USC8_Q As_26_Jun_15.pdf

# RFP Section Para # Question Government Response

CARE II N/A

I was looking at the ‘Single Factor Requirement Excel Report’ on the CARE II page and we noticed the San Joaquin, CA origin wasn’t a listed lane up for bid. Was this an oversight or are we missing something here?

The San Joaquin City Group in USC-7 does not exist in USC-8.

Its localities are in other City Groups, usually Stockton. Please see

Exhibit 3, Attachment 4 for details.

412 Exhibit 2

2.1

Our risk management/insurance folks need specific information regarding the government’s intention to deviate from the standard $500 COGSA package limit to advise if it is even possible and what pricing effects it will have. Can you please provide the proposed language which we can submit to our insurance providers and risk managers?

The United Nations Commission on International Trade Law

(UNCITRAL) Convention on the Carriage of Goods Wholly or

Partly by Sea (the Convention) package limitation provisions shall substitute for, or otherwise stand in the place of the COGSA package limitation for the purpose of determining the limits of a

Contractor’s liability for loss or damage to US Government cargo arising at any time in the custody of the Contractor. This raises the liability limitation from $500 per package to $925 per package. Language will be clarified in the next amendment.

413 Exhibit 3, PWS, Attachment 3

1.3.2

DTOD - There are verbal guidelines about what settings to use and understandings, but these get confused now and then as people come and go and memories lapse depending on circumstances and situation. The problem is the distances between two points can vary depending on settings and choices.

Can a meeting occur and clear guidelines be presented (and documented) as to what settings are to used by everyone so there is no misunderstanding and these be written and distributed so everyone is on the same page? This does not have to be written into the contract, just something we can all work with and refer to from time to time. Some confusing areas include:

Preselecting one of these types: (each with their own distance):

ROUTE TYPE:

PERSONAL FREIGHT (THE DEFAULT)

GENERAL FREIGHT

OW/OD FREIGHT

HAZ MAT FREIGHT

Choose Origin/Destination:

City, Location (Assumption is we are to use location without zip code, but it is not documented)

Zip Code

Some Military locations in Europe are listed – should they be used instead of the City?

And Always use FIPS (just for good order) There is an International Carrier Day scheduled from 25-27 Aug

15. SDDC is considering adding this topic to the agenda.

414 CARE II

N/A

The lane from Korea to Kwajalein is not in the list. The only one on the list for which we have a usc-07 oy2 rate is Kwan to SF Bay area. The singe factor rate Korea to Kwajalein moves all the AAFES merchandise that supports its store on Kwajalein? This is currently under review.

415 Exhibit 2 2.1.3 Where does UNCITRAL apply in relation to COGSA? In USC-07, the clause read that UNCITRAL would apply upon Senate approval - is that still the case? Is the conversion to UNCITRAL still pending?

The United Nations Commission on International Trade Law

(UNCITRAL) Convention on the Carriage of Goods Wholly or

Partly by Sea (the Convention) package limitation provisions shall substitute for, or otherwise stand in the place of the COGSA package limitation for the purpose of determining the limits of a

Contractor’s liability for loss or damage to US Government cargo arising at any time in the custody of the Contractor. This raises the liability limitation from $500 per package to $925 per package. Language will be clarified in the next amendment.

USC-8 RFP HTC711-15-R-W002

RFP QUESTIONS

416 Exhibit 2 2.1.5 The "Increased Liability" accessorial provisions have not been provided to carriers for review prior to the Final RFP. Because the accessorial is to be input into the rate guide for each liability ceiling, without consideration for POE/POD or routing, and applies the ceiling to an entire "booking", we need additional time to analyze this provision. We have also reached out to its P&I insurer to determine whether this approach is feasible from an insurance perspective. Considering the issues above, and the complexities of this liability regime as applied to a global contract, we request additional time to analyze this provision.

Language will be revised in the next amendment. If a customer requires additional coverage for their cargo, tiered liability will be ordered and solicited via the one time only process. This will allow carriers to bid the tiered liability at the time the requirements are known. This language will apply to exigency and nonexigency areas.

417 Exhibit 3, PWS, Attachment 1

Additional

Rules for AV

Transaction

Does the term "requested" infer that we will have to begin using the AV option within DRAP for Door moves in Exigency Areas. Today in Afghanistan and Pakistan only we Auto Trigger AV.

The AV will be a required EDI transaction if driver wait time is needed in an exigency area. This would not be done through

DRAP. In this case, the term "requested" is intended to mean

"submitted."

418 Exhibit 3, PWS, Attachment 1

RA Event Is it anticipated that all USG facilities will be required to submit an RA event for all empty notifications?

