Attachment_F_MSC_BUNKER_FUEL_MANUAL.PDF

Military Sealift Command Quality Management System

Procedures Manual

N0731-220.00-A Original

Endorsed by the M&R Steering Committee

Issued By: Date:

11/5/2011

SSIC: 3540

ISO: 7.4.3, 7.2

ISM: ISM.

Kevin D. Baetsen COMSC Engineering Director

Bunker Fuel Management

1 PURPOSE: To provide a comprehensive document that disseminates procedures and guidance for all shipboard bunker fuel requirements for the ordering, receipting, consumption, and off-ship transfer to and/or from other ships, Defense Fuel Support Points (DFSP), or Commercial facilities, such as a ship yard. Additionally, to provide procedures for receiving and transferring ship’s fuel (bunkers and aviation fuel) to and/or from other ships, helicopter squadrons, and foreign, domestic and government ships.

2 BACKGROUND / OBJECTIVES / APPLICABILITY:

2.1 Background: Fuel Organization

2.1.1 Department of Defense (DoD) Petroleum, Oil & Lubricants (POL) Enterprise

a. Defense Logistics Agency. The Defense Logistics Agency

(DLA) has responsibility under DoD 4140.25(series) for the integrated management of bulk petroleum products for all of DoD.

b. DLA Energy. DLA Energy has worldwide responsibility for bulk petroleum products until the products are sold to one of the Services (Navy, Army, Air Force, etc.). Responsibilities include procurement, inspection, transportation coordination, storage, and transfer to ultimate consumers.

c. Joint Petroleum Offices. The Joint Petroleum Offices (JPOs) carry out staff petroleum logistic duties for Combatant Commands for broad geographic areas (i.e., USJFCOM, USPACOM, USEUCOM).

MSC Quality Management System Procedures Manual N0731-220.00-A Original

Bunker Fuel Management Page 2 of 29

2.1.2 The Department of the Navy

a. Chief of Naval Operations. The Office of the Chief of Naval Operations (CNO) is responsible for providing seaward and over-water bulk petroleum shipments to the high-water mark for U.S. sea and land-based forces of all DoD components.

b. Fleet Commanders. Fleet Commanders determine peacetime consumption and identify war reserve requirements of petroleum by location. They coordinate fleet replenishment and orchestrate shore facility maintenance, repair, and construction.

c. Subordinate Fleet Commands. Responsibilities of subordinate Fleet Commands may include the following:

Submitting bulk and package petroleum requirements to the Fleet Commanders.

Arranging, loading and offloading Combat Logistic Force

(CLF) ships cargo, including coordinating arrangements with the proper terminal or command.

Monitoring cargo status to insure the readiness of CLF ships to meet operational requirements.

Administering Petroleum, Oil and Lubricants (POL) quality surveillance program for CLF ships, including pre-deployment inspections and scheduling of periodic technical assistance calls.

Training and evaluation of underway replenishment procedures.

Control of refueling operations involving fleet units.

Providing assistance in developing policy for operating and maintaining petroleum facilities ashore.

Planning for petroleum resupply and necessary rotation of stocks.

Arranging for deliveries of bunker fuel under contract.

Controlling inventory of petroleum stocks ashore.

Arranging for deliveries of POL from military and contractor-operated terminals.

Validating and forwarding for payment fuel bills incurred by the Navy from foreign countries.

2.1.3 Naval Supply Systems Command. The Naval Supply Systems

Command has the Naval Operational Logistics Support Command (NOLSC) headquartered in Norfolk which is a product and service

Bunker Fuel Management Page 3 of 29 provider for transportation, petroleum, ordnance and logistics planning coordination. NOLSC Petroleum is the Navy Service Control Point (SCP) for refined bulk petroleum products. They maintain close liaison with the DESC and other military service petroleum offices. NOLSC Petroleum coordinates petroleum and supply chain policy and procedures.

