Azores PWS 30 Jun 08.doc

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PERFORMANCE WORK STATEMENT – AMENDMENT 0001

TABLE OF CONTENTS

Section No. Section Topic 1.0

INTRODUCTION/BACKGROUND

2.0

SCOPE

2.1

Transportation Services 2.1.1

Basic Service

2.1.2

MileageRates

2.2

General Scope

2.3

Cargo

2.4

Cargo Volume 2.5

Limitations of Carrier’s Obligation 2.5.1

Cargo Rejection

2.5.2

Unsafe Operation

2.6

Period of Performance 2.7

Hazardous Cargo

2.7.1

Hazardous Waste Material 3.0

PWS and DESCRIPTION OF SERVICES 3.1

Performance Requirement Summary Table 3.2

Service Frequency 3.3

Transit Time

3.4

Vessel Schedule 3.5

Vessel Daily Position Reports 3.6

Electronic Commerce/EDI 3.7

Electronic Data Interchange (EDI)

3.8

Operational Shortfalls

3.9

Seal Breakage

3.10

Required Delivery Date (RDD)

3.11

Cargo Lifted as Booked

3.12

Submission of Operational

3.13

Equipment

3.13.1

Reefer Equipment

3.13.1.1

Controlled Atmosphere

3.13.1.2

Chilled

3.13.2

Carrier Inspection of Contents

3.14

Hazardous Material Containers

3.15

Detention Invoices

3.16

Payment (PowerTrack)

3.17

Quality Council Meetings

4.0

CONTRACT ADMINISTRATION

4.1

Contracting Officer 4.2

Shipping Orders/Delivery Orders

4.3

Container Size Ordered/Provided

4.4

Application of Rates

4.5

Exceptions to General Application of Rates 4.6

Refunds, Rebates And Credits

4.7

Agreed Cost Responsibility

4.7.1

General 4.7.2

Responsibility of the Carrier

4.7.3

Responsibility of the Government

5.0

SPECIAL CONTRACT REQUIREMENTS

5.1

References to “Master” or “Crew”

5.2

Limitation Of Government Liability

5.2.1

Dead Freight

5.2.2

Required Delivery Dates

5.3

Excepted Category Cargo

5.4

Government Obligation

5.4.1

Commitment of Cargo

5.5

Limitations Of Carrier's Obligation

5.5.1

Explosives

5.6

Improper Documentation

5.7

Failure To Spot

5.7.1

Remedies

5.7.2

Liquidated Damages

5.7.3

Alternate Transportation

5.7.4

Government Responsibility for Failure

5.8

Delay In Spotting

5.9

Overweight Containers

5.9.1

Notification

5.9.2

Cost Liabilities

5.9.3

Carriage of Overweight Containers

5.10

Government Failure To Timely Release Containers

5.10.1

Occurrence

5.10.2

Load on the Next Vessel

5.10.3

Un-stuff the Container

5.11

Carrier Failure To Load Containers

5.11.1

5.11.2

5.11.3

Move to Another Shipping Place

5.11.4

Return the Cargo

5.12

No Fault Failure To Meet Sailing

5.12.1

5.12.2

5.12.3

5.12.4

5.13

Delay Of Scheduled Sailing

5.13.1

5.13.2

Container Release

5.13.3

5.13.4

5.14

Storage Charges

5.15

Commencement And Time Standard Of Delivery Transportation

5.16

Transshipment Or Relay

5.16.1

Policy

5.16.2

Foreign Flag Vessels

5.16.3

Notification of Arrival

5.17

Diversion For The Convenience Of The Government

5.18

Transfer Of Containerized Cargo

5.19

Government Drayage/Line-Haul 5.20

Time

5.20.1

Free Time Allowed

5.20.2

Commencement of Free Time

5.20.3

Running of Time 5.20.4

No Running of Time

5.20.5

Cessation of Time

5.21

Detention

5.21.1

Incurrence

5.21.2

Computation of Detention

5.21.3

Refrigerated Containers

5.21.4

5.22

Use Of Government Terminals

5.22.1

Services

5.22.2

Stevedoring

5.23

Shifting Docks 5.24

Custom Of The Trade 5.25

Security 5.26

Safety In Loading And Discharging Of Cargo

5.27

Substitution

6.0

Special Contract Provisions 6.1

Regulatory Compliance

6.2

Bunker Adjustment Factor (BAF)

7.0

Maritime Clause 7.1

Application of COGSA

7.2

Scope of Voyage (Liberties)

7.3

Force Majeure

7.4

Strikes

7.4.1

Loading Port

7.4.2

Discharge Port

7.5

Amended Jason Clause

7.6

General Average

7.7

Liens

7.7.1

Seizure of Cargo

7.7.2

Freight

8.0

War Risk 8.1

Compensation

8.2

Limitation of Government Liability

9.0

Damage to Equipment 9.1

Damage to Carrier Vessel or Vessel Equipment

9.2

Damage to Government Equipment

9.3

Lost Carrier equipment

10.0

Shipments by Authorized Agents of the Government 10.1

Parties to the contract

10.2

Booking of cargo

10.2.1

Shipping/Delivery Order

10.2.2

Carrier Load Port 10.2.3

Carrier Discharge Port 10.2.4

Payment

10.2.5

11.0

Definitions/Abbreviations

11.1

Definitions

11.2

Abbreviations

1.0 INTRODUCTION/BACKGROUND

1.1 Streamlined, Performance-Based Processes

The processes involved in soliciting, evaluating, awarding and administering contracts for Intermodal Sealift has been streamlined. The process maintains a competitive environment, while considering the needs of both customers and suppliers, focuses on reducing costs and implementing performance-based contracts.

