USC-8_Draft_RFP_Q As_(FBO_Posting-26May15).pdf

# RFP Section Para # Question US Government Response 1 N/A N/A How will USTRANSCOM/TCAQ integrate the two agreements? USC-8 will include terms, conditions and rates applicable to move international and domestic cargo.

2 N/A N/A According to the Milestones document plans are for startup of 11/1/2015. OY1 would still be in effect. Will the RDC rates and charges migrate over to the USC and also utilize OY2 rates on 12/1/15 or will we rebid with international carriers?

RDC rates will not migrate to the USC contract as they are separate contracts.

Domestic and international rates will be solicited once the RFP is released.

3 N/A N/A Will Domestic and International Rates and Contract language remain in separate sections of the USC or somehow combined?

The domestic and international terms, conditions rates and language will remain in similar sections as many of the terms and conditions apply to domestic and international transportation.

4 N/A N/A Please confirm that the Domestic contract will also have an annual refresh as the USC currently has.

All rates (domestic and international) solicited under the USC-8 contract will be refreshed annually.

5 N/A N/A There are significant differences in the contract language, processes, and procedures, between the RDC and the USC (such as Detention, ITV, Multi-modal, EDI reporting, Operational Reports, Invoicing, and more, as indicated in this draft) how will these items be addressed? Will there be future opportunities to address all of these concerns and receive answers to further questions that are not addressed here?

USC-8 is a new contract and will include the terms and conditions applicable to move international and domestic cargo. If there are requirements unique to a specific region, they will included in the performance work statement (PWS).

6 N/A N/A When creating RFP for Alaska tradelane please make sure you do not simply state as "Alaska" origin/destination. Three separate CLINS are needed to properly Price Alaska trade. The 3 ports are Anchorage, Kodiak, and Dutch Harbor.

There will be separate CLINS for interport trade within Alaska. However, ocean rates from outside Alaska are priced to the state of Alaska as a whole. The Government will not create separate CLINS for Anchorage, Kodiak and Dutch Harbor for non interport movements to/from Alaska.

7 N/A N/A The RDC-6 contains specific language relating to Hawaii and Alaska. Will this language migrate over to the USC PWS?

In general, the language specific to those regions will be included in the USC PWS;

however, there may be exceptions.

8 PWS 6.A.1 Alaska is missing from 6.A.1 under definition of Trade Areas. Will Alaska be added?

Yes, Alaska has been added to the final Performance Work Statement (PWS).

9 Att 6 A.7 The provisional pay model being implemented. First invoice provided on vessel departure 70% of total booked value, final invoice submitted upon delivery to cover the balance. Assume this will apply to the USC international carriers, and not the RDC domestic carriers due to our short transit times. Please confirm if this rule change will impact the RDC carriers.

The verbiage in Exhibit 3, PWS, Attachment 6, Invoicing and Payment applies to all ocean carrier movements.

10 PWS RDC-6 -3.A.12 Section 3.A.12 Manual Operational Reports is in the RDC-6, but I do not see it in the USC-8…is this no longer a requirement?

Operational Reports are required for all USC-8 movements. The operational report details are in Attachment 2 of the PWS.

USC-8 DRAFT RFP

QUESTIONS AND U.S. GOVERNMENT RESPONSES

11 PWS RDC-6 -3.A.20 Section 3.A.20 Transloading of Containerized Cargo is in the RDC-6, but I do not see it in the USC-8…is this not carrying over?

RDC 3.A.20 will be added to the USC-8 RFP via an Amendment.

12 PWS RDC-6 -3.D.1.5 Section 3.D.1.5 Contractor shall not roll cargo to a vessel(s) that has a lower VISA priority than the booking unless prior approval is granted by SDDC HQ. -- This is in the RDC-6, but not in the USC-8…is this the intent?

In accordance with PWS, Section 3.G.1, "The contractor shall use the flag and VISA priorities when making alternative service arrangements and may not use a lower flag or VISA priority without approval of SDDC HQ."

13 PWS RDC-6 -3.D.1.6 3.D.1.6 Contractor shall notify Ordering Officer of any cargo that rolls within 24 hours of booked vessel sail. -- This is in the RDC-6, but not in the USC-8…is this the intent?

Language has been added to PWS, Section 3.D.2 and captures this requirement for the Booking Reconciliation Tool (BRT) entry.

14 PWS 3.F.1.2 This similar section in the RDC-6 states two days prior to scheduled arrival at port of debarkation for notification to consignee/consignee's agent whereas the USC-8 states three days. -- What happens in trade lanes where the transit is equal to or less than 3 days?

Language was added to PWS, Section 3.F.1.2 stating Contractor shall immediately notify consignee/consignee’s agent and cognizant SDDC within 24 hours of vessel departure from port of embarkation if transit time to port of debarkation is equal to or less than 3 days.

15 PWS 3.F.5 The section states that for locations in CONUS using the Carrier Appointment System contractors shall use the CAS to make appointments for cargo delivery. It also references a Transportation Facilities Guide (TFG). This was not in the RDC-6 contract, how does this apply for RDC-6 carriers moving forward under the USC-8?

Once USC-8 is effective, all routes in the current USC-7 and RDC-6 contracts will be covered by the language in the USC-8 contract. The Transportation Facilities Guide can be accessed through the Electronic Transportation Acquisition (ETA) Portal and Global Freight Management (GFM) system.

