7_MM-3_Att_7_-_Prime_Vendor_DRAFT_20Sep.pdf

Attachment 13, Prime Vendor/MM Carrier Agreement

HTC711-19-R-W002

September 20, 2018

SHIPMENTS OF DLA PRIME VENDOR CARGO

1. Special Provisions for Defense Logistics Agency (DLA) Prime Vendor Program

1.1 Background.

DLA has entered into contracts with various suppliers and distributors under a “Prime Vendor” program for the supply of various commodities to U.S. Government agencies. These contracts support DLA customers in geographic locations worldwide. The Defense Distribution Center (DDC), is an authorized ordering office for Prime Vendor Shipments through DLA under this contract. The items are shipped overseas under the MM contract via ocean and air transportation ordered through DDC. Under the terms of the DLA Prime Vendor contracts, ownership and title to these items, remains with the Prime Vendor while the items move within the Defense Transportation System (DTS).

MM carriers deliver Prime Vendor cargo to the Prime Vendor rather than delivering cargo to the U.S. Government.

For Operational Rations (OPRATs) or Government Furnished Material (GFM), title transfers to the Government once cargo is shipped, therefore, the following terms do not apply.

1.2 Contractual Intent. Generally, the terms, conditions and prices of this contract shall apply equally to the transportation of both Government owned and non-Government owned cargo. For example, the standard of liability of a MM Contractor for loss/damage to cargo is the same in both situations. Also, compensation due the MM Contractor for detention of carrier containers, for port storage, for reefer maintenance, and other matters (see paragraph 1.6 below), is the same in both situations. However, experience has demonstrated to the Government that certain matters are properly handled directly between a Prime Vendor and a MM Contractor (the real parties in interest) where non-Government cargo in involved. These matters include:

a) Claims procedures and claims dispute resolution procedures related to Prime Vendor cargo and Prime Vendor claims against a MM Contractor for loss/damage to Prime Vendor cargo;

b) MM Contractor claims against a Prime Vendor for loss/damage to MM Contractor equipment;

c) MM Contractor claims against a Prime Vendor for detention of MM Contractor equipment;

d) MM Contractor claims against a Prime Vendor for port storage charges (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor);

e) MM Contractor claims against a Prime Vendor for trucker wait time (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor);

f) MM Contractor claims against a Prime Vendor for reefer maintenance (e.g. while reefer in custody of Prime Vendor, or cargo delayed through fault of Prime Vendor or request of Prime Vendor); and,

g) Claims between the Prime Vendor and MM Contractor for services not ordered by the Government

This stands to reason because the Prime Vendor owns the cargo and because only the Prime Vendor and a MM Contractor have specific, factual knowledge and evidence related to such matters and the delivery location, DLA’s Prime Vendor contracts involving the cargo movements outside of the Continental United States (OCONUS) require the Prime Vendor to sign an agreement (which the MM Contractor may accept and seek to supplement) establishing a minimum level of claims processing and dispute resolution procedures. This contract requires the carrier to accept a minimum level agreement to be eligible for the carriage of Prime Vendor cargo OCONUS. The contractual intent is for the Prime Vendor and the MM Contractor to address/resolve such matters directly with each other. The Government customer can be harmed when procedures for resolving such matters between the Prime Vendor and a MM Contractor are not established and problems are not resolved directly between the Prime Vendor and the MM Contractor.

1.2.1 The U.S. Government shall not be liable for loss or damage to Prime Vendor cargo. Any discrepancy report or notice of claim for such loss or damage shall be submitted by the DLA Prime Vendor directly to the MM Contractor for resolution, not to DLA or USTRANSCOM. The MM Contractor shall accept such discrepancy report or notice of claim for such loss or damage from the DLA Prime Vendor, as well as any other communications regarding such loss or damage.