2.0 SCOPE

2.1 Transportation Services

2.1.1 Basic Service

The Contractor, a vessel operating ocean Carrier, shall provide transportation of lawful cargo by U.S. flag ships between points in the Continental United States of America (CONUS) as specified in CARE-SM II System and the commercial terminal in Port of Praia, Azores. The Carrier shall maintain regularly scheduled liner term service on this route throughout the period of the Contract. A self-sustaining vessel(s) is required due to the unreliability of the crane at the commercial port, and the lack of dock space to maintain a floating crane at the Port of Praia.

The services being procured by this contract provide the primary logistical support for the American Forces stationed in the Azores and the sole means of surface transportation between the U.S. and the Azores. The Carrier will transport over 90% of all supplies used at the base, including food, other necessities, and amenities providing quality of life. Reliability of service in all weather conditions is paramount. Sea State 4 or higher is frequent on the annual schedule. Maintenance of the schedule has allowed the Air Base to move to a just-in-time delivery system, resulting in significant savings, including being able to eliminate the requirement to maintain redundant/spare equipment.

The Government seeks a teamwork relationship with the Carrier that will minimize the government’s overall exposure to costs and risk associated with this transport, including both Carrier and non-carrier related costs and time element problems. Reliability of the schedule is paramount in shortening the supply chain and in minimizing exposure to re-acquisition costs.

The Carrier shall provide both break-bulk and intermodal container service, including terminal handling, all stevedoring, loading and discharging in CONUS. At Port of Praia the designated U.S. Government contractor shall provide all port handling and stevedoring unless the Government directs the Carrier to implement such services. The frequency of service shall be a vessel call at Azores at intervals not to exceed twenty-five (25) days between deliveries. Actual cargo transit time shall not exceed eleven (11) days from the last loading port in CONUS to Port of Praia and eleven (11) days from Port of Praia to the first discharge port in CONUS. For inbound cargo, inland cargo delivery transit after port clearance (commencement of delivery) shall not exceed one day for every 300 miles of the shortest road distance from the port of discharge. For outbound cargo, if inland cargo delivery is required by the Government, transit after commencement of delivery shall not exceed three (3) days by the shortest road distance from the port of discharge. The Carrier shall carry any and all cargoes offered by the Government up to the capacity of the vessels offered for use in this trade, with the exception of those limitations of the Carrier’s obligations specified in Section 2.5. The minimum space available to the Government for each outbound (CONUS to Azores) or inbound (Azores to CONUS) sailing shall be no less than 59 – 40’ containers, of which 20 spaces must be capable of accepting 40’ refrigerated containers; and 2000 square feet of protected break-bulk/vehicle stowage. Each of the 40’ spaces offered must be able to accommodate 2 – 20’ containers or the vessel(s) must have additional space to accommodate the 20’ container shortfall.

2.1.2 Mileage Rates

In the absence of specific linehaul rates between points within CONUS, inland charges are computed using mileage band rates, multiplied by the mileage found in the Defense Table of Official Distances (DTOD). Mileage rates are stated as one-way mile rates and are only used where no specific point/port rate exists. Mileage rates are designated as a stopgap measure to enable continued uninterrupted cargo flow. Mileage rates are valid for any continental US city location not specifically designated and is conditioned on its application. See Attachment 1 for a definition of city groups and zones that are part of this contract.

2.2 General Scope

The general scope of services under this RFP includes:

Ocean Transportation

Related Intermodal movements and services

Management Expertise

2.3 Cargo

Types

Types of cargo to be carried are military cargo, mail, and any other cargo shipped by the Department of Defense (DoD) in the Defense Transportation System (DTS). All cargo shall be stowed in accordance with commercial shipping practices to prevent damage due to exposure to the elements.

Carriage

Cargo shall be loaded and discharged at commercial ports in CONUS and at the commercial terminal in the Azores. The Carrier shall furnish all containers/chassis in CONUS and Azores when required. Containers with mail and personal property stowed on deck shall, to the maximum extent possible, be loaded on the bottom tier if consistent with vessel safety.

2.4 Cargo Volume

2.4.1 For the period of performance 1 Aug 08 through 28 Feb 09, the Government intends to ship a minimum of 514 FEUs for 9 sailings. Cargo FEU is calculated as follows:

Container 40’ or larger

1.0 FEU

Container under 40’

0.5 FEU

Vehicles paid by Mton

1.0 FEU per 21 Mtons

Other cargo paid by Mton

1.0 FEU per 41 Mtons

2.5 Limitations of Carrier's Obligation

2.5.1 Cargo Rejection

Notwithstanding any other provisions of this contract, the carrier shall have the right to reject any species of live animals and other cargo deemed by the Carrier to be dangerous or obnoxious in character. Any such cargo accepted for carriage shall be freighted at the General Cargo rate.

2.5.2 Unsafe Operation

The Carrier shall not be required to receive or deliver containers at points or places where it is impracticable or unsafe to operate tractors and chassis due to conditions of roads, streets, or alleys or when prevented from doing so because of fire, acts of God, acts of war, riots, civil commotion, strikes, lockouts, stoppages or restraints of labor or other labor disturbances.

2.6 Period Of Performance

This contract shall be in effect for all cargo received by the carrier or its agent for voyages on or after 01 Aug 08, and shall remain in force for all cargo received by the Carrier or its agent for all voyages scheduled on or before 28 Feb 09. The first sailing (CONUS to Azores) shall commence no later than 10 Aug 08.