2.1.4 Index

a. Bunker Planning, 4

Arranging Bunker Fuel Deliveries, 6 Bunkering Evolution, 8 Requests for Bunker Fuel Deliveries, 4 Selection of Bunker Fuels, 7 Supply Source Priority, 7

b. Fuel Purchase Financial Documentation Requirements Bunker Fuel Acceptance and Receipting, 21 Bunker Fuel Requisitions, 18 Foreign Exchange Agreement (FEA), 23

c. Fuel Sampling, Quantity, And Quality Bunker Fuel Sampling, 10 Verifying Fuel Quality, 13 Verifying Fuel Quantity, 12

d. Shipboard Bunker Fuel Management Bunker Defueling, 17 Bunker Fuel Segregation, Consumption, and Testing, 15 Bunker Fuel Treatment, 17 Cargo to Bunker Tank Transfers, 15 Low Flash Point Fuel Handling, 15 Mixing Used Lube Oil with Fuel Oil, 16

2.2 Objectives: Applicable to all MSC Government and Contractor owned ships that receive government sourced or government reimbursed fuel.

Also applicable to MARAD ships under MSC Control. Where this document conflicts with a ship operating contract, the ship operating contract shall take precedence.

2.3 Applicability: Applicable to all MSC Government and Contractor owned ships that receive government sourced or government reimbursed fuel.

Also applicable to MARAD ships under MSC Control. Where this document conflicts with a ship operating contract, the ship operating contract shall take precedence.

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3 PROCEDURES / PROCESSES: This document is part of a series that comprises MSC’s Engineering Operations and Maintenance Manual (EOMM)

3.1 Bunker Planning

3.1.1 The MSC Area Commands with assigned Operational Control

(OPCON)/Tactical Control (TACON) responsibility shall be responsible for bunker planning for all MSC ships operating within their Area of Responsibility (AOR). The Area Commanders may delegate this authority to other MSC or MSC-related government activities within their AOR to facilitate timely and efficient bunker planning.

3.1.2 The MSC Area Commands shall develop a bunker plan for each bunker requirement. Form N0712-001.1-F shall be used as a guide for formatting bunker plans.

3.1.3 The MSC Area Commands shall plan bunker operations to ensure the most cost efficient bunkering consistent with mission and safety. Ships shall depart port with sufficient bunkers aboard to reach the next scheduled port where bunkers are available, plus a weather/safety reserve as directed by the operational commander, but not less than three days sailing at full speed. Bunkering decisions shall be based on considerations of ship’s characteristics, operating contract, mission requirements, weather, delivered cost and availability of bunkers.

3.1.4 MSC Area Commands are encouraged to request the services of a qualified fuel surveyor to assist the ship’s crew in bunkering operations.

3.2 Requests for Bunker Fuel Deliveries

3.2.1 All bunker fuel requests shall be submitted to the appropriate Area Commands via Logistics Request (LOGREQ), e-mail, or facsimile transmission. Submission of bunker fuel requests via telcon is permitted only in urgent and compelling circumstances. Telcon requests shall be followed-up in writing within 24 hours of the telcon request.

3.2.2 Ships shall submit requests for bunker fuel to the Area Command a minimum of ten (10) business days in advance of the desired delivery date. This lead-time allows adequate time to determine appropriate supply source priority (Paragraph 3.5), order

Bunker Fuel Management Page 5 of 29 processing, and sufficient time for fuel supplier to make necessary preparations for requested delivery.

3.2.3 Each request for bunker fuel shall include the following data at a minimum. Failure to provide all of the required data may result in delays in arranging fuel deliveries.

a. Ship’s name

b. Fuel type

c. Fuel quantity in barrels (bbls) and metric tons (MT)

d. Requested delivery date and time

e. Requested delivery location

f. Requested delivery method (e.g., pipeline, barge, or truck)

g. Special requirements (e.g., hose size, flange type, oil boom, fuel surveyor)

h. Ship/Ship Agent point of contact including phone numbers, email, and address

i. Force Protection requirements, if any

3.2.4 MARAD managed ships under the operational control of MSC shall coordinate their fueling requirements through the appropriate Area Command.

3.3 Arranging Bunker Fuel Deliveries

3.3.1 The Area Command shall use the supply source priority (Paragraph 3.5) to determine the most cost effective way to procure fuel. All incoming fuel requests shall processed during the same business day in which they are received, if practicable, assuming all required ordering data was provided by the originator of the request.