16 PWS N/A Unless we are missing it, I do not see any information regarding Third Party Pay System (TPPS) which is currently US Bank. Will this be incorporated into USC-8?

A third party pay system will not be used for USC-8 Integrated Booking System (IBS) bookings.

17 PWS RDC-6 4.A.5.1 Section 4.A.5.1 for RDD for POV Transport is in the RDC-6 but I do not see it included in the USC-8? Is this intentional?

PWS, paragraph 4.A.3 addresses special provisions for privately owned vehicles (POVs).

18 PWS RDC-6 4.A.5.3 Section 4.A.5.3 for POV Delivery after Force Majeure or Excusable Delay is in the RDC-6 but I do not see it included in the USC-8? Is this intentional?

The contract addresses delivery after force majeure or excusable delays.

19 PWS N/A Will the addition of Section 6 of the RDC-6 be included in the USC-8 which pertains to Region Specific Requirements (ie: Alaska, Hawaii and Puerto Rico)?

Yes, the geographic-specific language for PR/HI/AK has been added to Section 7 in the PWS.

20 Att 2 5 Report # 5 Container Fleet Report I do not see this as a current report requirement in the RDC-6…if this is going to be needed in the USC-8 is there an example of this report that can be provided?

The Container Fleet Report will be required for all USC-8 carriers. This information will be used in validating DOD ownership data and will improve data accuracy in day-to-day operations. There is not a specific format, but the required elements are listed in Attachment 2 of the PWS, Section 5.

21 Att 6 B.2 The Treasury Invoice Processing Portal is not presently in the RDC-6. How does this process work and how does it differ from the RDC-6 practice today? Will ample time be given to get setup and trained on this portal for those not currently using?

The Treasury IPP will be the entry point for all SDDC ocean carrier invoice data.

This portal will have the capability to accept invoice data in file format or via direct input. Training will be provided once this capability is fully configured later this year.

22 N/A N/A A concern from the Jones Act carriers being merged with the USC is that it may allow for the large international ocean carriers to exercise their influence (either directly or indirectly) on smaller trades such as the Jones Act trades (ie: Alaska, Hawaii and Puerto Rico)

All domestic and international carriers will be treated fairly.

23 Att 3 1.1.1.6 Equipment longer than 45' is frequently ordered and provided. Some pool locations have historically required this equipment. There needs to be a specific formula for equipment larger than 45' when ordered. There are similar contract provisions for displaced slots and for breakbulk over 45'.

In accordance with Attachment 3 of the PWS, paragraph 1.1.1.6, "A surcharge of 12.5% of the basic rate for a 40 foot container shall be applied for use of any 45 foot (or greater) container." This surcharge will apply to all containers 45 foot and over.

24 Att 3 1.2.5 Will the "Inoperable Vehicle Surcharge" continue to be a min of $75, max of $150?

In every instance this occurs, the charges incurred far outweigh the dollar amount we are allowed to bill back under this contract.

PWS, Attachment 3, Para 1.2.5 was removed and the definition of liner terms modified to include any inoperable vehicle fees.

25 Att 3 1.3.2.1 Why does the DTOD allow searching by zip codes as the USC7 specifically says zip codes will not be used for mileage calculations? Confusing.

DTOD is a commercial off-the-shelf product, which offers different options to its commercial customers. For USC, the zip code feature will not be utilized.

26 PWS 3.A.20 The "Maximum Use of Conveyance" paragraph has been crossed out in the USC7.

The redacted provision mirrors the spirit of 3.A.23 in the RDC6. Will a CONUS version of 3.A.23 in the RDC6 be added to the USC8?

The language is in PWS, Section 3.A.19.

27 PWS 3.C.1.2.2.1 This paragraph mentions container pools are contained in Attachment 2 but this is not attached. Please provide specific requirements for container pools.

Container pool language is included in the PWS, Section 3.A.15.

28 N/A N/A We do not see that the USC mentions a Keep From Freezing surcharge. The RDC Alaska provisions in 6.B include a KFF service differential, a charge for redelivery of KFF and a KFF Inland differential. Will those accessorials be retained in USC 8.

This is a service that is ordered quite often.

The language was added to the PWS, Section 7.B.1.

29 Att 6 A.7 We submit only one invoice on delivery. For voyages of short duration, submitting two invoices will add work for both parties. We feel that this provision should be optional, as it is in RDC

Carriers will have the option to either submit an initial and final invoice or one first and final invoice upon delivery of goods to the Government (X1).

30 Att 6 B.2 We have never used the Treasury Invoice Processing Portal. Currently per SDDC instructions and provisions of RDC, invoices are submitted on a spreadsheet to the G8 AP Invoices Mailbox. Can we continue to invoice using the spreadsheet or will training be provided on the requirements of this system.

Once we implement the Treasury IPP, it will be the entry point for all SDDC ocean carrier invoice data. This portal will have the capability to accept invoice data in file format or via direct input. Training will be provided once this capability is fully configured later this year.

31 Att 3 Refrigerated Differential

Is there a refrigerated differential that applies to ocean and single factor rates? Reefer differentials do no apply to single factor rates, but there is a reefer differential for ocean rates. In accordance with Attachment 3 of the PWS, paragraph 1.1.1.5.1, "For routes where 20 foot rates are not on contract, 20 foot container ocean rates shall be calculated at 75% of the applicable 40 foot and over dry or reefer rates and rounded to the nearest dollar." This applies when obtaining a 20' reefer rate from a 40' reefer rate but not for a dry rate to a reefer rate.