2.7 Hazardous Cargo

Upon request, the carrier shall transport hazardous cargo subject to Title 49 of the Code of Federal Regulations, Part 171, et seq. (49 CFR) in force at the time of shipment. The Carrier shall refuse to transport hazardous cargo, either by land or by ocean, which does not conform in all aspects to these regulations and any other applicable U.S. governmental regulations. When the Carrier refuses to pick up a container based on non-compliance with appropriate regulations as stated herein, the Government shall reimburse the Carrier the actual line-haul/drayage charge for such container if the Carrier has made a futile trip in connection with such circumstances as a result of Government failure to comply with applicable hazardous cargo regulations.

2.7.1 Hazardous Waste Material

When transporting hazardous waste material, the carrier shall obtain an Environmental Protection Agency identification number (40 C.F.R.263.11). Carrier should accept only those hazardous wastes that have been manifested in accordance with 40 C.F.R. 262.20 and 262.20(b). The manifest shall stay with the shipment to its destination. 40 C.F.R 263.20 (c). Carrier shall deliver the waste to the designated TSD facility on the manifest or to its designated alternate facility in case of an emergency. 40 C.F.R. 263.21(a) and (b).

a. Spill Reporting - In the event of an accidental discharge of the hazardous material during transporting the carrier is required to take immediate action to protect human health and the environment as defined in 49 C.F.R. 171.15 and shall be reported orally and in writing to the National Response Center, Office of Hazardous Material Regulations Department of Transportation, Washington, DC 20590. See 33 CFR 153.203, 40 C.F.R. 263.31, State and local laws may require additional notifications. Carrier is liable for spills and discharges of cargo while being transported and is responsible for the cleanup. 40 C.F.R. 263.30 and 31.

b. Storage - Carrier may store material enroute up to ten (10) days at each transfer facility as defined by 40 C.F.R. 260.10, 263.12 and 268.50 (a) (3) without becoming a TSD facility. If storage exceeds the ten days at any transfer facility, then the carrier shall issue a new manifest and sign and return to the initial shipper its original manifest. Carriers transporting hazardous waste material into the United States from abroad or who mix hazardous wastes of different DOT shipping descriptions into the same container shall also meet the standards applicable to hazardous wastes shippers.

3.0 PERFORMANCE WORK STATEMENT AND DESCRIPTION OF SERVICES

Performance Requirements in this document are expressed in the following manner:

Each performance requirement may contain the following three elements. In each case, when taken together, these elements constitute a performance requirement.

· Performance Objective – The desired outcome or result expected of the contractor (not output!)

· Performance Measures – The critical characteristics or aspects of achieving the objective that will be monitored by the Government, those things that the Government will analyze. Each objective may have one or more measures.

· Performance Standards – The targeted level or range of levels of performance measured.

3.1 Performance Requirement Summary (PRS) Table: Critical Performance Objectives

Not every performance objective in this contract has a related performance measure or performance standard. However, every performance objective is a contractual requirement. For those performance objectives that do not specify a measure or standard the measures and standards are IAW standard commercial practices, i.e., substantial compliance with local customary trade practice. Performance measures/standards, where specified, may be used to achieve a variety of goals, including collection of data to test the practicality of a performance standard; identification of a performance standard of less than 100% compliance; emphasis on most critical performance objectives; collection of data to support quality assurance and contractual remedies (including evaluation of past performance, discussion at Quality Council meetings etc.) and similar goals.

Transportation and Basic Services Performance Objectives

The Carrier’s shall maintain a regularly scheduled and consistent commercial liner term service on this route throughout the period of the contract via a self-sustaining vessel(s) per schedule as specified in Integrated Booking System.

3.2 Service Frequency

Performance Objective No.1 - The Carrier shall maintain a regularly scheduled and consistent commercial liner service conforming to the services required in the contract and offered in the Integrated Booking System (IBS) upon award. The carrier shall reserve vessel capacity as specified for the booking of Government Cargo on each vessel sailing from CONUS to Port of Praia, Azores. The Carrier’s vessel (s) must call at discharge and loading ports at intervals not to exceed twenty-five (25) days or COR approved variations. COR may approve variations due to holidays and weekends to minimize exposure to Azores transportation costs.

Performance Measures: Performance Standards:

Regular scheduled liner service 100%

3.3 Transit Time

Performance Objective No.2- The Carrier transit time shall not exceed 11 days from last CONUS port of loading to Port of Praia, Azores and 11 days from Port of Praia, Azores to the first discharge port in CONUS.

Performance Measures: Performance Standards:

COR review data for late departures/arrivals 100%

3.4 Vessel Schedule

The contractor shall provide an updated sailing and arriving schedule, including pier cut-off, of not less than five (5) sailings to SDDC via e-mail at least every 45 day through the life contract. The contractor must maintain and continually update vessel schedules within IBS or successor system. Any change to the projected schedule must be reported within seven (7) days of the next schedule port call. Schedule performance shall be based on schedule in effect (7) days prior to POE sail date. Any slippage in scheduled sailing date/arrival date by more than (1) day shall be reported in writing to the COR and entered into IBS.

3. 5 Vessel Daily Position Reports

When specifically requested by the COR or the Contracting Officer, the Carrier shall furnish the Government with the daily position of the vessel(s) serving this Contract

3.6 Electronic Commerce/Electronic Data Interchange (EDI)

Performance Objective No.3

3.6.1 Electronic Data Interchange: The contractor must use Electronic Data Interchange (EDI) or

Ocean Carrier Interface (OCI) (or successor system) as the primary means for interfacing with

SDDC for all CONUS and OCONUS bookings.