3.3.2 Figure 1 shows the MSC Fuel Procurement Process. This process is explained in detail in Appendix A.

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Ship needs bunker fuel from external source

Shoreside

DFSP

(F-76, RME)

FEA

(F-76 or MGO)

DESC Bunker Contracts

(MGO, RME,

RMG)

GOCO, COCO

Refer to the Program

Contracting Officer of GOCO, COCO

Contracting Officer directed buy

GOGO

Ordering Officer initiates

SEACard® Open Market Process

Ship submits fuel requirement to

Area Commander

Government fuel source

Open Market

Afloat DFSP provides fuel

Ship submits fuel requirement to

Operational Commander

Area Commander determines fuel source based on submitted fuel requirement and supply source priority.

Commercial fuel source

FISC Husbanding Contract

MSFSC/SSU

N10

Figure 1: MSC Fuel Procurement Process

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3.3.3 Fuel Procurement Process Explanation

a. Government Sourced Fuel (DD-1149). Ship bunker fuel purchased from a DFSP, Afloat DFSP or FEA. Area Command Fuel Ordering Officer will notify the ship regarding the availability of fuel at the DFSP or FEA. Fleet Commander will coordinate all fuel deliveries via an Afloat

DFSP.

b. Government Sourced Commercial Fuel (DESC Bunker Contract, DD-1155). Area Command Fuel Ordering Officer will enter the bunker order into DESC’s SEACard(sm) system.

The DESC bunker contracts provide Marine Gas Oil (MGO), RME, and RMG. The commercial fuel orders have strict timeframes for cancellations and scheduling changes and include strict timeframes for order changes/cancellations based on delivery methods. Fuel ancillary charges such as demurrages, backhaul and overtime are paid via the ship’s OPTAR account.

c. Open Market Commercial Fuel (DD-1155). The Area Command takes the following actions depending upon the customer:

GOCO/COCO. The Area Command shall notify the Ship

Manager/OPCO, Master, and appropriate MSC Program Manager (PM) as soon as practical that commercial sourcing is required. The PM must ensure an obligation exists on appropriate contract bunker line and must advise the Contracting Officer. If sufficient obligations exist, the PM will initiate actions to prepare and forward an FMS/SPS requisition to Contracting. Ship Manager/OPCO sends bids to Contracting Officer who reviews with the PM and authorizes as appropriate.

GOGO. Based on the MSC/DESC business rules, the Area Command will determine if sufficient time is available to process an open market order using the SEACard(sm) system. If sufficient time is available, the Ordering Officer will enter the bunker order and upon acceptance by the Accountable Official (DESC Contracting Officer), the contracting process is initiated.

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d. If SEACard(sm) open market is not an option, and other options have been exhausted (refuel at sea, delay re-fueling, etc), the Area Command shall determine the availability of a FISC husbanding contract to fill the fuel order. If a FISC Contract exists, the Area Command shall ensure the ship’s ordering officer (generally the Suppo and /or Master) coordinate with the husbanding agent to identify the appropriate CLIN and procedures required to issue the order.

e. If FISC husbanding agent does not exist, the Area Command shall notify cognizant MSC/SSU contracting office (N10) and Class Manager (CM) both verbally and by e-mail.

The Area Command shall identify potential suppliers and the ship shall submit a Material Order Requirement (MOR) via normal means to the MSC Supply Chain (MSFSC_SupplyChain@navy.mil). MSC/SSU shall award a contract and notify the Area Command, Ship and CM regarding the information to support the bunker transaction.

3.4 Selection of Bunker Fuels

3.4.1 In general, USNS and MARAD ships shall use the grades of bunkers specified by the boiler or engine manufacturer.

3.4.2 Chartered ships shall use the bunker grade specified by the charter contract. If that grade is not available, the Area Command shall consult with the Ship/OPCO/PM, as appropriate, to determine an acceptable alternative.

3.4.3 If JP-5 is used as bunker fuel then the ship shall follow Naval Ships’

Technical Manual (NSTM) 542.