32 Exhibit 3 3.H.1 When applying charges for a Stop-off vs. Mini-stop is the deciding factor based on the last door in which the trailer was spotted?

A mini-stop applies only to an additional stop on the same base/location as a regular stopoff The cost for a mini-stop will be lower than for a regular stopoff. The stop-off charges are in the PWS, Section 3.H.1.

33 Att 6 A Question: The DoD Third Party Payment System (TPPS) was recently awarded to U.S. Bank with a 5 year no cost contract which became effective 1 Jan 2015. The DoD contract language in that contract says: "Transportation payment shall encompass, but not be limited to, auditable settlement for any type of trucking, rail, air, pipeline, barge, sealift, express package, household goods, inter-modal, packing or internal DoD and other designated Federal Agencies’ transactions where the buyer and seller of a service have a fee for service relationship." Question: Does USC-8 Draft as proposed, remove the DoD Third Party Payment System (Third Party Payment System) mandated use of commercial system for Ocean Payments?

Also, continuing to utilize the Third Party Payment System meets all requirements specified in new USC-8 language with no additional system changes, or development costs for the US Government. Request SDDC further review this proposal, fully understand the additional costs, internal and external manpower workload and confusion, ongoing support and compliance, that this proposed change could bring when the current Third Party Payment System solution remains in place, fully functional and able to add system enhancements at zero cost to the US Government. Question: Third Party Payment System under USC-7 has accomplished all requirements identified in the USC-8 draft so why is the contracted Third Party Payment System not being used for USC-8?

The issue is not one of non performance, rather it is an issue of compelling business need. With TFMS being a best commercial practice system using Oracle Financials and the Treasury Invoice Processing Portal to automate the invoice input process, we simply do not have a business need to have a third party paying our bills.

34 Att 6 A.2 Question: Direct Booking accounts are currently billed via Third Party Payment System. Request following language be inserted: "Charges for services performed for containers booked under the Direct Booking process are to be billed directly to the shipper using the Third Party Payment System (U.S. Bank Freight Payment) process".

Concur. Language will be added in a future amendment to address this.

35 Att 6 A.3 Question: How will the carrier be notified of an invoice rejection? How will this be auditable and changes to discrepancies be tracked? Will changes be added in a real time web-based system as currently exists under Third Party Payment System?

Treasury IPP will provide a variety of notifications to vendors including notice of successful invoice/credit memo upload, notification that a submitted invoice/credit memo is in exception and needs fixing, and notification that a submitted invoice/credit memo was rejected.

36 Att 6 A.5 Question: Will there we a web-based two way electronic communication process between Shipper and carrier to resolve payment discrepancies? Will there be the ability to electronically attach supporting documents to support SDDC requirements? How will the additional information be accessible to GSA for post payment audits?

Both the Treasury IPP and TFMS have the capability to attach supporting documentation to a source transaction. SDDC is working to provide GSA auditors query access to TFMS so they can view all applicable transactions associated with an ocean movement (obligation, invoice, accrual, payment) in one system.

37 Att 6 A.6 Question: USC08 states payment will be made in 2 business days. How can you pay immediately without a pre-payment audit? Detailed records of all payment invoice actions are critical and used to verify claims. How and who will maintain the data repository of payments?

The pre-payment audit is performed systemically. Under the To-Be end to end process, vendors can only invoice for items which are properly obligated. These billing items will then match to ocean manifest/goods delivery data to create a payable transaction.

38 Att 6 A.6 Question: Under the proposed internal system, how does SDDC plan to inform and accept additional certification information needed for payment resolution?

Any required substantiating documents can be attached to an invoice within the Treasury Invoice Processing Portal and passed to TFMS. TFMS also has the ability to attach these documents to source transactions. Any info associated with Certifying Officer's certification is already maintained within TFMS.

39 Att 6 A.6 Question: What authority exempts this program from the Prompt Payment Act? Prompt Payment Act provisions do apply and will be adhered to in this process.

40 Att 6 A.6 Question: USC-8 Draft states that payment will be disbursed to carriers within 2 days of carrier submission. Question: How will payment be disbursed? Are processing times by government officials being considered in this 2 day window?

How will invoices that are HELD up for payment be worked? Will the government notify the carrier that additional actions must be taken? Will this be done by email, phone, on line? Will the carrier have visibility to all payment actions? Currently under Third Party Payment System, both Shipper and Carrier have real time electronic visibility and resolution capability which speeds the payment.

TFMS passes a payable file to the Centralized Disbursing System for payment.

Vendors will get real time invoice status info from the Treasury Invoice Processing portal .

41 Att 6 A.6 Question: How are immediate payment terms compliant with DoD regulations concerning cash management policies? What is the impact to DoD days payable outstanding to use immediate payment terms with government funds versus using the Third Party Payment System that allows the government to cash manage funds by having U.S. Bank make the payment to carrier using U.S. Bank funds?

No compliance issue noted here. Our policy is simply acknowledging that we are dealing with a supplier group with extremely narrow cash positions.

42 Att 6 A.6 Question: Has the manual costs associated with billing exceptions on additional billing transactions been reviewed and factored into the overall cost to the government?