3.6.1a - Booking Transaction Sets

Where EDI is used, the contractor must receive or transmit, as appropriate, the following transactions sets:

Contractor receiving order data, 300 (Delivery order, the booking, including increases and decreases)

Cancellation data from OO/COR, 303 (OO/COR cancellation)

Contractor ordering confirmation data, 301 (Confirmation of order, contractor to OO/COR)

3.6.2. For those transportation and intermodal services provided by contractors to meet booking requirements, contractors must provide container or break-bulk shipment status reports using the 315 transaction sets in ANSI X-12 EDI standard or OCI to SDDC to enable the Government to track shipments and to support the MRM15 initiatives. Listed below are the reports which the Government requires all contractors to provide for all shipments. Contractor is not required to report events that are outside the scope of the booking.

returned empty to the contractor's terminal, the carrier will report an alternate event that shows that the detention/free time clock has stopped. Contractor will report this using codes approved by the Ocean ACI Committee.

Russian rail system. Reporting will be by email until reporting requirements are established and included in Transaction Set

Implementation Conventions and their controlling concepts of operations approved by Ocean ACI Committee.

*NOTES:

(1) Submitting 315 report within 12 hours of accomplishing the event is mandatory. The Government will work with the contractors to achieve reporting within four hours.

(2) For cargo that is booked free-in and is loaded by the Government, the contractor must report AE events within 12 hours of receiving load reports from the Government.

3.6.3 Changeover Supported by IBS.

The contractor must commence the use of EDI or OCI (or successor system) with booking offices not supported by IBS at the effective date of this contract, subject to the Government providing at least 90

Days’ notice of requirement to begin exchanging electronic information at such sites.

3.6.4 EDI Transaction Sets and Concepts of Operation

The contractor must use the Defense Transportation Electronic Data Interchange (DTEDI) approved. Implementation Convention for the ANSI X 12 300, 301, 303 and 315 transaction sets in compliance with their approved concepts of operations. Versions 3060, 4010 or later are required. The contractor will implement changes to business processes contained in revisions to Transaction Set Implementation Conventions and their controlling concepts of operations as may be approved by the Ocean ACI Committee. These changes must be implemented in accordance with schedules approved by the Ocean ACI Committee.

3.7 EDI

Performance Measures Performance Standards:

1. Provide accurate transaction set 315 97%

2. Submit 315 report within 12 hours of accomplishing the event 97%

3.8 Operational Shortfalls - The Carrier shall provide notice within 24 hours to both the Contracting Officer and the COR/QAE of any operational shortfalls that occur relative to the service, such as sailing delays, container unavailability, strikes, receiving delays, port backlogs and equipment failures, such as ship cranes, etc.

3.9 Seal Breakage - Carrier shall notify COR/AQE with complete report if a seal on any container has been broken and/or replaced while in the carrier’s custody.

3.10 Required Delivery Date (RDD) Performance Objective No 4 - Delivery is required by the required delivery date (RDD) specified in the accepted booking. The Government will ensure that realistic RDDs (confirmed with the carrier’s IBS vessel schedules) will be reflected in the booking, Performance Measure Performance Standards

RDD Met 97%

3.11 Cargo Lifted as Booked Performance Objective No 5 - Unless directed otherwise by the Government; the contractor must lift cargo onto the vessel identified in the booking.

Performance Measure Performance Standards

Lift as booked excludes cargo not released 97% by the Government in time to meet booked sailings excludes cargo delayed by the Government

3.12 Submission of Operational

Until EDI transaction submissions can fully provide this data, the contractor must provide the cognizant SDDC activity and the military activity responsible for cargo documentation at each port where Government cargo is lifted and/or discharged certain information in connection with cargo at the port. The contractor must submit as much of the data that is available within the timeframe of submission.

3.12.1 Receipt

Contractor Name

Port of loading

Date cargo received at port

Transportation Control Number (TCN)

Container number with alpha prefix

Seal and / or keyless lock number

3.12.2 Lift (Container)

Cargo Lift Information (CONUS/OCONUS ports of loading):

PCFN/Carrier Booking number

Name of vessel and voyage document number

Port of Embarkation

Port of discharge

Final destination

Note: If a seal on any container has been broken and/or replaced while in the Contractor’s custody, the contractor shall notify the COR and designated Government representative (e.g. QAE) at the port with a complete report as to the circumstances and the reasons there of.

3.12.3 Lift (Break-bulk)

Contractor Name and SCAC code

Cargo Lift Information (CONUS/OCONUS ports of loading):

PCFN/Carrier Booking number

Name of vessel and voyage document number

Piece, Weight and cube

Commodity code

Port of Embarkation

Port of discharge

Final destination

General description of cargo contents; i.e., General cargo, mail/mail equipment, privately-owned vehicles (POVs), other unboxed wheeled or tracked vehicles, refrigerated cargo

Seal and /or keyless lock number.

3.12.4. Pre-Arrival Notice: The carrier shall provide a cargo list (via email) including:

TCN

Consignee DODAAC

Container number with alpha prefix estimated date and time of vessel arrival and any Variation from information previously furnished

Vessel name and voyage

POD

PCFN/Carrier booking number

Voydoc

Seal number

Date cargo is to arrive

Name and voyage number of Mother Vessel if transshipped

3.12.5 Discharge: Cargo discharge information must indicate the following for each shipment/TCN

Container number with prefix

Name and voyage number of vessel making delivery

Name and voyage number of original vessel(s) if transshipped

Date and time the cargo was discharged from the vessel Date and time, cargo is scheduled to be available for commencement of drayage or line-haul from port.