3.5 Supply Source Priority

3.5.1 A network of petroleum storage terminals has been established around the world to support U.S. Military requirements. The products at these terminals are owned by the DLA Energy, and include war reserves and peacetime operating stocks. Any terminal that holds DESC fuel is termed a Defense Fuel Support Point (DFSP). The cargo fuel aboard a T-AKE, T-AOE, and T-AO is DFSP product. They are considered afloat DFSPs.

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3.5.2 Bunker fuels may be obtained from a variety of government or commercial sources depending upon the availability of the preferred fuel at a location and time. The following supply source priority list shall be adhered to except in instances in which the use of this list would result in an uneconomical delay of a ship's movement, violating regulatory requirements, or other undue cost for the Government.

a. DFSP

b. Afloat DFSP– (e.g., T-AO, T-AOE, T-AKE)

c. Government sourced commercial bunker contracts administered by DLA Energy (If product available does not meet specification for Pour Point then utilize next available source)

d. Foreign Exchange Agreement (FEA)

e. Open market commercial fuel purchases

3.6 Bunkering Evolution

3.6.1 PO1 Ships shall follow SMS procedure 7.4-004- ALL Bunkering

(from Shore) & Ship’s Lube Oil.

3.6.2 All ships shall develop and maintain a fuel bill that complies with

33CFR156.

3.6.3 A pre-fueling meeting shall be conducted between the ship’s representative and the supplier’s representative to ensure all bunker plans and emergency response procedures are understood and to verify that adequate communications are established and shall be maintained throughout the fueling period.

3.6.4 All ships receiving fuel shall:

a. Conduct a visual inspection of each barge/truck, and its equipment, hoses, etc., delivering fuel prior to commencing fueling.

b. Witness and record the sounding and fuel temperature for each tank on each barge/truck prior to commencing fueling.

c. Witness and record the sounding and fuel temperature for each tank on each barge/truck following the completion of fueling.

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d. When distillate fuel is provided, and when safety and other considerations allow, draw a sample from each tank on each barge or truck, at random points within each tank, and perform a visual inspection of the sample to ensure that the fuel satisfies clear and bright criteria prior to accepting delivery of the fuel. If fuel doesn’t pass clear and bright then reject the fuel.

e. Take a density reading of the fuel during the inspection and sounding of each tank on the barge/truck to ensure density is within +/- 10 kg/m3 of the bunker delivery note (BDN). If fuel is not within +/- 10 kg/m3 annotate on the BDN the density.

f. Record barge/truck inspection, sounding and temperature data (average of all barge fuel tank temperatures), and average density test results in the Oil Record Book.

g. Following the completion of bunkering, MARPOL Annex VI

Regulation 18 establishes the requirement for the supplier’s representative to provide a Bunker Delivery Note (BDN) and ensure that a representative/retained sample is taken per Paragraph 3.7. The representative/retained sample shall be retained under the ship’s control until the subject fuel is substantially consumed, but not less than one year from delivery. The BDN shall be retained on the ship for a period of three years after receipt of bunker fuel.

3.6.5 Verification of fuel quality and quantity shall be performed in accordance with Paragraphs 3.7 and 3.8.

3.6.6 Upon completion of verification of fuel quality and quantity, the BDN shall be forwarded to the Area Command/OPCO.

3.7 Bunker Fuel Sampling

3.7.1 All sampling materials and equipment are available through the MSC Worldwide Fuel Oil and Lube Oil Handling Equipment contract. The products available for bunker fuel sampling and storage are listed in Appendix A.