Yes, we have also factored in the offsetting reduction in labor associated with elimination of invoice manual entry thru implementation of the Treasury Invoice Processing portal.

43 Att 6 A.6 Question: How will offsets if needed be handled within proposed internal Government Payment process?

TFMS has the ability to process payment offsets as part of an overall AR/AP netting solution. Both Treasury IPP and TFMS can also process credit memo invoices as needed.

44 Att 6 A.7 Question: Draft language indicates that SDDC will pay 70% upon Vessel Departed and remainder on delivery upon balance. How is this to be handled i.e.: separate invoices and what means are in place to handle additional supplemental charges electronically at final settlement? Does the new system allow for supplemental charges which are linked to existing invoice # and provide start to end payment information for later audits, metrics, etc? How will the total charges for the shipment be tracked and made visible to carriers, shippers, GSA and other stakeholders?

We will implement a provisional pay model which will encompass a first invoice at vessel departure and a final invoice at goods delivery. The first invoice will encompass all charges except linehaul from POD and all accessorials. The final invoice will encompass these remaining charges. Booking obligation data and invoice status data will be exposed to carriers via the Treasury IPP and GSA and other compliance reporting entities will have online query access to TFMS.

45 Att 6 B.2 Question: Draft states that all invoices will be submitted electronically into the Treasury Invoice Portal. Presently, all Ocean carriers are not fully EDI capable.

Are there provisions to allow a carrier to use a User Interface for submission as presently exists under USC-7 with Third Party Payment System? The number of U.S. Flag Carriers are small and getting smaller, this requirement puts an undue cost burden on the carriers. Also for any carrier requiring EDI assistance to implement/test/train, will SDDC provide or have IT resources to assist? Are the additional EDI cost factors being considered? Will there be support for carriers who make system changes ongoing to do testing and have a fully functional test environment available as required in the DoD Third Party Payment System contract?

Treasury IPP has an online portal capability which can be used for direct input of invoice data. Treasury and SDDC will assist carriers in implementing their invoicing solution to include testing and training.

46 Att 6 B.2 Question: Interface with DoD Shipper Systems: Has SDDC factored in any future shipper shipment requirements and the cost associated to integrate within the internal payment module? Will this process interface with the following shipper systems:

a. Cargo Movement Operations System (CMOS)

b. Global Freight Management (GFM)

c. Financial and Air Clearance Transportation System (FACTS)

d. Integrated Booking System (IBS)

e. Central Web Application (CWA)

f. Defense Personal Property System (DPS)

g. Distribution Standard System (DSS)

h. Vendor Shipment Module (VSM) plus all other commercial and other government systems.

The To Be ocean carrier environment will include all entitlement within TFMS with booking data passed from IBS via new interface and manifest data passed from GATES via new interface. The activity included in this solution is international freight shipments only, domestic freight management is not in scope.

47 Att 6 B.2 Will there be a EDI 997--EDI acknowledgement be used to ensure carrier data is received in the internal system? Who will pay the costs for testing the EDI transmissions?

Yes

48 Att 6 B.2 Will there be an EDI 824 provided to the carrier? Yes 49 Att 6 E Question: Equitable Adjustments as written seems to address additional charges that occurs after settlement occurs. Will the system provide a complete transaction record that reflects all payments on a particular shipment? How will these transactions be stored? Will they be stored in IGC?

Any Request for Equitable adjustment will be stored in TFMS associated with the correct contract document. TFMS will contain the complete contract history including all IBS booked charges, One Time Only bookings, Non IBS booked charges and Request for Equitable Adjustment charges.

50 Att 6 E. Question: Why are any invoices being sent via email? How does this provide an audit trail for compliance? Why are these invoices not being sent using the online Third Party Payment System?

Invoices will be submitted to the Treasury Invoice Processing portal. Invoices can be submitted via interface or via online screen submission. Submission via email would be a fallback only if the carrier could not access the portal.

51 Att 6 Overall Question: Will the new system provide Ad Hoc report building capability? . If so, is there a cost associated with that? If reporting exists, will carriers and shippers have access to that? Will there be a charge for using a reporting system if it exists?

The Treasury IPP system provides vendors with both canned and adhoc reports for purchase order, invoice and payment data.

52 Att 6 Overall Question: Will the carrier be provided an on-line daily data feed to post the payment directly to the carriers General Ledger accounting system? Will Treasury send (EDI 820)? Will carrier payments reflect which invoice is being paid? Will there be a daily remittance statement available online that contains historical data?

The IPP Payment Notification Service (PNS) provides vendors paid by federal agencies with an IPP Collector account where they may do the following:

•View and search payment history.

•Configure payment notifications.

•Download remittance information.

In addition, each carrier will receive an email copy of a payment advice each day from TFMS indicating the total amount to be paid and the individual amounts paid per invoice.

53 Att 6 Overall Question: How will the Ocean carriers be paid, via ACH, check, EFT? Payment functionality is driven by the supplier profile. We can accommodate any commercial payment medium.

54 Att 6 Overall Question: How will USTRANSCOMN budget for future system enhancements with expansion, contingencies, interfaces with future shippers and carrier systems ?

This process is not impacted by the proposed change. The government budget process is not in scope for this discussion.