Seal and /or keyless lock number

3.12.6 Disposition

Contractor name

Port

Date, time and mode of commencement of drayage or line-haul from discharge port

TCN

Container number and prefix

3.12.7 Contractor Containerization: When carrier provides container cargo handling service or LCL service, the contractor shall report cargo detail by container as follows:

Booked Container TCN

POE

Cargo TCN, pieces, weight, cube

Container number and prefix

Date stuffed

Consignee if for inland delivery by the contractor

Booking reference

Booked/scheduled vessel

Location stuffed

3.12.8 Cargo not lifted as booked and booked and not lifted

Contractor Name

POE

Vessel Name

Sail date

TCN

Container number with prefix

Reason cargo/container was not lifted as booked

3.12.9 Direct Booking Report

Contractor name

Vessel name

DTR Commodity code

SCAC code

Booked voydoc#

Estimated sail date

POE

Shipper DODAAC

Shipper POC

Consignee DODAACC

Equipment size and type

Estimated arrival date at POD

Date Booked

VISA priority

RDD

Report type (new booking or cancellation/decrease)

Performance Measures

Performance Standards

1. Receipt

Provided by next business day following receipt of cargo

100%

2. Cargo lift information

Provided NLT next working day after vessel departure from

CONUS/OCONUS port

100%

3. Pre-Arrival notice

Provided three days prior to the scheduled arrival of the delivering

Vessel or day after sail if less than three days sail time to POD

100%

4. Cargo discharge

Provided by next business day following discharge

5. Disposition

Provide by the next business day after cargo/containers depart the

Port

6. Cargo not lifted as booked and lifted but not booked

Provide next business day after vessel departs the POE

100%

7. Direct booking report

Provide within 24 hours of booking, cancellation, decrease or

Increase

3.13 Equipment

3.13.1 Reefer Equipment: The Carrier shall provide (if required) up to 20, 40 foot refrigerated containers per sailing to the stuffing activity. Temperature must be maintained within three (3) degrees Fahrenheit of the in-transit temperature specified for controlled atmosphere and straight, chill, and five (5) degrees Fahrenheit for frozen. Equipment shall be in good working condition throughout contract period. Refrigerated containers meet booking instructions, including pre-cooling to the prescribed temperatures. Internal Temperature shall be continuously measured using a Ryan type recorder or equivalent that is capable of measuring any one (1) degree Fahrenheit or more variation during transit. Receiving activities shall be provided a copy of the printed temperature record upon request.

3.13.1.1 Controlled Atmosphere: The Carrier shall provide controlled atmosphere service consisting of a self contained computerized system capable of monitoring and adjusting the atmosphere in a refrigerated container after the carrier has introduced preservative gasses in the container.

The system is designed to reduce spoilage and extend shelf life of perishable commodities similar to modified service, but differs by its ability to adjust the air inside the container during transit. Not normally used.

3.13.1.2 Chilled: For chilled cargo in refrigerated containers only, the intransit temperature specified in the booking for service shall be maintained by the Carrier at an interval temperature within plus or minus two (2) degrees Fahrenheit of the specified temperature from the time of initial stuffing until unstuffing at final destination providing that such variance does not allow cargo freezing.

3.13.2 Carrier Inspection of Contents

Upon receipt, the Carrier may open stuffed reefer containers to inspect the condition, stuffing, or the temperature of the cargo. When the Carrier is of the opinion that the cargo is unsuitable for shipment to the specified destination, the Carrier shall immediately advise the OO of such condition, and request a written decision regarding shipment of the container.

Electrical Systems – It is the sole responsibility and cost of the Carrier to maintain its refrigerated container equipment in good working order from time of spotting to time of delivery to consignee. Reefers shall arrive at spotting inspected and certified by the carrier as being capable of operating at 220 and 440 electrical volts.

3.14 Hazardous Material Containers

Carrier shall provide both 40ft and over and under 40ft empty containers at the Port of Praia for hazardous waste material required to be shipped inbound to CONUS.

The material may consist of, but is not limited to, antifreeze, soil, asbestos, corrosive liquid and solids, poly-chlorinated biphenyl (PCB)’s, regulated and non-regulated flammables, and oils and lubricants. The Carrier shall provide to designated Government and/or Government contractor personnel access to its port terminal facility to implement CONUS disposal operations.

The Carrier will be compensated for this service in accordance with the rates set forth in CARE-SM II System.

3.15 Detention Invoices

The Carrier shall submit detention invoices or vouchers to the COR no later than twenty-four (24) months from the date the empty container is returned to the Carrier.

3.16 Payment

3.16.1 PowerTrack. Payment of outbound containers will be paid in PowerTrack; all inbound, outbound break-bulk and excepted cargo shall be paid IAW paragraph 8.5.6.

3.16.2 Submission of Invoices. Invoices shall be submitted in accordance with the Standard Billing Instructions. The Carrier shall submit properly certified invoices or vouchers for outbound/inbound shipments, detention and other authorized charges to Military Surface Deployment and Distribution Command, HQ, SDDC, 709 Ward Drive, Bldg 1990, ATTN: SDDC-RMM-IT, RM 1W130-88, Mr. Bud Drew, Scott AFB, IL 62225. 618-220-5330. Invoices shall be submitted within six (6) months from date of shipment.