3.7.2 To meet the requirements of MSC’s fuel quality program and comply with MARPOL Annex VI regulations, MSC ships shall take a primary sample when receiving bunker fuel from barge, pipeline, Bunker Fuel Management Page 11 of 29 truck or other ships. The primary sample shall be taken at the receiving ship’s inlet manifold, by continuous collection of drip sample throughout the entire bunkering process. If a primary sample cannot be taken from the receiving ship’s inlet manifold then the MARPOL sample (representative/retained sample) shall be taken from the discharge ships outlet manifold. Ensure that the sample is taken in clear view of the Chief Engineer and it is a representative sample of the fuel received. From the primary sample, the MARPOL (representative/retained), supplier, off-ship fuel quality, and retest samples are derived, and shall be no less than 400ml each.

a. Care shall be taken during the handling of the drip sampler containers (cubitainer) in order to prevent the inadvertent introduction of contaminants into the sample. Only clean drip sampler cubitainers and sample bottles shall be used.

b. The continuous drip sampler shall be flushed and inspected allowing the fuel to flow through the drip sampler in order to clean out old fuel prior to attaching the primary sample containers.

c. In the event the continuous drip sampler container is not of sufficient size to collect a primary sample that is representative of the entire volume of fuel delivered, additional sampler containers may be used as necessary.

However, the contents of all the drip sampler containers shall be combined and thoroughly mixed prior to being divided into individual sample bottles.

d. Following the completion of bunkering, the primary sample shall be divided into the following individual sample bottles.

The corresponding label (i.e. MARPOL, Supplier, Off-ship fuel quality test, or Retest) shall be placed on the specific sample type. The sample bottles shall be sealed by affixing a serialized seal and all seal numbers shall be recorded in the Oil Record book. The samples shall be designated as:

Sample 1: MARPOL sample: This sample is a MARPOL

Annex VI requirement, and it is to be sealed and stored in a sheltered location to prevent exposure to direct sunlight and elevated temperatures. The sample is sealed by affixing a serialized seal and signed by the supplier’s representative and ship’s officer in charge. Recommend

Bunker Fuel Management Page 12 of 29 storing this sample in the fuel sample storage cabinet.

This sample shall be retained onboard not less than one year after delivery or until the fuel is substantially consumed.

Sample 2: Supplier sample: MSC requires the supplier sample to be offered to the supplier of the fuel. If the sample is refused, it needs to be indicated on the BDN and the Oil Record Book, and the sample can then be discarded.

Sample 3: Off-ship Fuel Quality sample: MSC requires the off-ship fuel quality sample to be sent to a fuel laboratory ashore for testing and analysis.

Sample 4: Retest sample: MSC requires the retest sample to be prepared in the event retesting of the off-ship fuel quality sample is required. This sample shall be retained onboard for a period of 90 days. Recommend storing the sample in the fuel sample storage cabinet.

e. See Appendix B for example of sample labels.

3.8 Verifying Fuel Quantity

3.8.1 The official quantity of fuel received is that amount annotated on the BDN provided by the supplier’s representative. It is the receiving ship’s responsibility to ensure the BDN reflects the temperature corrected volume. If there is a discrepancy in the amount of fuel received, refer to Table 1. If an independent Surveyor is present, this report may also be used to verify quantity.

3.8.2 Ship’s representative shall confirm that the quantity of fuel received was volume corrected to 15 degrees Celsius or 60 degrees Fahrenheit utilizing ASTM Petroleum Measurement Table 54B. If fuel is not temperature corrected, do not sign the BDN.

a. A spreadsheet is available from MSC.mschq-fuel.fct@navy.mil fuel email address which calculates both net volume and net mass of fuel from a given gross volume.

It can be used in lieu of ASTM Table 54B for calculating fuel quantity.

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b. In those instances in which the fuel quantity is provided in weight, the ship’s representative shall first ensure volume is corrected in accordance with Paragraph 3.8.2.a, and then validate density of primary sample with onboard density meter. If the calculated amount of fuel received and the amount reflected on the BDN cannot be resolved, the actions to be taken are identified in Table 1.

Table 1: Reporting and Documentation Required for Variations in Quantities Received.

