2024.04.26 VTA Terms & Conditions_Tracked Changes.docx

Voluntary Tanker Agreement (VTA) Common Charter Terms & Conditions

1. Preface

This contingency contract implements the Voluntary Tanker Agreement (VTA) as defined in the Federal Register dated 7 November 2022 and provides for sealift services that may arise in any part of the world. The general scope of services under this contract includes the provision of ocean transportation charter of clean bulk fuel product for worldwide ocean movements and as the Secretary of Defense may determine to be necessary, seeking to minimize disruption of the program participants service to commercial customers. For the purposes of this contract, as also defined in the VTA, Contingency includes, but is not limited to a “contingency operation” as defined at 10 U.S.C. section 101(a)(13), and a Joint Chiefs of Staff-directed, National Command Authority-approved action undertaken with military forces in response to: (i) natural disasters; (ii) terrorists or subversive activities; or (iii) required military operations, whether or not there is a declaration of war or national emergency.” This contract also is to provide such services on a bilateral basis prior to a contingency for the purpose of testing and exercising VTA. The Contractor shall maintain the highest possible on-time performance rate.

2. VTA Capacity Enrollment Terms

A. Background

1) Contractors are offered an opportunity to enroll specific tanker capacity, for activation as the USTRANSCOM may determine to be necessary, into the VTA program. Contractors receiving certain subsidies from the Government must enroll subsidized capacity into an Emergency Preparedness Program, VTA. For example, in accordance with section 2. A. 4) of VTA, this contract obligates a contractor receiving payments under the Tanker Security Program (TSP) to make vessels covered by a TSP operating agreement available during activation of VTA to DoD. According to the Maritime Administrator, such obligation shall satisfy TSP requirements for contractor enrollment in an Emergency Preparedness Program. Enrollment in VTA involves two sequential steps: execution of the application with the Maritime Administration (MARAD) and bilateral execution of this contingency contract with USTRANSCOM.

2) Upon bilateral execution of this contingency contract, a contractor becomes a VTA “Participant” and receives a priority, as described in section III.A.3 of VTA, as a VTA “Participant” for award of DoD peacetime cargo.

3) Activation of VTA shall be in accord with section V of VTA. The decision to activate or deactivate VTA will be made by the USTRANSCOM Commander. DoD's primary goal in activating or deactivating VTA is to meet operational requirements, while facilitating the use of existing, commercial capacity and minimizing disruption to commercial operations whenever possible.

4) In furtherance of the Government’s minimum requirements for a sealift emergency preparedness program and in consideration of the Contractor’s commitment of specific capacity and related resources (as detailed herein), the Contractor’s receipt of Government subsidy (if applicable), and the Contractor's priority consideration for award of certain DoD contracts, the Government and the Contractor agree as follows:

B. Capacity Commitment

1) VTA defines a commitment for a participant as 100% of U.S. Flag controlled, clean product tonnage to include medium range (MR) tankers, ITBs and ATBs of over 20,000 DWT capacity, unless otherwise agreed to by MARAD and USTRANSCOM, which are useful in the transportation of refined cargoes pursuant to the requirements of associated war plans. Contractor’s capacity commitment as set forth in Attachment 1 of this contract was described in terms of “militarily planning capacity”, which was computed in the following manner:

a. Tank vessels: Capacity is measured in barrels and cubic meters (m3) @ 98% full

b. ITBs and ATBs: Capacity is measured in barrels and cubic meters (m3) @ 98% full

2) Attachment 1 of the VTA Contingency Contract lists the Contractor’s U.S. Flag vessel capacity in which the Contractor hereby commits to VTA. Committed capacity is expected to be maintained for USTRANSCOM contingency planning purposes. However, if any change in the Contractor’s U.S. Flag fleet is necessary during the period of this contract, a minimum 30-day advance notice shall be provided to USTRANSCOM identifying the change and a revised Attachment 1 indicating the new commitment will be issued via a contract modification.

In calculating a participant’s commitment, the Government and the Contractor used the following business rules:

a. 100% of a participant’s entire U.S. flag capacity, subsidized and unsubsidized, not engaged in domestic trade (Jones Act capacity) plus 50% of a participant’s capacity that is engaged in the domestic trade (Jones Act capacity).

b. The capacity of a vessel under charter to DoD for 180 calendar days or more will not be counted toward the contingency commitment during the period of the charter.

3. Business Rules

A. Peacetime Contracts

Existing DoD contracts executed by MSC will remain in effect during the stated contract period. These contracts will be used to move DoD cargo into a contingency theater during the volunteer stage and other delivery points outside the contingency theater during activation as defined in peacetime contracts.

During an activation of VTA this contract shall be used to move cargo in support of a contingencies.