The Prime Vendor shall submit any claims related to the above directly to the MM Carrier

1.2.2 The U.S Government shall not be liable for MM Contractor claims against a Prime Vendor for loss/damage to MM Contractor equipment; MM Contractor claims against a Prime Vendor for detention of MM Contractor equipment; MM Contractor claims against a Prime Vendor for port storage charges (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor); MM Contractor claims against a Prime Vendor for trucker wait time (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor); MM Contractor claims against a Prime Vendor for reefer maintenance (e.g. while reefer in custody of Prime Vendor, or cargo delayed through fault of Prime Vendor or request of Prime Vendor); and claims between the Prime Vendor and MM Contractor for services not ordered by the Government).. The MM Contractor shall submit directly to the Prime Vendor, with copy to the MM Contracting Officer, any claim for damage, detention, port storage, reefer maintenance, or services not ordered by the U.S. Government. If the MM Contractor is unable to communicate directly with the Prime Vendor for any reason, the MM Contractor shall so advise the MM Contracting Officer. In those instances, or instances where the resolution of Prime Vendor / MM Carrier claims is at an impasse, the MM Contracting Officer will function (in coordination with other Government agencies as appropriate) as a facilitator in order to bring the parties together and work towards resolution of the claim(s).

1.2.3 Notwithstanding the provisions of 1.2.2 above, the MM Contractor may pursue any rights it may have under this contract and may file a claim with the MM Contracting Officer under the terms of this contract in connection with the transportation of Prime Vendor cargo. An example of such a situation could be where Government action harms the MM Contractor with respect to Prime Vendor cargo transportation and some other part of this contract provides a remedy.

1.2.4 The Contractor and the Prime Vendor should include any common issues not delineated above in their Prime Vendor/MM Carrier Agreements.

1.2.5 Failure of the Prime Vendor to Satisfy an Arbitral Award, Judgment, or Binding Alternate Dispute Resolution (ADR) Decision

(i) The MM Contractor may, at any time after the MM Contractor has initiated arbitration, a lawsuit, or demand for binding ADR against a Prime Vendor for amounts due to the MM Contractor by the Prime Vendor, request in writing that the Government agree to guarantee payment in the amount stated in the demand (excluding any amount for dispute resolution proceeding costs, including attorney fees) for arbitration, lawsuit, or demand for binding ADR. Within thirty (30) days of receiving such a request, the Government may, in its sole discretion, either:

(1) by modification issue a guarantee to the MM Contractor in the amount of the arbitral demand made by the MM Contractor against the Prime Vendor, or (2) in writing deny such request for a guarantee. In the event that the Government issues a guarantee as described above, payment under that guarantee shall become due thirty (30) days after the MM Contractor provides to the Government a copy of the arbitral award, judgment or binding ADR decision in the MM Contractor’s favor, along with a certification that the Prime Vendor has not satisfied such award, judgment or binding ADR decision within thirty (30) days of its effective date. The amount of the payment due shall be the amount of the arbitral award, judgment or binding ADR decision (excluding any amount for dispute resolution proceeding costs, including attorney fees), not to exceed the amount set forth in the arbitral demand or any amended arbitral demand, lawsuit, or demand for binding ADR. If the Government instead elects to deny the issuance of a guarantee, then upon such denial the MM Contractor shall be relieved of its obligation to accept any bookings for cargo tendered for shipment by or on behalf of the Prime Vendor and, if requested bookings are denied, the Government is free to use other carriers. If the Government fails to respond in writing to a request for a guarantee within thirty (30) days of receipt of such request, then such failure shall be treated as a denial of the request, and the MM Contractor shall be relieved of its obligation to accept any bookings for cargo tendered by or on behalf of the Prime Vendor and, if requested bookings are denied, the Government is free to use other carriers.

(ii) In the event that the Government actually makes payment under a guarantee issued under subsections

(i) of this section 1.2.4, the Government shall have a right to assert the Contractor’s claim, up to the amount of its payment to the Contractor, against the party whose failure to pay a final arbitral award, judgment, or binding ADR decision resulted in the Government’s obligation to pay under the relevant guarantee.

(iii) The MM Contractor agrees to cooperate with Government efforts to resolve a claim against the party whose failure to pay a final arbitral award, judgment, or binding ADR decision resulted in the Government’s obligation to pay under the relevant guarantee. This includes providing documents/correspondence relevant to the claim, producing personnel with knowledge of the claim, and advising on industry practices.