Amount of Variation 0.5%≥ x ≤ 1% > 1% Annotate BDN yes yes Record in Oil Record Book yes yes Report in Remarks Section of monthly NEURS report yes yes

* Formal Protest Letter delivered to supplier's representative no Yes

** Formal Protest Letter delivered to applicable Area Command AO no yes

Submit amount of variation and copy of protest letter, if applicable, to MSC.mschq-fuel.fct@navy.mil yes yes

* MSC Bunker Protest Letter Format, Form N0712-001.2-F ** Area Command and Accountable Official Listing, Form N0712-001.3-F

3.9 Verifying Fuel Quality

3.9.1 All distillate bunker fuels shall be visually inspected for clear and bright criteria prior to accepting delivery, as well as periodically throughout the fueling period. Failure to meet the clear and bright criteria is cause for rejection and bunkering operations should cease immediately. The Master shall notify the applicable Area Command and the operational commander. The BDN shall be annotated with the remark “FAILS CLEAR AND BRIGHT INSPECTION”. All distillate fuels, whether received from a DFSP, DESC commercial bunker contract, or commercial spot market source, and whether manufactured to commercial or military specifications, are required to meet clear and bright criteria. The applicable MSC PM/TD and MSCHQ N7 must jointly approve any

Bunker Fuel Management Page 14 of 29 request for a waiver for compliance with this requirement. For any distillate fuel that fails the clear and bright criteria, a single sample shall be sent to MSC’s contracted fuel oil testing laboratory with the remark “FAILS CLEAR AND BRIGHT INSPECTION".

a. Dyed Fuel:

Red Dyed fuel: Solvent Red dye is used in both US ports and other ports around the world to distinguish the fuel as “Reduced Tax or Tax Free” fuel. This dye is not harmful to fuel injection equipment and has not demonstrated any problems with fuel filters.

Black Dyed Fuel: BLACK DYED FUELS ARE NOT AUTHORIZED FOR USE IN MSC’S FLEET. Solvent Black dye is typically found in the Mediterranean.

Green or Blue Dyed Fuel: Typically found overseas and should not present any problems.

3.9.2 All Government owned ships receiving bunker fuel shall submit the off-ship fuel quality sample to the MSC contracted fuel oil testing laboratory. All fuel samples shall be tested in accordance with ISO 8217:2010 for DMA, RME, and RMG. Fuel oil sample test results will be provided within three (3) business days after receipt of the fuel sample at the fuel laboratory. Fuel sample results and any recommended actions are provided to the following individuals:

Class Manager or PM representative, Type Desk, Chief Engineer, and Contract Operator representative.

3.9.3 When submitting fuel samples for shipment, the stated value of the fuel oil sample shall not exceed one dollar when using express mailers.

3.9.4 All Chartered ships receiving Government fuel shall submit the off-ship fuel quality sample to either the MSC contracted fuel oil testing laboratory or another qualified fuel analysis laboratory. In the event the contractor uses a laboratory other than the MSC contracted fuel oil testing laboratory, the fuel analysis results shall be submitted to the MSCHQ N7 email box: MSC.mschq-fuel.fct@navy.mil. All fuel samples shall be tested in accordance with ISO 8217:2010 for DMA, RME, and RMG.

3.9.5 Bunker Fuel Testing for Storage Stability. Distillate fuel (MGS, F-

76) should be stable under normal storage and use conditions.

However, MGO fuel stored in a tank greater than six months has the potential for becoming unstable. It is therefore, recommended

Bunker Fuel Management Page 15 of 29 that a sample of MGO be taken every six months and sent to MSC’s contracted fuel laboratory for testing of long term stability.

F-76 stored in a tank greater than one year should be sampled and tested as described above.

3.10 Bunker Fuel Segregation, Consumption, and Testing

3.10.1 Ship’s bunker fuel plan should ensure shipboard storage tanks shall be used to segregate new bunker fuel from existing fuel to the maximum extent possible.

3.10.2 Bunker fuel should not be used until lab results and MSC treatment recommendations are received per Paragraph 3.9.2. In the event liquid load, ship stability or operational considerations mandate using untested bunker fuel, reasonable efforts shall be made to minimize consumption of untested bunker fuel.

3.10.3 Whenever practicable, ships carrying both MGO and F-76 (Diesel

Fuel Marine) should consume MGO fuel before F-76. F-76 has been tested for long term storage stability at point of manufacture and has a nominal storage life of 2 years. Ships should assume MGO has a nominal storage life of 6 months unless a long term storage stability test indicates otherwise. In those situations in which operational considerations restrict fuel consumption, treatment options to enhance storage life are addressed in Paragraph 3.14

3.10.4 Bunker fuel should be rotated in such a manner that the fuel with the shortest remaining storage life is the first fuel consumed. In those situations in which the liquid load or stability considerations restrict fuel tank rotation, treatment options are addressed in Paragraph 3.14.