B. Voluntary Phase

1) Voluntary Capacity

a. The DoD will use peacetime contracts to move contingency cargoes when they meet the capacity and delivery requirements. DoD may issue a request for volunteers to provide additional service when MSC commitments cannot satisfy contingency capacity and delivery requirements.

b. Requests for volunteers may be issued to all potential offerors including non-participants and foreign flag operators. DoD selection of volunteers will be based on operational requirements and the Secretary of Defense approved priorities for the award of sealift contracts, which are incorporated in VTA.

c. DoD may use the volunteer stage to obtain additional services to meet contingency operational requirements. The volunteer stage will not be used by contracting personnel to renegotiate existing peacetime or USTRANSCOM VTA contingency contract rates. VTA participants with existing MSC contracts that can satisfy DoD’s requirements shall receive priority over contractors without such contracts. New offers of service will be treated as late rates that receive last priority for use provided participant services meet DoD’s contingency requirements.

d. Where appropriate, DoD may approve requests by VTA Participants to convert voluntary commitments to the USTRANSCOM VTA contingency contract rates, terms, and conditions.

C. VTA Activation

1) VTA Activation.

a. VTA may be activated at the request of the USTRANSCOM Commander, with the approval of SecDef, as required to support contingency operations. All controlled U.S. flag capacity of a participant’s commitment will be activated on a proportionate basis. The DoD and/or Tanker Requirements Committee (TRC) will exercise best efforts to proportionately activate participants’ capacity to minimize commercial disruption and allow for reasonable efforts and timelines to offload commercial cargo prior to taking control of the participant’s vessel.

b. Activation shall be 100% of a participant’s entire U.S. flag capacity, subsidized and unsubsidized, not engaged in domestic trade (Jones Act capacity) plus 50% of a participant’s capacity that is engaged in the domestic trade (Jones Act capacity).

c. The rate of charter hire applicable to each charter under this contract will be the prevailing market rate effective at the time of proposed loading of the vessel. The Contracting Officer will determine the prevailing market rate utilizing the price analysis techniques set forth in FAR Subpart 15.4 to determine that the rates are fair and reasonable, utilizing market or previous contract prices. To the maximum extent practicable, MSC will be consulted to determine the prevailing market rate.

d. In addition to the prevailing market rate, participants will be compensated 30% above the prevailing market rate for the duration of the activation. The VTA daily charter vessel daily rates shall be calculated by multiplying the prevailing market rate by 130%.

e. Upon activation of VTA, the voluntary commitments of Program Participants preceding such activation shall convert to the USTRANSCOM VTA contingency contract terms and conditions and pricing.

f. This Charter Party shall be for the period identified at activation, commencing upon the Charterer's acceptance of the Vessel and continuing until either the date of her redelivery or the completion of the voyage then current, at the Charterer's sole option. The charter will not exceed the 5-year limit on vessel charters imposed by 10 U.S.C. § 3671. Any option periods shall be in direct continuation; shall be without guaranty at the Charterer's sole option. Optional periods may be declared at any time prior to redelivery of the Vessel. For option periods commencing after twelve months of activation, the Contracting Officer will determine if market prices have increased or decreased to the extent practicable to update the prevailing market rate.

g. The decision to deactivate VTA and release Participants from activation commitments will be made by USTRANSCOM Commander based on the operational requirement. Deactivation considerations may also include costs to DoD and minimizing the Contractor’s commercial disruption by returning commercial assets for use in peacetime business.

4. Tanker Requirements Committee (TRC)

USTRANSCOM or MARAD may request activation of the TRC to support contingency operations or training purposes. The purpose of the TRC meetings will be to conduct contingency operations planning. Participants will be invited to open TRC meetings and other joint planning forums. For selected committee meetings, attendance may be limited to designated program participants.

5. Company Command Center

A. Activation of VTA to which the participant has committed resources may require intensive specific planning and coordination between DoD and the participant. The participant shall submit points of contact who can respond to U.S. government activities on a 24/7 basis to provide expert assistance in answering questions, exchanging information, and resolving problems upon notification of activation. The participant is required to establish an unclassified company command center within 24 hours after activation of committed resources and provide planning documentation. The participants planning documentation shall include points of contact, 24-hour telephone numbers and describe with adequate specificity how the command-and-control operations will be carried out for government cargo during the activation performance period.

B. The participant shall maintain reliable communication capability between the participant and Military Sealift Command (MSC) Maritime Global Operations Center (MGOC) Battle Watch Captain at MSCHQ.BWC.fct@navy.mil / 757-443-5845. At a minimum, the means of communication shall include those facilities normally used by the participant in conducting commercial business.

6. Terms and Conditions

A. Quality Control

1) The Contractor shall promptly notify the appropriate Contracting Officer Representative (COR), as specified by the Contracting Officer at time of activation, of any problems or failures that may affect performance. As directed, the Contractor shall provide the COR with a written plan of corrective action, including a proposed timeline, no later than 10 business days after such request. This plan shall describe proposed Contractor actions to correct the problem or deficiency and bring performance back in compliance with identified performance standards.