55 Att 6 Overall Comment: Is this system FIAR and SFIS compliant? Will there be additional programming required by either stakeholder to insure compliance and how will those enhancements and changes be handled?

The TFMS upgrade effort encompasses all components of FIAR, SFIS, USSGL and SLOA compliance.

56 Att 6 Overall Question: Who will provide training to the carriers on use of the system? Will there be on demand and instructor lead courses on an ongoing basis? Will there be in person training provided at to the government or the carrier?

SDDC and Treasury staff will collaborate to provide instructor led training. Each month, Treasury IPP hosts a live, Web-based information session that provides an overview of IPP’s electronic invoicing system, its benefits and features (including remittance download and payment notification options), and more. This is a great opportunity to learn the basics or call in and ask the IPP team questions about the IPP application. Treasury also publishes a variety of quick reference and end user guides designed to help IPP users and administrators learn more about IPP’s features and functions.

57 Att 6 Overall Question: Is there a data storage cost for data retention? If so who is paying for it?

Where is the historical data being stored and will all stakeholders have access to it (shipper, carrier, auditors) online for 6 years and 3 months?

There is no net difference in the amount of data which must be maintained, as we still load and maintain the detail of all charges in the current process which utilizes the Third Party Pay capability.

58 Att 6 Overall Question: Is there online audit trail for all documents for all stakeholders that shows any changes to documents? Is there a detailed audit trail that tracks changes to any document and captures who took action in the process?

Yes, TFMS will maintain a complete audit trail of all ocean movement financial transactions to include copies of obligation transactions/documents, invoice transactions/documents, performance transactions/ documents and payment transactions. This data will be maintained for the required 6 years, 3 months as required by the DoD FMR.

59 Att 6 Overall Question: Will there be a phased approach to use this process first beginning with invoices that are manually paid today versus immediately moving away from the proven Third Party Payment System?

Specific implementation strategies may differ for individual carriers and will be developed in conjunction within vendor input.

60 Att 6 Overall Question: Will there be a live 24 hour, seven day a week toll free help line to assist shippers and carriers?

IPP services are available 24 hours a day, seven days a week. The IPP Customer Support Team is available to assist users Monday through Friday (excluding federal holidays) from 8 a.m. to 6 p.m. Eastern and can be reached at (866) 973-3131.

61 Exhibit 2 2.1.1/2.1.2/2.1.3/

2.1.32 /2.1.5 Liability for Lost or Damages Cargo and

COGSA

COGSA must apply for all cargo from origin to destination. Carriers are not aware of the value of the cargo at the time of booking so how can CARMAC apply.

COGSA piece count is as declared by the shipper in accordance with standard shipping practices. Cannot accept CARMAC or any other mixed liability scheme.

Carriers have a $50,000 liability cap on all cargo bookings that are misdeclared or not declared. The government is REQUIRED to provide timely notice to a carrier once the loss is discovered and the government forfeits it's claim against the carrier if timely notice is not given. Carrier recommend adding USC Carriers have a maximum of $50,000 per booking on misidentified or undeclared cargo.

Language was revised to state COGSA shall apply from the point of delivery to the Contractor to the point of delivery to the Consignee, and the CARMAC language was removed.

62 Exhibit 2 2.5 Amended Jason Clause

The Amended Jason Clause must remain as part of the contract. Government must retain all the responsibilities and liabilities of a shipper under maritime law.

Removal of the Amended Jason Clause creates uncertainty with respect to application of General Average and results in additional complexity in determining underwriter's exposure.

The Amended Jason Clause will be retained in USC-8.

63 Exhibit 2 2.6 General Average

Cannot accept any changes to the General Average. All shippers must maintain standard liability

General Average will be retained in USC-8

64 Exhibit 2 6.3 Notice of Approval of Delay.

Carriers must have additional recourse to recover when delays have been improperly denied or carriers have been unable to properly report via DRAP. Recommend removing this language this provision would seemingly allow the government to arbitrarily deny or prohibit pursuit of compensation for government caused delays based on a contractual provision. This is inconsistent with compensable delays and equitable adjustment clauses.

If a carrier feels a contracting officer representative (COR) has made an improper decision, carriers should work with TCAQ to resolve the issue.

65 Exhibit 2 6.4 Exigency Areas.

REA capability must be expanded and include Other Governments in an Exigency Area if the government expects carriers to provide services in dangerous areas under extreme and unpredictable circumstances with limited oversight and control.

Require that the USC-7 language remain in the contract in Exhibit 2.

Exhibit 2, para 6.4 has been updated to read: Exigency Areas. With respect to declared Exigency Areas (contained in Exhibit 3, PWS, Exigency Annex), the scope of equitable adjustment is hereby broadened to the extent that action or inaction by any government, not just the U.S. Government, delays Contractor performance in a declared Exigency Area or at the border of a declared Exigency Areas. In all other respects, the terms of Paragraph

6.2 above shall apply to Exigency Areas.

66 PWS 3.F.1.7 A signed delivery receipt with no damage noted does not preclude the US Government from pursuing a claim for damages discovered after delivery.

Recommend Language be added that Carriers are notified within 48 hours of discovery of the damage, missing or pilferage of cargo.

PWS updated to indicate that notifications will "normally but not necessarily" be made within 3 days of discovery.

67 PWS 3.F.4.1 Carriers cannot accept this request for undefined penalties. Recommend that language be deleted because Carriers always make best efforts to pick up containers in a timely manner per commercial best practice.