3.16.3 Determination of Delivery. Delivery of the stuffed container or break-bulk cargo, if inland delivery service required, at ultimate destination and accomplishment of the Shipping/Delivery Order may, for purposes of payment of freight, be established either by a copy of a receipt signed by the consignee or its agent or upon certification of delivery by the OO based on information available within the Government. For purposes of payment of freight, delivery of container/break-bulk cargo shall be deemed to occur upon placement of the stuffed container at ultimate destination or upon expiration of two working days after the Carrier tenders the stuffed container/break-bulk cargo for delivery at the ultimate destination whichever occurs earlier. The Carrier may notify the paying activity of the date and time of the container arrival at ultimate destination for determination of the two working day basis for payment of freight.

3.16.4 Withholding of Payment. If, after delivery of the cargo or container and unstuffing by the Government, there is any damage to or shortage of cargo not definitely known to be the fault of the Government or its agents, and it is considered by the Contracting Officer that withholding of certain monies is necessary to protect the interests of the Government pending final determination of the amount of shortage or damage and the Carrier's liability therefore, the dollar amount of such shortage or damage may be estimated and withheld from sums owing to the Carrier by the Government under any Shipping/Delivery Order. Likewise, the Government may recover overpayments of freight and may recover charges paid to the carrier for services and supplies.

3.16.5 Reimbursement. All charges and expenses incurred for the account of the Government as provided in this Contract and which are not paid directly by the Government or by the consignee shall be paid by the Carrier, which shall be reimbursed upon the presentation of properly supported invoices, including, but not limited to, Carrier's Interchange Receipt and COR certified invoices.

3.16.6 Payment. In accordance with the Prompt Payment Act, all payments earned on shipments will be made after (a) receipt of a proper invoice, in accordance with the procedures outlined above, or (b) evidence of delivery as described above, whichever occurred later. The failure of the Government to provide a proper manifest in a timely manner shall not preclude the Carrier from submitting a proper invoice upon delivery of cargo as set forth above.

3.16.7 Linehaul/Drayage - All inland rates are stated in dollars and cents per manifested container size regardless of type and are applicable for drayage or linehaul services furnished by the carrier in conjunction with basic services provided.

3.16.8 Electronic Payment – Carriers will be paid through Automated Fund Transfer (AFT) using the PowerTrack System, a product of US Bank, Inc. Payment will be made after cargo has been lifted. A satisfactory comparison of shipping instructions and Carrier lift reports will be the basis for approving payment to Carrier. Carrier shall have an agreement with US Bank and be PowerTrack certified for the electronic payment of transportation services See Attachment 1 PowerTrack Rules for details of Sealift Carrier Payment via PowerTrack). Carrier not yet authorized AFT must provide bank and account information necessary to implement AFT.

3.16.9 MRM-15 alternate payment procedures - During the term of this contract, the (POWERTRACK), shipping instruction (EDI 304), plus carrier lift (EDI 315) reports will be the basis for effecting payment to Carriers. Electronic Carrier Payment, MRM15 Payment Procedures will be implemented 30 days from the effective date of the contract. The automated payment procedures require the awardee to become a certified PowerTrack carrier. The POC at US Bank is Linda Paulson, 612-973-6437.

3.17 Quality Council Meetings

The Contractor shall participate with the Government in an effort to continuously improve the processes involved in providing excellent international cargo transportation services. Quality Council membership may consist of SDDC representatives, cargo shippers, ACO, COR, other contracting personnel, receiving activities, and the Carrier.

The Contractor’s assistance shall include participation (preparation, active participation, and follow-up) in quality council meetings during each year, or as needed, of this contract. The purpose of the Quality Council meetings is to identify and develop solutions to operational problems.

4.0 CONTRACT ADMINISTRATION

4.1 The Contracting Officer (CO) who shall perform Contract administration for this contract is:

US TRANSPORTATION COMMAND

ACQUISITION/TCAQ

508 SCOTT DRIVE – BLD 1961

SCOTT AFB, IL 62225-5357

Telephone: (618) 256-6648 or (618) 256-6895 Fax: (618) 256-6419

4.2 Shipping Orders/Delivery Orders

When transportation services are ordered under this Contract, a booking will be issued by the Government. The Government will prepare all necessary papers including vessel papers or manifests listing the cargo stowed in containers aboard the vessel. Such papers, including vessel papers or manifests, shall be receipted by the Carrier or his agent, and shall be evidence of ownership. These documents and the Shipping Order shall be deemed to be an Order within the meaning of the Ordering Clause (FAR 52.216-19). The CO shall provide the Carrier with written notice of the Government activities authorized to issue Shipping Orders.

4.3 Container Size Ordered/Provided

When ordering ISO containers from the Carrier, the OO will specify the type, length, height, and capacity of the container required. The Carrier shall not furnish a container of a different type or cubic capacity than that ordered without the written consent of the OO. If the OO allows the Carrier to substitute a larger size container than booked, and the loaded shipment does not exceed the cubic capacity of the size container originally ordered, the Government shall pay for the size ordered. If the loaded shipment exceeds the cubic capacity of the size container originally ordered, the Government will pay for the size container actually furnished.

4.4 Application of Rates

4.4.1 Expression of Rates

All rates appearing in CARE-SM II System are stated in U.S. dollars and cents per the applicable unit of measure.

4.4.2 Containerized Cargo

Containers stuffed with general cargo (including mail/mail equipment), refrigerated cargo, vehicles, neo-bulk cargo (bulk commodities in tank containers), controlled atmosphere cargo, hazardous material cargo, flatrack service, and recyclable cargo shall be freighted at the appropriate rate(s) stated in CARE-SM II System.