2) The CORs shall monitor Contractor performance and compliance with the terms and the conditions of the contract using standard techniques such as inspections, US Government-generated management reports, Contractor reports and customer feedback. The Contractor shall attend periodic meetings called by the COR or the Contracting Officer to discuss operations and problem areas.

3) If contamination or degradation of Government cargo occurs due to the contractor's failure to properly maintain its equipment and/or Contractor’s negligence, the contractor shall be liable to the Government for replacement costs and/or associated costs with returning the cargo to specification to include any product already in the shore tank that may have been contaminated as a result of the contaminated cargo.

B. Quality Council Meetings

The Contractor shall participate in Quality Council Meetings as requested by the Contracting Officer to review performance and discuss operational issues. Meetings shall be held as directed by the Contracting Officer but will not exceed two per year.

C. Performance Reporting

In accordance with FAR 52.212-4(c), the contract may be modified to provide additional reports that satisfactorily quantify Contractor performance under Performance Objectives. The Contracting Officer may establish the format and frequency of such reports.

D. War Risk Insurance

The most up-to-date War Risk Insurance information is contained in the current MSC Tanktime proforma for VTA application/reference.

E. Charter Hire

1) Hire Rates. Charter hire for services under this Charter Party shall be payable at the applicable rates as stipulated at the time of activation per Section 3.C. and shall be earned at the expiration of each fifteen (15) calendar days of the charter period. Except as otherwise provided herein, said hire rates shall be considered payment in full for all services of the Vessel and Associated Equipment under this Charter including all overtime, penalty time, bonuses, payments, and emoluments payable to Master, Officers, and crew for services under this Charter, irrespective of the geographic scope of said service and including the carriage of ammunition and hazardous cargoes. Said hire rates are exclusive of the costs of fuel and port charges, and additional war risk expenses, if any, and other stevedoring costs such as loading, securing and discharging cargo.

2) Loss of Vessel. Should the Vessel be either lost or missing and presumed lost, Charterer may, at its sole discretion, terminate this Charter, in which case hire shall cease to be payable at the time of the loss or, if said time is unknown, at the time of the Vessel’s last received communication. Similarly, should the Vessel become a constructive total loss, Charterer may, at its sole discretion, terminate this Charter, in which case hire shall cease to be payable at the time of the casualty resulting in the constructive loss. The Vessel shall be considered missing and presumed lost when, after a reasonable lapse of time, it fails to reach its next scheduled port and reasonable efforts to contact it fail.

F. Mission

The Vessel may be employed in worldwide trade for the transportation and/or prepositioning of petroleum cargo (including, but not limited to hazardous cargoes) and military readiness, in accordance with the terms of this Charter.

G. Changes (Tailored)

Changes within the general scope of any of the terms and conditions of this Contract may be ordered by the Contracting Officer. If any such change causes an increase or decrease in the cost of performance, such change will be the subject of a bilateral modification to the Contract. However, nothing in this clause shall excuse the Contractor from proceeding with the Contract as changed.

H. WAR

1) Voyage Instructions. Operating limits of the Vessel subject to this Contract shall be worldwide. If the Vessel is ordered under this Charter Party to any port, place, zone, or route involved in a state of war, warlike operations or hostilities, civil strife, or piracy (whether there be a declaration of war or not) where it might be reasonably expected to be subject to capture, seizure, arrest, or hostile act by a belligerent power (whether de facto or de jure), pirate, or terrorist, it shall be unreasonable for the Contractor not to prosecute said voyage if insurance against said risks is then available commercially or under a Government program, or if the Government offers the Contractor indemnification against said risks pursuant to Public Law 85‐804 (72 Stat. 972, August 28, 1958).

2) The Contractor shall immediately notify the Charterer: (i) whenever any sailing orders will result in the Vessel subject to this Contract being sent beyond the limits of the War Risk Trading Warranties of insurance policies required under this contract (to include entry into a war risk exclusion zone or when the Vessel will enter, sail for, or deviate towards the territorial waters of any of the Countries or places or any other waters described in the Lloyd’s Joint War Committee’s current Hull War, Strikes, Terrorism and Related Perils Listed Areas); (ii) if there are any changes to the War Risk Trading Warranties of insurance policies required under this contract (including changes to the exclusion zones or the Hull War, Strikes, Terrorism and Related Perils Listed Areas) or changes to War Risk premiums, charges, or deductibles; or (iii) whenever additional premium charges or costs will be incurred as a direct result of compliance with any sailing orders issued by the Charterer under this Contract. The Contractor shall ensure that the insurers provide it relevant information in a timely manner. If the Contractor has given this required notice to the Charterer, the Charterer will reimburse the Contractor for the increase in costs (if any) of insurance premiums, charges, or deductibles which arise from the Vessel sailing beyond the applicable War Risk Trading Warranties (including changes to the war risk exclusion zones) when entry into any exclusion zone or Hull War, Strikes, Terrorism and Related Perils Listed Areas under such insurance has been approved in advance by the Charterer. The issuance of sailing orders, by itself, does not constitute approval in advance by the Charterer. The Charterer may give the Contractor notice and instructions concerning suspension of commercial War Risk insurance coverage and substitution of Government indemnity or Government War Risk insurance as detailed in the section entitled “Government War Risk Insurance/Indemnity” below.