This requirement was in USC-7 and is still required by Container Management (G3).

68 PWS 3.G.2.2

Recurring Service Failure

Contractor can be put on "Limited Use" for any of the following reasons:

1. Carrier Performance scores falling below 0.7 for two consecutive monthly ratings (worldwide rating), or (for a single lane) if the score falls below 0.75 for two consecutive monthly ratings

2. Rejection of one or more bookings that are required IAW 3.A.6 or contingency annex

3. Lost, damaged, or pilfered shipments exceeding 0.5% of all shipments.

4. Failure to report one or more cargo losses, breaches, hijackings as required by the Contingency Annex.

Recommend remove criteria 1 and 3. USC metrics are extremely poor at measuring actual contractor performance. Contractors work with the government to achieve the best service possible for our customers. Unfortunately, significant disruptions can occur which neither the government not the carrier can immediately correct at a reasonable cost. Government rates are are not nearly high enough to enable profitable operations and delivery in all situations. Additionally, a disruption in any carriers service which may temporarily impact service does not allow SDDC to go outside US Flag laws. The government has the option to book with the carrier or not.

Recurring Service Failure has been retained as a requirement for USC-8.

69 PWS 3.G.10 Port Storage

Carriers are not prepared to absorb port storage fees for situations controlled by host nation governments (or other parties outside the control of the Carriers) or acts of God. If the Government will require carriers to be contractually responsible for unforeseen or unexpected port storage (i.e., it is not in the Carrier's rate), then Carriers may have to reject bookings due to the fact that Carriers may take an overall loss on the movement. In addition, Carriers absorb the administrative and processing fees associated with port storage, as well as the carrying cost of the time period between paying port storage and obtaining reimbursement from the Government. In this way, Carriers are already incentivized to minimize or avoid port storage fees. In addition, and as discussed at the SAW, port storage fees are always for the consignees account in a commercial context. Under Part 12 contracting procedures, TRANSCOM is required to use these commercial practices to the maximum extent practicable.

Concur. PWS, Para 3.G.10.1 was modified to allow for Port Storage fees to be reimbursable as a Pass-Through, even in cases of 3rd party delays, if such fees were actually incurred and paid by carrier to the Port Authority.

70 Attachment 6 Invoicing and Payment

A.6 Payment Terms/Prompt Payment

The provisions of the Prompt Payment Act will not apply to this contract. A pay immediate payment term will be applied to all invoices processed in conjunction with this contract. Once a payable invoice is received by the government, entitlement action will be completed and funds will be disbursed to the carrier within 2 business days. Recommend: Language be amended to reflect that "entitlement action will be completed within 5 business days of invoice receipt and funds will be disbursed to the carrier within 2 business days." What happens if the carrier is not paid in 2 days.

A.6 revised to "The provisions of cash management will not apply to this contract. A pay immediate payment term will be applied to all invoices processed in conjunction with this contract. Once a payable invoice is received by the government, entitlement action will be completed and funds will be disbursed to the carrier. The standard entitlement processing cycle for these invoices will include disbursement of funds to the carrier financial institution within two business days of payable transaction certification within the Transportation Financial Management System (TFMS)."

71 Att 6 A.7 A provisional pay model will be implemented for this contract. The first invoice will be provided upon vessel departure and will be for 70% of the total booked value of the move. The final invoice will be submitted upon delivery of goods and will cover the balance of the total movement bill. This does not fit into commercial payment model, nor is it clear how this split payment is mandated by FIAR. If commercial customers with audited financial statements can pay 100% on lift, it is unclear why the Government cannot implement sufficient internal controls that are also consistent with this model. Recommend:100% pay on lift for all sustainment cargo.

For exigency 100% pay on lift with the exception of enhanced ITV, tarping, washing and enhanced security.

A.7 revised to "Carriers are authorized to bill for linehaul to POE, Ocean Transport, Liner In/Liner Out and BAF/CAF/FAF charges on vessel departure. Carriers are further authorized to bill all other charges including linehaul from POD and all accessorial charges on delivery of the goods. Delivery is defined as actual delivery -- for bookings to-port, actual pickup by the Government; and for bookings to-door, actual delivery to consignee. Carriers are authorized to submit the delivery related billing in absence of an EDI X1 transaction if there is a Government-caused hold/delay which results in cargo not able to be delivered by carrier for more than 3 months beyond the Required Delivery Date."

72 Att 7 1. Bunker Adjustment Factor (BAF)

Carriers nonconcur with the resetting the baseline for every year of the USC-8 contract. The adjusted Tech Factors are not reasonable and recommend that government use carrier's commercial BAF application.

The baseline will be reset on an annual basis based on a memorandum issued by TCCC to the USTRANSCOM Acquisition Executive. USTRANSCOM AQ has been working with Industry and the Volpe team to ensure the technical factors are fair.

73 Exhibit 4 Ordering Procedure Contractor Selection 2- Ordering Process for Bookings

Best Value Determination proposed language is very complicated for a contract that was intended to be simplified. The worldwide composite score is not fair to carriers who perform government services on the most difficult routes or take on difficult cargos on behalf of the government. This composite score also "over-credits" lane score, as 50% of the past performance, regardless of the number of lane moves as opposed to global service performed. Recommendation: Removing the composite score language. This approach must be tested before it is fully implemented.

