinate corrective action with the carrier’s technical staff and the IBS Project Management Office (PMO). If the problem is not technical in nature, but simply a failure on behalf of the carrier to respond, the booker will cancel the offer, select another carrier and re-offer the cargo. Carriers may accept, reject or counter-offer requirements. Rejections and counter offers are sent to the Ordering Officer for further processing.

2. IBS is the principal management information system that supports both the cargo booking process and cargo management. The system provides the capability of automatically processing container movement requirements received from requestors. It identifies and selects the cost-effective or best value carrier and routing to meet delivery requirements. The system includes rates and schedules for all ocean carriers participating in USC-6. When rates and schedules are available in the system that can meet delivery requirements, the system will select the carrier and routing, and pass the requirement to the ocean carrier for booking (see paragraph E for the system logic diagram). When booking cargo utilizing the Universal Service Contract (s), if the shipment delivery requirements cannot be met due to the system not containing a vessel schedule to accommodate the required delivery date (RDD), IBS will present to the requestor the sailings it does contain that are scheduled to arrive at the POD on a date closest to the RDD. Based on the vessel selected by the requestor, IBS will assign the offering an RDD. When the carrier provides a booking, the system will automatically issue an Export Traffic Release (ETR) to the requestor/shipper, which is the approval or clearance to move the cargo in the DTS. Breakbulk requests are assisted bookings handled through the exception rate process.

C. Voluntary Intermodal Sealift Agreement (VISA) Priorities

1. All bookings (both automated and “shipper select”) will be awarded in accordance with the Cargo Preference Act of 1904, with a preference given to VISA participants. Application of the “VISA Priorities” listed below for booking cargo ensures these requirements are met. SDDC will provide an updated list of VISA participants to designated Ordeing Officers as changes to the list occur. The following is the prioritized order for booking cargo shipments (breakbulk and containers) in the DTS.

a. U.S. flag vessel capacity operated by a VISA "Participant" that has made a current, minimum commitment of its U.S. flag vessel capacity to Stages I, II and III of VISA or that has made a current, minimum commitment of its Jones Act capacity (capacity exclusively engaged in the domestic trades) to Stage III of VISA and a current, minimum commitment of the remainder of its U.S. flag vessel capacity to Stages I, II and III or, VISA or with regard to an offer for a long-term charter to DoD that has made a current, minimum commitment of its U.S. flag vessel capacity to Stage III of VISA. The U.S. Flag Vessel Sharing Agreement (VSA) capacity of such a participant also is grouped in this category of priority.

b. U.S. flag vessel capacity operated by a VISA "Participant" that has made a current, minimum commitment of its U.S. Flag vessel capacity to Stage III of VISA and the U.S. flag Vessel Sharing Agreement (VSA) capacity of such a Participant.

c. U.S. flag vessel capacity operated by a non-Participant.

d. Combination U.S./foreign flag vessel capacity operated by the kind of "Participant" described in paragraph a above and/or the combination U.S./foreign flag VSA capacity of such a Participant.

e. Combination U.S./foreign flag vessel capacity operated by the kind of "Participant" described in paragraph b above and/or the combination U.S./foreign flag VSA capacity of such a Participant.

f. Combination U.S./foreign flag vessel capacity operated by a non-participant.

g. U.S. owned or operated foreign flag vessel capacity and/or VSA capacity of the kind of "Participant" described in paragraph a above.

h. U.S. owned or operated foreign flag vessel capacity and/or VSA capacity of the kind of "Participant" described in paragraph b above.

i. U.S. owned or operated foreign flag vessel capacity and/or VSA capacity of a non-Participant.

j. Foreign-owned or operated foreign flag vessel capacity of a non-participant.

2. If a particular shipment's requirements cannot be met by any of the booking priority categories above, then SDDC shall have the right to solicit additional service under commercial tariffs using Government Bills of Lading (GBLs) or another Federal Acquisition Regulation (FAR) contract utilizing all sources of common carriage.

D. “Shipper-Select” Best Value (BV) Bookings

1. The Universal Service Contract (USC)-6 allows for cargo bookings based on best value under the “shipper select” concept. Once the minimums have been met, and if the automated IBS function is not utilized, the Ordering Officer must make a Best Value determination through the use of a trade-off analysis.

2. The trade-off analysis will consider the following factors and sub-factors:

a. VISA Priorities

b. Technical

(i) Can meet RDD or is the “Next Arriving Vessel” (at Point of Debarkation)

(ii) Can provide all required accessorials

(iii) Has required equipment

c. Past Performance

(i) Carriers’ Performance Score from the Assessement at Section 5 of the PWS

(ii) History of meeting RDD for the required route

d. Cost

(i) Total prices of all the services (linehaul, ocean freight and accessorials) applicable to the booking.

E. IBS Logic Diagram