3) Additional Wage Costs. The Charterer shall reimburse Contractor for the cost of provable additional master and crew wages (including all additional bonuses and payments required) to the extent that such additional costs arise directly from exposure of the Vessel, and/or Vessel’s master and crew, to the risks described in the paragraph entitled “Voyage Instructions” above. However, any of said wages or payments shall not exceed in amount that which would be payable, under applicable laws and regulations, to U.S. civil service mariners in the employ of the Military Sealift Command in a similar port, place, zone, or route. Contractor shall notify Charterer of all anticipated additional wage costs prior to entering any location which would trigger such additional costs; and no such costs shall be reimbursable unless Charterer, after notification of such costs, provides approval to enter such location.

4) Insurance Nonavailability. If no commercial or Governmental insurance is available for service under this Charter Party covering the risks identified in subparagraph (1) above, Vessel shall not be required to enter or remain at any port, place, zone, or route subject to said risks; Charterer in such case shall have the right to order the Vessel to other port(s) or areas consistent with Boxes 2 and 3 herein.

I. Reporting Requirements

Charterer’s Instructions. The Charterer shall furnish the Master with all requisite instructions and sailing directions in writing, including COMSC “Standard Operating Manual” (SOM) COMSCINST 3121.9 Series. The Master shall exercise due diligence to observe all such orders and instructions of the Charterer with respect to the Charterer's employment of the Vessel's services. Vessel must meet all MSC requirements for reporting. Reports required of the Vessel include, without limitation, the following:

Vessel shall provide position/status reports in-port and at-sea every six (6) hours daily at 0000, 0600, 1200, and 1800 hours local Eastern time (GMT-5 EST/GMT-4 EDT) and 72/48/24/12-hour pre-arrival notifications for all ports to Area Command and COMSC N351B, MSC Tankers. Vessel shall indicate all cargo tanks are clean, gas free, and ready for QAR inspection upon arrival delivery/first load port. Position reports shall be issued by electronic mail to the addresses designated in the cargo orders as issued by the appropriate Program Office or Area Command.

MSC Area Commands and MSCHQ may require additions or deletions to the addressees on the Position Reports and may also require additional reporting requirements.

These reports must include the Vessel’s Speed of Advance, current weather, and the ETA to the next port.

J. Crew

1) Conduct of Master, Officers, and Crew. The Master, Officers, and crew shall be appointed or hired by the Contractor and shall be deemed to be the servants and agents of the Contractor at all times except as otherwise specified in this Charter. The Master of the Vessel shall be under the Charterer’s direction with regard to the employment of the Vessel but shall not be under the Charterer's orders with regard to the navigation, care, and custody of the Vessel. If the Charterer shall have reason to be dissatisfied with the conduct of the Master, Officers, or crew, the Contractor shall, upon receiving the particulars of the complaint, investigate the matter and resolve the issue to the satisfaction of the charterer. Any and all additional costs including but not limited to attorney’s fees incurred as a result of removal of such personnel shall be for the Contractor’s account.

2) Qualifications. The Master, Officers and crew shall meet all international and flag state requirements for training and experience aboard tank vessels. For US Flag, this includes meeting citizenship requirements as prescribed by law.

3) Identification Cards. In the event Government identification cards are issued to Master, Officers and crew, the Contractor shall be responsible for tracking and, upon redelivery of the Vessel, returning all cards.

4) OCONUS Contractor Conduct. Upon award of this Contract, the Contractor shall immediately notify all contractor personnel, who are or who will be employed by, or who are or who will be accompanying, United States Naval Forces outside the continental United States (OCONUS), and who are not a host country national ordinarily resident in the host country, that such personnel, and any dependents residing with such personnel, who engage in conduct OCONUS that would constitute an offense punishable by imprisonment for more than one year if the conduct had been engaged in within the special maritime and territorial jurisdiction of the United States, may potentially be subject to the criminal jurisdiction of the United States as required by the Military Extraterritorial Jurisdiction Act of 2000, Pub. L. 106-523, 114 Stat. 2488, codified at 18 U.S.C. 3261 – 3267, as implemented by DoD Instruction 5525.11, “Criminal Jurisdiction over Civilians Employed by or accompanying the Armed Forces outside the United States.” Reference is made to Secretary of Defense memo dated 10 March 2008; "UCMJ jurisdiction Over DoD Civilian Employees, DoD Contractor Personnel, and Other Persons Serving With or Accompanying the Armed Forces Overseas During Declared War and in Contingency Operations."