The composite score is intended to take both worldwide and lane scores into account. When evaluating best value for a particular lane, that lane figures prominently (but not entirely) in the score.

74 Exigency Annex

Exigency Annex Carriers recommend that and newly declared exigency area will need to be reviewed on a case by case basis. Not a one size fits all solution. Also, considering that the contingency annex will fundamentally change the performance for declared exigency areas, will the carriers be provided the opportunity to submit new rates to reflect this changed service?

Rates are refreshed annually. If carriers feel their rates are no longer compensatory, they can counteroffer or reject a booking in most situations. If a booking is mandatory, carriers can submit a REA to USTRANSCOM AQ.

75 Exigency Annex

B.1 - Leasing of Containers

Industry recommends removing leasing language from USC8. Also, Carriers nonconcur with mandatory acceptance of GFC. The acceptance of GFC disrupt carriers equipment management and planning. All Government Owned containers are subject to Space Availability and surcharge.

Leasing language was been removed from USC-8, Exigency Annex. GFC language was retained as the Government requires surge capacity of GFC and a 5% surcharge will be added to a Carrier's container price for all GFC over the amount of 200.

76 Exigency Annex

B.2 - Container Detention

Container Detention section needs additional clarity. Terms should be per exigency area. Appears, to extend free-time through exigency, resulting in less favorable terms in many locations than present in USC07. Schedules of rates should be determined for each exigency area. One size does not fit all

The 40 days free time for dry containers and 35 days free time for reefer containers is for the exigency annex. Note that these additional days also include transit time from POD to consignee, whereas peacetime freetime does not.

77 Exigency Annex

B.3 Container Detention

Revise - Free time/detention will run during all staging, days sitting in port and for all US Government, Other Government, Third Party, Acts of God caused delays

Freetime/detention will run during all Government-directed staging and if caused by Governmental (whether US or Host Nation) delay. It will not run due to delays not caused by a Government (e.g. acts of carrier, Third Party such as strikes, or Act of God).

78 Exigency Annex

B.5 Carriers nonconcur with language requiring outgates within 5 days. It is an unrealistic expectation to move numerous containers within 5 days due to base reception constraints and causes significant cost exposures to Carriers.

PWS, Exigency Annex, paragraph B.5 requires coordination (i.e. dispatch plan) with SDDC if unable to outgate within 5 days.

79 Exigency Annex

N/A What is the carriers responsibility now beyond (MARSEC)? USC-7 contract language should be reinstated for the protection of the safety of the U.S. Mariner.

Will this be discussed at the EWG?

High Risk Waters Armed Security (Exigency Annex para B.11) has been added to the contract.

80 Clauses Clauses Incorporated By Reference

52.219-13 Notice of Set-Aside of Orders. - Why was this clause added and what USC business is being set aside for small businesses or other disenfranchised business? What is the government's intent? Recommend that clause be removed since it is no longer necessary. The awards have already been issued for set aside routes i.e.; Azores etc. This clause conflicts with DoD policy on VISA priority.

After further review, this clause was removed from the solicitation.

81 PWS 3.A.2 -

Hazardous Cargo

If the signed HAZ DECs are not provided by shipper at the time of lifting the cargo from their site, can carrier not lift the cargo?

Also if we incur the truck/trailer detention due to missing DOCs can this be rebilled to USM thru pass-through or REA re-billing process?

Currently there are no repercussions for shippers who fail to provide timely HAZ paperwork / documentation. Carriers recommend a (No Doc / No Lift) event be added to the DRAP system.

For Bookings from Door involving Hazardous Cargo, Carriers will be given the option, at their discretion, to not schedule a pickup of HazMat cargo from origin if HazDocs are missing or not to its satisfaction. In those cases, futile trip charges will be not be paid, as carriers wishing to exercise such an option should not dispatch a truck to pick up the cargo. Any perceived documentation issues should be resolved prior to pickup from Origin Door, eliminating the need for a pass-through or DRAP.

82 PWS 3.2.2 Hazardous Cargo

The Contractor may refuse to transport hazardous cargo either by land or by ocean, which does not conform in all respects to applicable laws and regulations. Carriers recommend adding to this language "and as well as applicable to carrier policy"

Carriers may reject bookings which do not conform to its policy, even for the few cases of bookings that would otherwise be mandatory. However, once the booking is accepted, and if Government provided the correct information on the HazDocs, the carrier may not change its mind.

83 PWS 3.A.4.1

Invoicing and Payment

Clause reads: Contractor shall prepare and submit invoices or proper documentation for payment of shipments no later than one year from the occurrence of a billable event. Any invoice later over a year from the occurrence of a billable event shall be submitted to TCAQ as a Request for Equitable Adjustment. Contractor shall prepare and submit invoices in accordance with the requirements and procedures in attachment 6. The 1 year time limit on invoice submission is unacceptable.

Especially when compared to the government's request for 6 years to submit a cargo claim. Carriers make substantial efforts to invoice in a timely manner, however, due to the unique operating environments in which the government operates and the extremely onerous supporting documentation and invoicing requirements, long delays may occur Suggest: In the event that an invoice may be submitted over a year from the occurrence of a billable event the contractor shall contact SDDC G8 to advise of delayed invoice and request a 90 to 180 day extension based upon the circumstances of the delay. Upon expiration of the extension, any uninvoiced event shall be submitted to TCAQ as a Request for Equitable Adjustment.