1.3 Third-Party Agreement. Under the terms of the DLA Prime Vendor contracts, the Prime Vendor will execute a minimum level agreement which can be accepted or expanded by negotiation. The required format for the minimum level Prime Vendor/MM Carrier Agreement is provided below. As detailed below, the MM Contractor is required to accept and sign an agreement with the applicable Prime Vendor to be eligible to move Prime Vendor cargo.

1.3.1 Prime Vendor and MM Contractor Agreements In order to be eligible for movement of Prime Vendor cargo, the MM Contractor must , after notification of an award for Prime Vendor cargo movement, and upon request by the MM Contracting Officer, the MM Contractor shall enter into a written agreement with the Prime Vendor which shall, as a minimum, use the Prime Vendor/ MM Carrier Agreement (See Attachment 13) to define procedures to submit and process claims and resolve disputes arising in connection with U.S. Government ordered transportation services for non-Government owned cargo. The Prime Vendor/ MM Carrier Agreement (See Attachment 13) is the minimum instrument required to address the matters described in 1.2.1 and 1.2.2. A copy of the agreement and any negotiated supplemental language in respect thereof or changes thereto, shall be furnished to the MM Contracting Officer. Any agreement that does not, as a minimum, use the Prime Vendor/ MM Carrier Agreement (See Attachment 13) to define procedures to submit and process claims and to resolve disputes arising in connection with U.S. Government ordered transportation services for non-Government owned cargo in accordance with 1.2.1 and 1.2.2 above will be rejected by the MM Contracting Officer making that MM Contractor ineligible to transport Prime Vendor cargo on. No MM Contractor will receive a task order to move Prime Vendor cargo under this contract without an approved Prime Vendor Agreement. The MM carrier and Prime Vendor may (but are not required to) supplement this minimum level of agreement with additional or more specific terms and conditions consistent with this Agreement.

1.4 Supplementation Encouraged. The MM Contractor is encouraged, but not required, to supplement the terms of the sample agreement located in paragraph 2 with each Prime Vendor by providing additional details, more specific procedures, or other terms that will facilitate claims processing and dispute resolution. Supplementary language must be consistent with this Attachment. A copy of any supplemental terms must be provided to the MM Contracting Officer. In negotiating any agreement, the MM Contractor should consider that the Prime Vendor may exercise a right of setoff, if any exists, involving a commercial contract or other remedial action against the MM Contractor. Similarly, the MM Contractor may take remedial action or other actions to protect its interests against the Prime Vendor, including the assertion of a lien, if any exists, on Prime Vendor cargo.

1.5 Third Party Beneficiary. As noted in Section 1.2, except for the subjects covered in Sections 1.2 and 1.3 (claims procedures and claims dispute resolution procedures related to Prime Vendor cargo, including Prime Vendor claims against a MM Contractor for loss/damage to Prime Vendor cargo; MM Contractor claims against a Prime Vendor for loss/damage to MM Contractor equipment; MM Contractor claims against a Prime Vendor for detention of MM Contractor equipment; MM Contractor claims against a Prime Vendor for port storage charges (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor); MM Contractor claims against a Prime Vendor for trucker wait time (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor);

MM Contractor claims against a Prime Vendor for reefer maintenance (e.g. while reefer in custody of Prime Vendor, or cargo delayed through fault of Prime Vendor or request of Prime Vendor); and claims between the Prime Vendor and MM Contractor for services not ordered by the Government), and procedures for ending container detention charges) and except for the modified provisions described in 1.6 or other exceptions specified elsewhere in this contract, the terms, conditions and prices of this MM contract apply equally to the transportation of both Government owned and non-Government owned cargo. The Prime Vendor/MM Carrier Agreement incorporates the MM-9 Contract by reference.

1.5.1 Prime Vendor as Third Party Beneficiary. The Prime Vendor is an express third party beneficiary of the terms, conditions, and prices of this MM-9 contract when it describes the rights and obligations between the Prime Vendor and MM Contractor. See the list of subjects at 1.5 and the modified provisions of 1.6. The Prime Vendor’s rights as a Third Party Beneficiary exist (and could be most useful) in the absence of a Prime Vendor/MM Carrier Agreement. A third party beneficiary is not subject to amendments and modifications of this contract and relevant DLA Prime Vendor contracts.