3.10.5 F-76 fuel stored in tanks greater than one year and MGO fuel stored in tanks greater than six months shall be tested for long term storage stability. A fuel sample shall be taken from the center of the tank and the sample sent to MSC’s contracted fuel laboratory.

The fuel sample bottle label shall be annotated to test long term storage stability.

3.11 Low Flash Point Fuel Handling. If forced to load low flash point fuel, the following precautions shall apply

3.11.1 Ship should be made aware of the Flash point of all fuels onloaded

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3.11.2 Take only the minimum amount of low Flash point fuel required for mission and ship stability

3.11.3 Advise engineering watch standers of the reduced Flash point fuel and the required precautions

3.11.4 Maintain vigilance to locate and correct any/all fuel leaks and fuel spray

3.11.5 Increase effort to keep bilges dry and free from fuel leaks

3.11.6 Do not perform full-power trials

3.11.7 Ensure “smoking lamp” is out throughout the ship (underway or in port) when transferring or unloading the lower flash point fuel. If there is designated “smoking area” ensure it is well clear (10ft radius) of any fuel tank vent(s)

3.12 Cargo Tank to Bunker Tank Transfers

3.12.1 Combat Logistics Force (CLF) Afloat Supply Officers shall be responsible for processing fuel requisitions for afloat transfers between the ship’s cargo tanks and bunker tanks for Government Operated ships. The financial documentation of this transaction is addressed in Paragraph 3.16.1. . Cargo to bunker fuel transfers must comply with Paragraph 3.6.

3.12.2 PM5 (point to point chartered) Tanker. Whenever a tanker transfer cargo fuel to bunkers at sea, MSC report 4020.4 will be submitted via message to COMSC PM51, COMSC N82, COMSC N713, MSC AREA COMMANDER, DLA-ENERGY BIT (DESC-BIT@DLA.mil) within 24 hours of the transfer in the following format:

3.12.3 Ship name, Cargo number, Date of Transfer, Area

Command reference number, type of fuel, amount transferred (in bbls)

3.13 Mixing Used Lube Oil with Fuel Oil

3.13.1 Mixing of used lube oil with fuel oil to be consumed in a main propulsion or auxiliary diesel engine is PROHIBITED. Most lube oils contain additive packages that cause accelerated fuel system, cylinder and turbocharger wear.

3.13.2 Mixing of used lube oil with fuel oil to be consumed in auxiliary or main propulsion boilers is acceptable at a rate not to exceed five (5) percent by volume. A fuel oil additive must be used to eliminate slag or soot build-up. Appropriate fuel oil additives are available through the MSC worldwide chemical contract and dosage rates are provided in the chemical handbook.

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3.14 Bunker Fuel Treatment

3.14.1 MARPOL Annex VI and international laws have forced a reduction in ship’s airborne emissions which has resulted in chemical changes to bunker fuels. Fuel treatment additives are available on the MSC Chemical Contract and are further described in Paragraph

3.14.3 and 3.14.4. Each ship shall order and manage adequate quantities of fuel treatment additives to support their bunker requirements.

3.14.2 T-AKE and T-AE ships shall not treat any bunker tank(s) designated for fleet transfer of fuel to USS naval ships and other Navies. However, those bunker tanks designated for the ship’s own consumption shall be treated with a biocide as specified in Paragraph 3.14.3

3.14.3 Ships using distillate fuel shall treat their fuel storage tanks with a microbiocide used to control bacterial growth. Distillate fuel tanks shall be treated with the microbiocide prior to refueling and every three months thereafter until the fuel is consumed. Specific dosing requirements are provided in Appendix C

3.14.4 Specific treatment dosage rates for fuel conditioners and deposit modifiers will be provided by MSC based on fuel analysis of bunker sample. Appendix C provides current chemical contract products and dosage rates.