The government would like to get invoices processed in a more timely manner. This is in the best interest of the carrier from a cash flow perspective and enables the government to keep accrued liabilities to a manageable number. We need carriers to commit to invoicing in accordance with some normal standard timeframe. Carriers will still have the same ability to file a claim for up to 6 years, but this effort is specifically addressing the normal processing cycle for invoice entitlement.

84 PWS 3.A.6 - Space Commitment

Clause reads: "Contractor must make available 10% of vessel capacity for the booking of Government cargo on each US flag vessel sailing from Continental United States (CONUS) on the designated routes listed below"; and "Counteroffers to RDD may be made by carrier no later than ten (10) days beyond the offered

RDD"

Recommend remove counteroffer as agreed to in SAW 2. Why is such language necessary when USM has ability to reject regardless of counter offer? Noted that counteroffer language has been updated to 10, but original position remains that clause is counter to the spirit of the accept/reject language in the USC Recommend:

Drop limits on RDD counter offers.

This section only applies in those cases where longstanding contract language limits carriers' otherwise unfettered right to reject or counteroffer on a booking. If a booking is mandatory and carriers could counteroffer with a lengthy delay to RDD, this would amount to a constructive refusal -- which is not permitted for mandatory bookings. Therefore, in these cases where a booking is mandatory, the right to counteroffer must be limited and not open-ended.

After careful consideration of carrier concerns, the language has been revised to "Counteroffers to RDD are permitted, provided that the counteroffered date is no longer than fourteen (14) calendar days beyond the offered RDD."

85 PWS 3.A.7.2 -

Schedule Maintenance

Background: 3. A.7.2 Schedule maintenance by contractor in IBS is critical, as the Government relies on schedules for the movement of all categories of cargo.

Failure by contractor to update schedules will constitute agreement by the carrier to delete the relevant rates (to include ocean and inland rates to/from the relevant ports) from CARE for the remainder of the Rate Year. Similarly, if booking offers against a schedule are rejected or counter offered in a manner which, in the judgment of the Contracting Officer, indicates that there is no service supporting the schedule, the relevant rates will be deleted from CARE.

Post SAW1 - Carriers discussed that schedules provided for the routes listed under sections 3.A.6 should to be maintained as noted in 3.A7.2. However schedules for other routes can to be provided by carriers upon request. What is the status of proposed automated schedule feed mentioned in most recent SDDC response.

Recommend: SDDC commit to auto feed for schedules as in the contract language or vessel schedule maintenance should only apply to the designated routes for space commitment.

Automated schedule feed into IBS is planned for early 2016. PWS, Section 3.A.7 revised to mitigate impact "until such time as auto-schedule-feed can be implemented" and limit mandatory schedule input (for lanes where carrier has rates on file) to only medium and large lanes. However, in those cases where (until implementation of auto-schedule-feed) a schedule will not be required to maintain a rate for lower-volume lanes, vessel schedules must nonetheless be input upon request, otherwise the rate will be deleted from CARE.

86 PWS 3.A.13 -

Required Delivery Date

Clause reads: "In the interest of facilitating the booking process, IBS will be programmed to not offer RDDs that are unrealistic, based on carrier’s vessel schedules. ). In general, RDDs will not be offered that (for port deliveries) are earlier than two days after vessel arrival, and (for door deliveries) that are earlier than one additional day for each 300 miles (or part thereof) beyond the port." The "300 miles" number seems arbitrary, and does not consider the varying degrees of difficulty to arrange SD shipments from a global perspective. Would appreciate further clarity as to how IBS programming will make such determinations. The 300 miles from a global perspective does not take into consideration customs clearance and any other destination specific issues. Request clarification from a global perspective

Carrier is free to counteroffer or reject bookings in almost all cases. The 300 miles is based on the fact that trucks in most locations can travel at least 300 miles per day. This is not to say that such a distance can be traveled everywhere in the world.

IBS, to the extent feasible, will be programmed to take different locations into account. Please note that an offered RDD might be in the "ambitious but doable" category. Carrier is expected to review offered RDDs for all bookings and counteroffer IAW carrier capabilities.

87 PWS 3.A.15 Chassis Requirement

Carriers are not willing to include the cost of chassis management in their rates.

Many areas (Africa for example) it is not a normal business practice for vendors to leave the chassis with the container. Afghanistan is a similar example. Recommend new language be added that chassis provided requirement applies when associated with inland transportation.

PWS, Para 3.A.15 reflects the Government's requirement.

88 PWS 3.A.18.1 (and 3.H.5)

3.A.18 states that Contractor will supply flatracks as required in the booking, and be paid a flatrack surcharge. 3.H.5 has been removed, which previously required the contractor to supply the necessary devices to secure the cargo with the flatrack.

Request reason for government removing the requirement to supply securing devices, as that may result in the Contractor altering the flatrack surcharge rate.

Para 3.H.5 was added back to the PWS.

89 PWS 3.B.5.1 - Direct Booking

Direct Bookers must remain liable for providing reasonable RDDs. Recommend:

Add language to confirm Direct Bookers are accountable for IBS updates for all bookings, amendments, RDD, routings, and updates related to BRT and DRAP, with possible language that will address the specific consequences when they fail to do so.