1.5.2 Carrier as Third Party Beneficiary. The MM Contractor is an express beneficiary of the terms, conditions and prices of the DLA Prime Vendor contract when it describes the rights and obligations between the Prime Vendor and MM Contractor, including descriptions in this contract incorporated by reference into the DLA contract.

The MM Contractor’s rights as a Third Party Beneficiary exist (and could be most useful) in the absence of a Prime Vendor/Carrier Agreement. A third party beneficiary is not subject to amendments and modifications of this contract and relevant DLA Prime Vendor contracts.

1.6 Other MM Provisions Impacted by the Special Provisions for the DLA Prime Vendor Program.

Unless specified elsewhere in this contract, the terms of Attachment 12, including the additional items below, are the only variations in MM terms and conditions applicable to the transportation of cargo in the DLA Prime Vendor Program. The purpose of these variations is to acknowledge that such transportation involves Prime Vendor-owned cargo, not Government-owned cargo; that MM carriers deliver cargo back to the Prime Vendor, not to the Government; and that the real parties in interest for Prime Vendor cargo movements are generally the Prime Vendor and the MM Contractor, not the Government.

a) Paragraph (d) of FAR 52.212-4, is supplemented in accord with Section 1.4.

b) FAR 52.233-4 does not apply to claims of breach of the business agreement between the Prime

Vendor and the MM Contractor.

c) The Prime Vendor, not the Government, reimburses the MM Contractor for onward movement delays cause by the Prime Vendor.

d) The Prime Vendor and the MM Contractor are required to develop their own invoicing and payment procedures. The Prime Vendor and the MM Contractor may develop their own reports and formats.

1.7 The DLA Contracting Officer will deliver a signed Prime Vendor/MM Carrier Agreement executed by the Prime Vendor to the MM Contracting Officer when a specific Prime Vendor is awarded a DLA Prime Vendor contract. The DLA Contracting Officer shall also provide the name, address, and contact information for the specific Prime Vendor, as necessary. The MM Contracting Officer will forward the agreement to the MM Contractors who have accepted rates for the Prime Vendor location(s). Once the MM Contractor has signed the agreement(s), the signed agreement(s) is forwarded to the Prime Vendor with a copy forwarded to the MM Contracting Officer.

PRIME VENDOR/MM CARRIER AGREEMENT

WHEREAS, components of the Defense Logistics Agency (DLA) have entered into contracts with various suppliers and distributors under a “Prime Vendor” (PV) program to supply various commodities to U.S. Government agencies and under this program the PVs retain title to such commodities until final delivery;

WHEREAS, DLA’s PV contracts permit components of DLA to order transportation services from commercial carriers under a contract with the United States Transportation Command (USTRANSCOM) known as the Commercial Multimodal (MM) Transportation;

WHEREAS, MM carriers transport PV commodities and return them to PVs at a different location prior to delivery of same by the PV to U.S. Government agencies;

WHEREAS, past experience has demonstrated that PVs and carriers may disagree about claims procedures and claims dispute resolution procedures related to Prime Vendor cargo, including Prime Vendor claims against a MM Contractor for loss/damage to Prime Vendor cargo; MM Contractor claims against a Prime Vendor for loss/damage to MM Contractor equipment; MM Contractor claims against a Prime Vendor for detention of MM Contractor equipment; MM Contractor claims against a Prime Vendor for port storage charges (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor); MM Contractor claims against a Prime Vendor for trucker wait time (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor); MM Contractor claims against a Prime Vendor for reefer maintenance (e.g. while reefer in custody of Prime Vendor, or cargo delayed through fault of Prime Vendor or request of Prime Vendor); and claims between the Prime Vendor and MM Contractor for services not ordered by the Government;

WHEREAS, ____________________________________________(hereinafter referred to as The Prime Vendor) has been awarded contract number _______________________________ by ________________________________________________ for the supply of PV cargo;

WHEREAS, one or more carriers under the MM contract may serve the geographical area covered by said contract and transport PV commodities intended for performance of said contract;

NOW, THEREFORE, in consideration of the mutual promises herein and for the purpose of facilitating minimum standards for the processing of claims and the resolution of disputes between The Prime Vendor and applicable MM carriers, The Prime Vendor and any MM carrier accepting the terms of this Agreement (hereinafter referred to as Accepting MM Carrier) agree as follows:

1. The Prime Vendor will submit directly to the Accepting MM Carrier (not to DLA or USTRANSCOM) for resolution any discrepancy report or notice of claim for loss/damage to PV cargo, for services not ordered by DLA/USTRANSCOM, or for ending container detention charges or other matters. The Accepting MM Carrier shall accept such report/notice and both parties agree to communicate with each other regarding the processing of claims. The parties may (but are not required to) supplement this minimum level of agreement with additional or more specific terms and conditions consistent with this Agreement and Attachment 8 of the PWS of the MM contract.