K. Cadet/Midshipmen

As required by 46 U.S.C. § 51307, the Contractor/Operator shall participate in programs for Merchant Marine cadet training under the sponsorship of, and in accordance with the policies and procedures of, the United States Merchant Marine Academy (USMMA) and shall carry on this vessel at least 2 USMMA cadets, if available, on each voyage. The USMMA will determine whether it has cadets available for cadet training. Cadet wages, berthing, training, subsistence, and transportation shall be solely the responsibility of the Contractor/Operator. If USMMA cadets are not available, the Contractor shall participate in programs for Merchant Marine cadet training under the sponsorship of, and in accordance with the policies and procedures of, accredited state academies. The state academies will determine whether they have cadets available for cadet training. Available positions shall be distributed as equally as possible among the requesting schools. Cadet wages, berthing, training, subsistence, and transportation shall be solely the responsibility of the Contractor.

L. Cargo Receipt

1) Manifest/Bill of Lading. The Charterer or consignor of the cargo shall prepare a manifest and/or bill of lading, which shall list the cargo loaded on the Vessel. The Master shall sign said cargo receipt(s) in acknowledgment of the receipt of cargo said to have been loaded by the Charterer or the consignor of the cargo, without responsibility as to quantities, mixture, mark, number of packages, weights, etc., or the apparent condition of the cargo, it being understood that it is the Charterer's or the consignor's responsibility to tally the cargo and to check the condition thereof upon loading and discharging. The Contractor shall provide a copy of the signed manifest(s) upon request by the Government.

2) Charter Paramount. Any receipt signed by or on behalf of the Master or Agent shall be without prejudice to the terms, conditions, and exceptions of this Charter and subject to all of them. The terms of this Charter Party shall apply to any shipment made by the Government whether or not bills of lading are issued.

M. Loading and Discharging

1) Detention or Standby. If by reason of the Contractor's failure to use diligence to keep the Vessel in a thoroughly efficient state of hull, machinery, equipment, personnel, and other particulars relating to the seaworthiness of the Vessel, the Charterer incurs costs of stevedoring detention or standby time in connection with the loading or discharging of cargo, such costs shall be for the account of the Contractor, provided, however, the Contractor shall not be liable for such costs unless the period of detention or standby time exceeds 20 minutes. The Charterer, within 24 hours after the period of detention or standby time commences, shall give the Contractor or its representative written notice of the detention or standby time.

2) Lighterage. Lighterage, if any, will be at the risk and expense of the Charterer, except as otherwise provided herein.

3) Injurious Cargoes. No injurious cargoes, including acids that are injurious to the Vessel, are to be shipped.

4) Carriage of Non-Clean Products. The Charterer shall have the right to carry dirty petroleum products excluding crude oil at any time during the currency of this Charter Party and also the right to change from dirty petroleum products to clean petroleum products any time during the currency of this Charter Party, it being understood that any time and expense involved in cleaning the tanks to carry clean petroleum products after carrying dirty petroleum products shall be for the Charterer's account, except that any additional cleaning required by reason of carrying a higher grade of cargo which can normally be done by the crew and/or with the Vessel's equipment shall be for the Contractor's account. It is also understood that this paragraph does not alter the responsibilities of the parties with respect to the condition of the tanks on delivery and redelivery as contained in III(k)(4) (Description of Vessel – Cargo Tanks).

5) Oil/Water Interface Point. The Vessel shall establish, immediately upon completion of loading and immediately prior to discharge, either by manual or electronic means, the oil/water interface point in all cargo tanks and record such readings in Vessel's logs.

6) Ballast Discharge. The Vessel shall be capable of discharging ballast while loading cargo and of taking on ballast while discharging.

7) International Safety Guide for Oil Tankers and Terminals (ISGOTT). The Vessel shall be operated in compliance with guidelines detailed in ISGOTT.

N. Oil Pollution Spill

1) Pollution Damage. Where an escape or discharge of oil occurs from the Vessel and threatens to cause pollution damage to coastlines, Charterer may, at its option, and upon notice to Contractor or Master, undertake such measures as are reasonably necessary to prevent or mitigate such damage, unless Contractor promptly undertakes same. Charterer shall keep Contractor advised of the nature of the measures intended to be taken. Any of the aforementioned measures actually taken by Charterer shall be at Contractor’s expense except to the extent that any such escape or discharge or threat was caused or contributed to by Charterer. If Contractor considers such measures should be discontinued, Contractor shall so notify the Charterer and thereafter neither the Charterer nor its nominee shall have any right to continue said measures under the provisions of this paragraph and all further liability, if any, to Charterer for such escape or discharge shall thereupon cease, except that Charterer may continue such measures at Contractor’s expense if Contractor does not undertake reasonable measures to prevent or mitigate damages.

2) Reservation. The above provisions are not in derogation of such other rights as Charterer or Contractor may have under the provisions of this Charter including but not limited to Section D (War Risk Insurance) hereof, or may otherwise have or acquire by law or any international convention.