4.4.3 Break-bulk Cargo

Break-bulk cargo shall be freighted by applying the applicable rate to the manifested measurement tonnage of the cargo. Cargo booked as break-bulk cargo shall be so freighted, regardless of whether containerized for the Carrier's convenience.

4.5 Exceptions to General Application of Rates

4.5.1 Carrier Imposed Weight Restrictions

When a container is precluded from being utilized to its maximum capacity because of Carrier imposed restrictions which limit the weight carrying capacity below the maximum weight carrying capacity of the container, the cargo shall be freighted at the applicable measurement ton basic rate applied to the manifest measure of the cargo applied pro-rata to useable carrying capacity (e.g., if the maximum capacity of the container is 20,000 lbs, but the restricted capacity is 15,000 lbs, the container shall be freighted at 75% of its usual measurement ton rate).

4.5.2 Government Furnished Containers

The Carrier's charges for through transportation of commercially acceptable Government containers will be ninety-five percent of the appropriate rate for that cargo commodity. The Carrier's charges for empty Government containers shall be one-half the appropriate rate for that container type. Tank containers are exempt from this provision since the tanks are exclusively government furnished equipment.

4.5.3 High Cube Containers

If the Government orders the use of a high cube (9'6" high) container, the Carrier will be paid 115% of the appropriate container rate in CARE-SM II System.

4.5.4 Over Dimensional and Unusual Size Cargo Service

(1) Over dimensional cargo is defined as cargo that when booked to be shipped as a unit of cargo in/on a single container does not exceed the following maximum weight and dimensions:

Weight: 48,000 lbs.

Length: 40'0" (480")

Width: 11'0" (132")

Height: 11'6" (138")

In addition, over dimensional cargo is considered to be cargo within the above maximum dimensions and weight which has a dimension (length, width, or height) that exceeds any external dimension of the container most suitable to the cargo when loaded and measured in/on such container. Selection of the equipment used for ocean transportation shall not result in over length dimensions when the cargo is loaded on a 40-foot flatrack, not a 20-foot flatrack.

(2) Charges for over dimensional cargo stowed on a vessel in containers shall equal the additional ocean rate for equivalent displaced standard dry container(s) by size, in accordance with the following formula (which includes use of a flatrack container):

In gauge: BOF (Basic ocean freight)

+FRS (Flat rack surcharge)

TC (Total charge)

Over height: BOF+(BOF x 60%)

+FRS

TC

Over width: BOF+((BOFx2)x 60%)

+FRS

TC

Over height and BOF+((BOFx5)x 60%) and over width: +FRS

TC

A 40 percent discount shall be applied for displaced slots in any configuration.

If other than flatracks are used to ship over dimensional cargo, the flatrack surcharge shall not be applied to the formula.

Flatrack surcharges shall not apply to Government owned flatracks in the rate computation for over dimensional cargo.

Displaced slots for which charges are assessed will be counted toward the minimum cargo guarantee.

Cargo that cannot be loaded on or in an intermodal container (closed, open top, flatrack) prior to stevedoring is not covered by this formula.

The over dimensional formula is limited to port to port terms only.

This formula can be applied to cargo exceeding either the weight and/or the dimensions defining over dimensional cargo when the Government and the carrier mutually agree to do so at the time of cargo booking.

Vacant slots for which charges are assessed will be counted toward the average minimum cargo guarantee stated at 2.4 of this section.

The Government reserves the right to ship oversized/over dimensional cargo on break-bulk terms. The Carrier, at its discretion, may elect to containerize the cargo, but at no additional cost to the Government above those break-bulk rates set forth in the CARE-SM II System.

4.6 Refunds, Rebates and Credits

The Carrier agrees that any refunds, rebates, credits or other amounts (including any interest thereon) accruing to or received by the Carrier under this Contract shall be paid by the Carrier to the Government to the extent that they are properly allocable to costs, expenses or reimbursements for which the Carrier has been reimbursed by the Government under the terms of this Contract.

4.7 Agreed Cost Responsibility

4.7.1 General

As a means of facilitating the administration of this Contract, the parties have agreed that certain items of cost anticipated as likely to arise in the performance of their respective duties under this Contract shall be listed. Determinations of responsibility for items of cost agreed by the parties under this Section are intended to be consistent with the substantive clauses of this Contract; provided however, in the event of conflict, the substantive clauses of the Contract shall prevail.

4.7.2 Responsibility of the Carrier

The Carrier is responsible for the costs associated with the following services:

4.7.2.1 Furnishing and maintaining containers and chassis

4.7.2.1.1. Carrier must provide a minimum of twenty-four (24) 40’ FEU chassis’s and six (6) 20’ TEU eight pen chassis's.

4.7.2.2 Drayage of containers in CONUS

Including: furnishing and maintaining tractors; furnishing drivers; CONUS delivery costs of movement of containers, including tractors and driver; highway, ferry, tunnel and bridge tolls; and user taxes.

4.7.2.3 Vessel Operations

All costs of the vessel operation and all CONUS port charges and other expenses charged to the carrier’s vessel in CONUS ports.

4.7.2.4 Container Terminal Costs

All CONUS container terminal costs including: receipt of containers; stevedoring; port handling; marshaling of containers; and cleaning containers before stuffing and after un-stuffing.