The RA event is a system-generated transaction based on user entry of a notification into the Joint Container Management

Container Return Module. In accordance with Exhibit 3, paragraph 3.G.4.1.5, "During the course of USC-8, the

Government will be implementing system automation through a

Container Return Management module that will support

Government and Contractor interaction with system-entered reporting of empty containers and requesting pickup, with the dates documented by the system serving as the official notification date/time unless the Contractor has received earlier written notice from the U.S. Government. Based on implementation timelines, under USC-8 notifications will either be done through CRM, via

CMM where implemented, or via email with a corresponding

Government entry in GATES. Ultimately, all notifications will be done via CRM."

419 Exhibit 3, PWS, Attachment 7

BAF What is the expectation for where and how the calculation will be conducted?

If a fuel payment is due, the BAF formula is referenced in Exhibit

3, Attachment 7, paragraph 1.1.

420 Exhibit 3, Performance

Work Statement

& Exigency

Annex

Multiple

We object to the various provisions relating to the purchase of containers for the following reasons: 1. As a preliminary matter, container carriers are not in the business of “renting” or selling its critical capital assets (containers) to its customers. Our business model demands that we receive our containers back as quickly as possible so that our intermodal network can operate efficiently and effectively. Accordingly, it is standard commercial practice to assess detention charges as liquidated damages that are sufficient both to compensate the carrier for all of the adverse cost impact caused by delays (or failure) to return containers and to incentivize shippers to adhere to contractual timelines. Over the years, USC carriers have substantially lowered its overall unit charges to DOD for containers that are not returned by providing for buyouts (originally at prices based on competitively set Container Management Contract prices and subsequently discounted by 10 percent) and by allocating a portion of paid detention charges to qualify as a “credit” against the buyout prices. The USC-8 provisions, however, go way too far by arbitrarily lowering by 28 to 55 percent the gross compensation to carriers for DOD appropriating the carrier’s capital assets. These provisions essentially subsidize DOD’s apparent inability to manage intermodal equipment properly. 2. The “Replacement Value Costs” are too low and do not even cover our historical purchase prices, which represents only part of our costs associated with containers that are not returned by the shipper. In addition to the capital costs, we incur repositioning costs (both at the location where the container left the network and where the new container will enter the network), operational disruption costs, lost opportunity costs (particularly with reefer containers), transaction costs, taxes, and administrative costs. TRANSCOM has provided no basis for its numbers and has refused to provide the unit prices from its container management contract (which are disclosed during debriefs under FAR 15.506(d)(2)) for comparative purposes.

The current replacement value is currently under review; however, the DOD will not pay more than the final container's replacement value per OSD's guidance.

421 Exhibit 3, Performance

Work Statement

& Exigency

Annex

Multiple

3. The purpose of detention is not to be a down payment for purchasing containers. However, that is essentially the function of the USC8 provisions.

These provisions create a tipping point at 30 days where it starts to come facially more advantageous for DOD to keep containers because their daily detention costs begin to decrease. The table below illustrates the most stark example by comparing the financial impact to the carrier of the detention purchase provisions on the day before the container hits “max cap” and the day the container hits “max cap.” Instead of creating an incentive for DOD to return containers promptly, it imposes a financial penalty on carriers when DOD fails to return containers within the “max cap.” Moreover, it imposes a hidden cost on DOD to maintain/dispose of an asset for which it likely does not have a long term need. In addition, it will expand the administrative nightmare that already exists when DOD returns containers that pass the max cap back into commercial networks.

4. DOD’s focus should be on fixing its container management capabilities rather than unilaterally shifting the costs of container management to the carriers. The provisions do nothing to address the underlying driver – DOD’s appetite for containers. Indeed, the provisions effectively enable bad habits. The carriers are willing to work with TRANSCOM to develop a better mouse trap, but TRANSCOM has to better define its requirements. It is unreasonable to want the best of both worlds – a “pay-as-you-go” detention charge with the ability to retroactively enjoy all of the benefits of ownership.

The USC8 model has no analogy in the commercial world of renting/leasing/buying equipment. We request that TRANSCOM revert to the USC7 provisions.

The current replacement value is currently under review; however, the DOD will not pay more than the final container's replacement value per OSD's guidance.

Exhibit 3, PWS, Attachment 7

N/A

I see BAF is being eliminated. Will the FAF be eliminated as well?

The BAF and FAF language is included in Exhibit 3, Attachment

7.

423 Exhibit 3, Performance

Work Statement

Section 8 Is anything else getting rolled into the Liner Terms besides the Inoperable Vehicle Surcharge? No.