2. The Accepting MM Carrier will submit to the Prime Vendor (not to DLA or USTRANSCOM) for resolution any notice of claim for equipment loss/damage, container detention, maintenance of refrigerated containers, port storage, services not ordered by DLA/USTRANSCOM, procedures for ending container detention charges, or other matters. The Prime Vendor shall accept such notice of claims and both parties agree to communicate with each other regarding the processing of claims. The parties may (but are not required to) supplement this minimum level of agreement with additional or more specific terms and conditions consistent with this Agreement and Attachment 12 of the MM contract.

3. When the claims process does not lead to resolution of the claim, the parties agree to initiate some form of dispute resolution process (which could include direct negotiation, alternative dispute resolution, court action, etc.) that does not involve the U.S. Government (including LA/USTRANSCOM.) The parties may (but are not required to) supplement this minimum level of agreement with additional or more specific terms and conditions consistent with this Agreement and Attachment 12 of the MM contract.

4. The Prime Vendor and the Accepting MM Carrier will notify their respective Contracting Officers of any refusal to communicate regarding the processing of a claim and of any failure to attempt to resolve a dispute.

5. The Prime Vendor and the Accepting MM Carrier acknowledge that the terms of their contracts with the U.S. Government (DLA and USTRANSCOM respectively) generally preclude liability of the Government for the following: Prime Vendor claims against a MM Contractor for loss/damage to Prime Vendor cargo; MM Contractor claims against a Prime Vendor for loss/damage to MM Contractor equipment; MM Contractor claims against a Prime Vendor for detention of MM Contractor equipment; MM Contractor claims against a Prime Vendor for port storage charges (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor); MM Contractor claims against a Prime Vendor for trucker wait time (e.g. while cargo delayed through fault of Prime Vendor or request of Prime Vendor); MM Contractor claims against a Prime Vendor for reefer maintenance (e.g. while reefer in custody of Prime Vendor, or cargo delayed through fault of Prime Vendor or request of Prime Vendor); and claims between the Prime Vendor and MM Contractor for services not ordered by the Government.

6. The parties acknowledge that the terms of the MM contract are applicable to this Agreement and incorporate by reference into this Agreement the MM contract in force at the time PV cargo is booked.

For example, the standard of liability of an Accepting MM Carrier for loss/damage to PV cargo is the same as the standard of liability of a MM carrier for loss/damage to government-owned cargo under MM. Similarly, the compensation due an Accepting MM Carrier for damage to its equipment, detention of its containers, port storage of its equipment, and maintenance of its refrigerated containers is the same as the compensation due to a MM Carrier for such matters under MM. Section 1.6 of Attachment 12 to the MM contract describes specific provisions of the MM contract that are modified to acknowledge that the transportation described herein involves PV cargo, not government-owned cargo;

that MM carriers deliver cargo back to the PV, not to the Government; and that the real parties in interest for PV cargo movements are generally the PV and the MM carrier, not the Government.

XXXXXXXX XXXXXXXXX, INC.

“The Prime Vendor ____________________________________ Date:

By:

Title:

The undersigned, an authorized representative of YYYYYYYYYYYYYY YYYYYYYYY, INC., hereby accepts and agrees to the terms and provisions above of this Agreement.

YYYYYYYYYYYYYYYYYY YYYYYYYY, INC.

“Accepting MM Carrier”

_____________________________________ Date:

By:

Title:

SUPPLEMENTAL TERMS AND CONDITIONS

(If the parties agree to supplement this minimum level of agreement with additional or more specific terms and conditions consistent with this Agreement and Attachment 12 of the MM contract, the parties may record their supplemental agreement below OR may record it elsewhere.)