O. Pollution Prevention and Safety Compliance

Contractor warrants that the Vessel is in full compliance with the United States Oil Pollution Act of 1990 (OPA 90) and all applicable U.S. Coast Guard (USCG) regulations for safety and pollution prevention, including those regulations in 33 CFR Parts 155, 156, and 164, and amendments thereto. Contractor warrants that it has submitted a Vessel Response Plan (VRP) for the Vessel, which complies with OPA 90 and with USCG regulations. Contractor further warrants that the Vessel will be operated in full compliance with the legally applicable VRP requirements and any future VRP requirements. Contractor further warrants that the Qualified Individuals listed in the VRP of the Vessel are readily available and their contract telephone numbers can be given to Charterer immediately upon request. Contractor will provide evidence of such compliance within three working days from the date of the fixture.

P. Financial Responsibility

Contractor warrants that it has secured, and carries aboard the Vessel, a Vessel Certificate of Financial Responsibility (Water Pollution) issued by the USCG in accordance with 33 C.F.R. 138.65.

Q. Excusable Delays

1) Excepted events. Neither the Vessel, her Master, the Contractor, nor the Charterer shall, unless otherwise in this Charter Party expressly provided, be responsible for any loss or damage or delay or failure in performing hereunder arising or resulting from any act of God; act of public enemies, pirates, or assailing thieves; arrest or restraint of princes, rulers, or people; seizure under legal process provided bond is promptly furnished to release the Vessel; flood; fire; blockade; riot, insurrection, or civil commotion; earthquake; or explosion. The Vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist Vessels in distress, and to deviate for the purpose of saving life or property, or to go into dry dock or into ways with or without cargo, passengers, or other personnel, as applicable, onboard.

2) Notification. The Contractor shall notify the Contracting Officer in writing as soon as it is reasonably possible after the commencement of any excusable delay, setting forth the full particulars in connection therewith, shall remedy such occurrence with all reasonable dispatch, and shall promptly give written notice to the Contracting Officer of the cessation of such occurrence.

3) Reservation. The exceptions identified in subparagraph (1) above shall not be such as to affect the Contractor's warranties respecting the condition of the Vessel, or the Contractor's obligations respecting the services specified under this Charter. Defaults of subcontractors at any tier or the Contractor’s failure to perform due to a labor disruption, labor dispute, or strike shall not constitute excepted events under subparagraph (1).

R. Sovereign Immunity

While performing ship operations, the Contractor shall ensure the Master advises foreign authorities and husbanding agents that the vessel under this contract is a sovereign immune vessel of the United States. These privileges include immunity from arrest or search (whether in foreign internal or territorial waters, or in international waters), immunity from foreign taxation, exemption from any foreign state regulation requiring flying the flag of such foreign state either in its ports or while passing through its territorial sea, and entitlement to exercise exclusive control over persons on board such vessels with respect to acts performed on board. The Contractor shall observe all guidelines found in NAVADMIN 158/16, Sovereign Immunity Policy, ALMSC 020/06 Sovereign Immunity Guidance for MSC Masters, and ALMSC 026/09, Supplemental Sovereign Immunity Guidance, all of which shall be provided upon contract award. The Contractor shall contact the Area Command for the area of operations (AO) should any foreign authority or husbanding agent request information (submission of documents or completion of forms) contrary to the US Navy and MSC sovereign immunity policies.

S. Description of Vessel

1) Pumping and Stripping Capacity. The Vessel is equipped with the number of cargo and stripping pumps identified in Boxes 79 and 81 of Attachment 2 and their minimum discharge rates (against a back pressure of 100 psi at Vessel's manifold) are noted in Boxes 80 and 82, respectively. The Vessel is so equipped to drain and strip all cargo tanks of all free-flowing liquid cargo.

2) Cargo Capacity. The Vessel has the total capacity for bulk cargo identified in Box 56 after a deduction of two percent for expansion. The Vessel is constructed and equipped to carry, without admixture, the minimum number of grades of petroleum products identified in Box 54, with positive means of segregation between systems; that is, minimum double valves or effective line blinds. The Vessel is also equipped and constructed to be capable of loading and discharging the minimum number of grades of petroleum products identified in Box 55 simultaneously, using separate lines, pumps, and manifold connections.

3) Ballast Tanks. The Vessel's segregated and clean ballast tanks, as those terms are defined by applicable regulations, have the capacities noted in Box 57.