424 Exhibit 3, Performance

Work Statement

On Port to Port container moves, I understand carriers will now be allowed to charge a chassis surcharge. Being a RORO vessel, we typically use flatbeds to act as a chassis. It’s the same idea and service as a chassis, but with a flatbed used instead. Will we still be able to charge a chassis surcharge when this occurs?

The chassis language is currently under review; however, this accessorial would only apply to a container (not breakbulk) booking made on a from-port basis, with carrier equipment

(chassis) being used to move the container from origin to the POE.

Therefore, it does not apply to the circumstances described.

Exhibit 3, PWS, Attachment 7 1.2

BAF – The base line must remain the same and the new technical factors must be revised after Volpe makes the required adjustments based on the carriers input.

An independent party performed a study to develop the new technical factors. The agency sought for and considered information provided by Industry. The intent behind the study was not to eliminate BAF. Additionally, General Fraser issued a

Memorandum directing the Acquisition Executive to rebaseline

BAF annually. Readjusting the fuel baseline to current market values reflects a sharing of fuel volatility risk between the

Government and Industry.

426 Exhibit 3, Performance

Work Statement

3.A.14

Chassis – The carriers are out of the chassis business and cannot provide chassis for port bookings. We can provide chassis for door bookings, including container pools but we need to be compensated for chassis at pool locations. We are proposing a chassis surcharge for pool locations, of $150 per container. This is the prevailing market rate of $15 per day, for an average of 10 days dwell at pool locations.

This is currently under review.

427 Exhibit 3, Performance

Work Statement 3.F.1.6 &

3.F.1.8.

Proof of Delivery – We cannot provide proof of delivery receipts at non-exigency destinations. The requirement is impossible to implement and falls outside of commercial practice. The requirement needs to be deleted for non-exigency areas.

This is currently under review.

428 Exigency Annex

B.1

Shipper owned containers/mandatory acceptance of bookings – the carriers require booking acceptance at their discretion of SOC bookings in excess of

200. If the carriers agree to accept SOC bookings above 200, a 40% surcharge shall be applied. This rate has already been accepted in VISA and further encourages the volunteer requirement before activation. This is currently under review.

429 Exhibit 3, Performance

Work Statement

& Exigency

Annex

Multiple

Equipment Detention and Purchase – carrier supports retaining the current USC-7 language and is willing to concede 20 detention days from the automatic purchase provision to decrease the “maxcap” in the spirit of partnership.

The current replacement value is currently under review; however, the DOD will not pay more than the final container's replacement value per OSD's guidance.

Exhibit 1 52-212-1, (b.1)(4)

Submission of offers for Volume III Past Performance - are the past performance references supposed to be the same two references that the Carriers use for the Past Performance Questionnaires?

In accordance with Exhibit 1, 52.212-1(b.1)(4)(ii), "The offeror shall send out a Past Performance Questionnaire to each of the offeror's references identified in their proposal…"

Exhibit 1

Attachment 2

Also, that the (a) On Time Delivery, (b) Quality of EDI, (c) Consistency and Reliability of Service and (d) Loss of and/or damage to Shipments under

Past Performance Information Volume III is the criteria in which the Carrier’s Two References will evaluate the Carrier but this data is not required by the Carrier in the proposal?

The past performance questionnaire addresses (a) On Time

Delivery, (b) Quality of EDI, (c) Consistency and Reliability of

Service and (d) Loss of and/or damage to Shipments.

432 General

Please advise whether FAR Clause 52.209-7, Information Regarding Responsibility Matters is to be included in our proposal.

Contractors are required to include FAR 52.209-7, Information

Regarding Responsibility Matters, in their proposal.

433 Exhibit 1

52-212-1, (b.1)(4)

(4) Past Performance Information - Part (i) Please confirm the offeror is only to submit two references (name of company or agency, point of contact and phone number) and the references, not the offeror, are to provide past performance information regarding:

(a) On-Time Delivery; (b) Quality of EDI data; (c) Consistency and reliability of service; (d) Loss of and/or damage to shipments. That is correct.

434 Exhibit 1

N/A

In reviewing the information that we will need to submit under Volume IV for the Small Business Proposal, it states that offerors shall submit a SB

Subcontracting Plan in accordance with FAR 19.7, FAR 52.219-9, DFARS 219.7, and DFARS 252.219-7003. We have a commercial plan in place today that has been prepared for the current year and includes all our current contracts for USTRANSCOM. Can we submit this same plan under the

USC-8 solicitation to satisfy this Volume IV requirement? Or do we need to update our current plan to add the USC-8 even though this contract will not become effective until December?

For this situation, contractors do not need to update their plan;

they may submit the current plan to satisfy the requirement