4.7.2.5 Taxes, dues, fees and other charges

Taxes, dues, fees and other charges (including storage charges levied by governments, ports authorities, or wharfingers) on break-bulk cargo, on the containers, and on their contents, if any, except those charges which are payable by the Government.

4.7.2.6 Handling charges

Handling charges including terminal tariff handling charges according to the custom of the port; agency fees in connection with port clearance of cargo.

4.7.3 Responsibility of the Government

The Government is responsible for the cost of the following services:

4.7.3.1 Respot of containers

Respot of containers within a Government facility, supply point or vendor's plant.

4.7.3.2 Container stuffing and un-stuffing

Container stuffing and un-stuffing including: labor employed; packing material and/or dunnage employed; preparing documentation; sealing the container; removal of packing material, dunnage and placards; and sweeping.

4.7.3.3 Miscellaneous dues, fees and charges

Miscellaneous dues, fees and charges including: cargo surveyor fees when services are ordered by the Government or when resulting from dispute between the Government and the Carrier resolved in favor of the Carrier; drayage or line-haul charges listed under Section 4.7.2.2 above when performed by the Government.

4.7.3.4 All fees

All fees charged to the vessel and port storage charges for containers and cargo by the commercial Port of Praia, Azores shall be to the Government’s account.

4.7.3.5 Stevedoring and port handling straight time

Stevedoring and port handling straight time worked in Port of Praia unless the Government elects to employ Carrier liner services in the Port of Praia. Cargo operations outside normal operating hours shall be undertaken and costs distributed as mutually agreed upon.

4.7.3.6 Additional personnel

Additional personnel ordered by the Government including: transportation and travel time of stevedore personnel when ordered by the Government for its account; overtime for customs, agriculture or public health officers provided for the convenience of the cargo, when requested by the Government.

4.7.3.7 Contaminated cargo costs

Contaminated cargo costs including: fumigation required solely because of contaminated Government cargo, including related costs and detention; crew overtime in connection with standby security watch when required by the ACO during loading and discharging; crew wages, fringe benefits and related payroll tax when ship's crew are performing longshore work in cargo operations at the request of the terminal or by custom of the port including members of the steward's department required to prepare additional meals.

4.7.3.8 Handling charges

Handling charges including customs and other fees, dues and/or taxes charged to the cargo; harbor and quay dues charged to cargo based on local tariffs.

4.7.3.9 Cargo landing and wharfage charges

Cargo landing and wharfage charges including: landing charges against cargo in accordance with the regulations of the port, including those billed by port authorities to the ship; and wharfage charged to military cargo unless the Government elects to utilize the carrier's Liner Terms.

4.7.3.10 All Azores container terminal costs

All Azores container terminal costs including: marshaling of containers; and cleaning containers before stuffing and after un-stuffing. These remain a Government cost responsibility unless the Government elects to utilize the carrier's Liner Terms.

5.0 SPECIAL CONTRACT REQUIREMENTS

5.1 References to “Master” or “Crew” - All references in this Contract to "Master" or "Crew" or other ship's personnel shall be deemed to be references to "Carrier's Representative" except when the context precludes such reading.

5.2 Limitation Of Government Liability

5.2.1 Dead Freight. The Government shall not be liable for payment of dead freight.

5.2.2 Required Delivery Dates

Notwithstanding any other provisions of this Contract, the Government may make alternative transportation arrangements, without notice to the Carrier, for any cargo that the Carrier cannot deliver by the Required Delivery Date (RDD) provided by the OO for that cargo. The determination to make alternative transportation arrangements on the basis of RDD shall be made by the OO after submission of a request in writing from the COR for such arrangements.

5.3 Excepted Category Cargo

Excepted category cargos are listed below. Pursuant to the Changes Clause (FAR 52.243-1 Alternate IV), rates for their carriage may be negotiated by the Contracting Officer prior to booking. The Carrier shall not accept excepted category cargo for shipment unless a rate for its carriage has been negotiated with the Contracting Officer or the Contracting Officer has issued an unpriced change order pursuant to FAR 52.243-4, (AUG 1987). Cargo categories not excepted below and for which specific rates do not appear herein, shall be carried at the applicable General Cargo rate.

- Aircraft (unboxed)

- Bulk Cargo (not containerized in tank cars, vehicles, or containers)

- Boats over 40 feet in length

- Oversize/Overweight Cargo (single shipment quantity in excess of 50,000 pounds or 30 measurement tons)

5.4 Government Obligation

5.4.1 Commitment of Cargo

Unless the Government elects to employ Carrier services beyond the Port of Praia, for the purposes of this Contract the CONUS origin/destination points/ports shall be limited to the CONUS points indicated in THE CARE-SM II System. The Government, at its option, will determine if cargo will move between other CONUS points and the Port of Praia, Azores under this Contract or under separate Contractual arrangements, or between the Port of Praia, Azores, and OCONUS points indicated in the CARE-SM II System upon Government election to employ Carrier service beyond the Port of Praia. During the period of this Contract and subject to provisions set forth below and in Section 5.4, unless the Government elects to employ Carrier services beyond the Port of Praia, the Government will ship with the Carrier sustainment cargo offered for ocean transportation in the Defense Transportation System (DTS) between points and ports in CONUS and Port of Praia, Azores. In the event the space made available by the Carrier is insufficient to meet the requirements of the Government, the Contracting Officer reserves the right to make other arrangements to meet such requirements.

5.5 Limitations of Carrier's Obligation

5.5.1 Explosives

Explosives, other than small arms ammunition, are excluded from the scope of this Contract and shall not be carried hereunder.

5.6 Improper…