4) Cargo Tanks.

a. Vessel must have the ability to clean, mop, dry and inert cargo tanks within three (3) calendar days during performance of the charter when required.

b. Vessel must have the ability to carry one complete undecanted tank washing in dedicated slop tanks.

c. Vessel must hot wash all cargo spaces with water not to exceed 58 degrees centigrade prior to presenting for initial acceptance and inspection. All cargo tanks must be free of loose rust, previous cargo residues and films (including dyes), significant salt deposits and other impediments that could impact the quality of the cargo to be loaded.

d. Vessel must arrive at load port in a clean, gas-free condition, and be ready for internal tank inspection by Quality Assurance Representative (QAR). Ensure any adjacent tanks are also clean and gas free. Contractor shall provide (Contractor’s account) a Certified Marine Chemist to certify tanks safe for entry for internal tank inspection by Government / Charterer representative. Contractor will provide time needed to re-inert after inspection. If a prior (last and next to last) cargo contained a percentage of benzene, Contractor’s Certified Marine Chemist must also measure toxicity for Benzene content and certify safe for entry. All safe for entry / toxicity / flammability assessments will be performed in the presence if the inspecting QAR.

e. The use of copper and copper alloys (brass, bronze, etc.) in vessel compartments, pipelines, heating coils, fittings, etc. is not permitted in vessels chartered by MSC to carry petroleum products, unless vessel possesses a current Defense Logistics Agency - Energy (DLA-E) waiver.

f. If vessel cargo tanks have heating coils, provide the coil type or composition (such as stainless steel, copper, etc.), date that the heating coils were last pressure tested and the results of the test (passed or failed). Date of last pressure test cannot exceed 12 months for duration of this charter. Vessel tanks with copper or yellow metal compounds are normally not acceptable for Jet Fuel cargoes.

g. If vessel cargo tanks are internally coated, provide the coating type (epoxy, inorganic zinc, etc.). Coal tar coating is not acceptable. If tanks are not coated, then state “none.” Coatings that are incompatible with the fuel to be carried will be rejected.

h. Vessel must provide Certificates of Quality for last three cargoes. These Certificates should contain all test data required by specification for the products that were previously loaded (last three). Vessel Certificates of Quality from vessel post-load samples are preferred, but if unavailable shore tank Certificates of Quality representing quality of product loaded are acceptable. The Certificates of Quality should contain the test data required by the specification for the product which were loaded. They shall be submitted for each shore tank as well as the vessel tanks after loading (composite sample). Results of “typical” are not acceptable. Additionally, the following are required for the specific products mentioned:

i. Naphtha / Condensates: Mercaptan Sulphur, reported in “parts per million” (ppm) or “mass percent”, or Doctor Test (ASTMD 4952). Otherwise, Certificates of Quality should contain the test data required by the specification for the products which were loaded.

ii. Gasoline (Motor or Aviation): It must be stated whether the previous product was “leaded” or “unleaded”. This is needed to determine cargo tank “safe entry” testing requirements.

i. Vessel must provide documentation that certifies whether or not the last three cargoes carried contained FAME (Fatty Acid Methyl Esters). In the event any of the cargoes did contain FAME, vessel Contractors/operators must provide certification and support documentation that vessel cargo tanks were cleaned / conditioned in accordance with the guidance in Energy Institute HM50.

j. Vessel must be able to take upper, middle, lower, bottom, and all-level samples of the cargo (to include OBQ & ROB) without contaminating them from the sampling location. If unable to do so or if the sampling location is contaminated or suspected to be contaminated, Charterer will require open sampling on a tank by tank basis, consistent with safety and local terminal regulations.

T. Vessel Substitution

The Contractor may, at any time, propose to substitute a Vessel or Vessels. The nominated Vessel or Vessels shall possess the same or greater characteristics as the Vessel or Vessels being replaced. Approval of a Vessel substitution is a matter for the Charterer's sole discretion.

U. Spain-Gibraltar Prohibition

Contractor agrees as a condition of this contract that the vessel will not proceed to Gibraltar for any purpose for its next port call after departing a Spanish port, even if the vessel is off-hire or if the charter has concluded and the ship was redelivered to the Contractor in Spain. Contractor also agrees as a condition of this contract that the vessel will not proceed to Spain for any purpose for its next port call after departing Gibraltar, even if the vessel is off-hire or if the charter has concluded and the ship was redelivered to the Contractor in Gibraltar.

V. Salvage

1) All salvage moneys earned by the Vessel during the period of this Charter shall be divided equally between the Contractor and the Charterer after deducting Master's, Officers' and crew's shares, legal expense, Vessel hire lost, if any, as a result of the salvage service, value of fuel consumed (which shall be paid in full to the Charterer from the salvage award), repairs of damage, if any, and other extraordinary loss or expense sustained as a result of the salvage service. Charter hire shall continue to be paid by the Charterer during deviations for the purpose of performing salvage service.

2) When engaged in the carriage of Government cargo and if requested by the Charterer, the Contractor agrees to accept Navy salvage services. Such services may be provided using Navy personnel and resources or Navy contracted resources.

3) In providing such services, the Navy, through the Charterer, agrees to waive all claims for “pure” or “bonus” salvage. Instead, the Charterer shall be entitled to the following:

a. In those cases, in which the salvage services are provided by Navy personnel and resources, the salvage claim shall be limited to a schedule of current per diem rates and allowable expenses as established by the Navy’s Supervisor of Salvage. In no event shall such amount exceed a maximum claim of $25,000 per day.

b. In those situations, in which the Navy utilizes contracted resources to deliver assistance, the Contractor shall be liable for the actual daily rate charged to the Navy by the Contractor(s).

4) It is understood that this limited Supervisor of Salvage claim is asserted against the Vessel only, is solely for the Vessel's account, and does not include any amounts for the salvage of the Government's cargo. Notwithstanding any other provisions of this Contract, this limited Supervisor of Salvage claim IS NOT directly or by way of setoff chargeable in whole or in part to the Government by way of general average or otherwise.

W. Alteration

1) The Charterer shall be at liberty to make any additional alterations it may require beyond what is onboard at the commencement of this Charter, such work to be done at the Charterer's expense and on its time. The Charterer shall thereafter, during the period of this Charter, leave the Vessel in her original condition, ordinary wear and tear excepted, provided that the Contracting Officer is notified in writing within 30 calendar days of completion of any alteration that the Contractor requests such restoration or removal. The Charterer shall be at liberty to install any equipment or defensive armament (including demagnetization by installed equipment or other process, e.g., degaussing, wiping, or deperming), to install any additional gear or equipment for loading, carrying, or discharging cargoes, and to repaint the Vessel.

2) Such work shall be done at the Charterer's expense and on its time and shall not be such as to be in contravention of any applicable law of the United States or regulation made pursuant thereto. Such equipment, armament, materials, and gear so fitted are to be considered "Government Property" under the terms of FAR clause 52.245-1 at III(b)(3). The Charterer shall, during the period of this Charter, remove the same together with any alterations and additions thereto at its expense and time and shall restore the Vessel to her condition and color prior to such changes, ordinary wear and tear excepted. The Government shall have the right to abandon in place any alteration or Government furnished property unless the Contracting Officer is notified in writing within 30 calendar days of completion of any alteration that the Contractor requests such restoration or removal.

X. Crew Immunization

1) PROPHYLACTIC AND MEDICAL COUNTERMEASURES, INCLUDING IMMUNIZATIONS: U.S.-flag time-chartered vessel(s) services are considered essential Contractor services to the Department of Defense in support of military and associated support missions. As a result, Masters, officers, crewmembers, and other individuals who are embarked on such vessels for Contractor's purposes, including but not limited to subcontractors, are considered Contractor personnel performing mission essential services under DODI 3020.37, November 6, 1990, (Change 1, January 26, 1996), and are subject to the following:

a. Masters, officers, crewmembers, and other individuals, as described above, who are embarked on any vessel(s) subject to this Charter shall be medically pre-screened, and issued or given prophylactic and medical countermeasures, including immunizations, in accordance with COMSC policy. Contractor shall ensure that all Masters, Officers, crewmembers, and other individuals embarked on any vessel(s) subject to this charter comply with all such prophylactic and medical countermeasures, including all immunization requirements in effect or made during the period of this Charter, including any options or extensions. Notification of the requirements pursuant to this section shall be provided to Contractor by the Contracting Officer.

b. When prophylactic and medical countermeasures, including immunizations are required pursuant to this clause, Contractor shall provide notification, as directed by the Contracting Officer, of the immunization status of all embarked personnel within 24 hours of fixture or award. Further, at any time during the contract period, the immunization status of any relief personnel scheduled to board the vessel(s) is required no later than 96 hours prior to the personnel change, unless authorized otherwise by the Contracting Officer.

c. Any Master, officer, crewmember or other individual who refuses to comply with any prophylactic or medical countermeasure requirement, including any immunization requirement, or any policy concerning the use of said prophylactic or medical countermeasure, or who for medical, personal, religious or any other reason declines or is ineligible to take or use a particular required immunization or other prophylactic or medical countermeasure, shall be removed by Contractor from the Vessel as soon as possible, but not later than the next port call, and replaced, with an individual of equal or better qualifications who has, as applicable, the required immunization(s) or is eligible and willing to comply with the requirement. Any removal and replacement of personnel pursuant to this clause shall be solely at Contractor's expense, including, but not limited to, travel, per diem, wages and associated administrative expenses.

d. Crew shortages resulting from the application of this section may subject the vessel(s) to being placed off-hire.

Y. Investigation

The Contractor agrees to cooperate in any investigation conducted by the Charterer. Such cooperation shall include, but not be limited to, the production of documents and logs and making the Contractor’s employees available for interview.

Z. Contract Notice Regarding Litigation

The Contractor shall provide the Contracting Officer with immediate notice of any legal action, or claim against the Government, the Vessel, the Contractor, or the Contractor's underwriters that arises from or is related to this contract. The Contractor shall also provide the Contracting Officer with immediate notice of any legal action brought by the Contractor that arises from or is related to this contract.

7. U.S. Cargo Preference Act

In compliance with the U.S. Cargo Preference Act of 1904 (10 U.S.C. 2631), U.S.