3.15 Bunker Defueling

3.15.1 Bunker to Cargo Tanks: Bunker fuel being transferred to cargo tanks should not have been treated with a microbiocide.

3.15.2 F-76 Bunkers to Shore DFSP: Bunker fuel being transferred to a shore DFSP must be tested in accordance with MILSTD-3004.

Once the fuel has been tested, it can be pumped ashore. A DD- 1149 is used to document this transfer and the requisition number generated by the ship is used to generate a credit within the Defense Finance Accounting System (DFAS).

3.15.3 Bunkers to shipyard: Bunker fuel being transferred to a shipyard should be coordinated via the Port Engineer and discussed with the appropriate Area Command and ship Class Manager. Decisions as to store the fuel or have the shipyard sell the fuel should be a

Bunker Fuel Management Page 18 of 29 coordinated process in which the Class Manager/OPCO is aware of the risk and cost associated with these evolutions. Bunker fuel transfers to a shipyard need the approval of the Class Manager.

3.15.4 Bunkers to another MSC Vessel: Bunker fuel being transferred to another MSC vessel shall be documented by a DD-1149 per Paragraph 3.16.1.

3.16 Bunker Fuel Requisitions

3.16.1 Government Sourced Fuel. Ship bunker or aviation fuel purchased from a DFSP, afloat DFSP should be documented on a DD Form 1149 per Appendix E. The original copy of the DD-1149 shall be submitted by the requisitioner at the time of fueling to DFSP or FEA. Do not send copies of the DD-1149 to the Defense Finance and Accounting Service (DFAS).

3.16.2 A copy of each DD-1149 should be forwarded by the preparer to the MSC Accounting Office responsible for the ship within 24 hours of DD-1149 issuance.

a. MSC N82 PM1/PM2 GOGO ships and PM2 GOCO

SMS/TAGOS ships, forward via email to:

MSFSC_N8_fuel@navy.mil or fax to (757) 443-2941

b. MSC N82 PM2 time chartered ships and all PM3/PM5 ships to include RRF, forward via email to:

MSCHQ_N8_fuel@navy.mil or fax to (202) 685-5276

3.16.3 Government Sourced Commercial Fuel. Bunker contracts are agreements, negotiated by DLA Energy, the U.S. Government has made with commercial petroleum suppliers around the world. The Ships’ Bunkers’ Easy Acquisition (SEACARD®) System shall be used for all procurements under DLA Energy bunker contracts.

The SEACARD® program is based on a web system known as SCOMS® (SEACARD® Order Management System). It enables the electronic capture of delivery information and eliminates most of the paper from the bunker fuel acquisition process. A SEA CARD ® Ordering Officer will create an order in the SEACARD® system.

SEA CARD® generates an electronic DD1155 which documents the transaction. All required purchase info for a SEACARD ® purchase is obtained by the appropriate MSC accounting office via the SEACARD® Program Report Manager.

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3.16.4 Open Market Commercial Fuel. The procurement of commercial fuel on the open market is documented through a DD 1155. Open market fuels can be obtained using one of the following processes:

a. SEA Card® Open Market (GOGO only). The Area Command

Accountable Official enters the fuel bunker requirements into SEACARD ® Open Market. When the order has been accepted/awarded by the DLA Energy Accountable Official (DLA Energy Contracting Officer), the SEACARD ® system will automatically generate a DD Form 1155. The Area Command Accountable Official will notify the ship of the award information.

b. Contract Operator Open Market. The Area Command will notify the Program Manager (PM) that Government Sourced Fuel is unavailable. The PM will advise the Ship Manager/Operating Contractor (OPCO) the need to obtain commercial sources for the bunker fuel. The Ship Manager/OPCO will pursue offers from commercial vendors.

After receipt of offers, the OPCO will submit their recommendations, along with their request for consent to award a subcontract to the low price technically acceptable offeror, to the MSC Contracting Officer. The MSC Contracting Officer will review the submission with the Program Manager and provide technical approval and funding for the fuel request by generating a purchase request (PR) in the FMS. The Contracting Officer executes a contract modification to add funds to the contract for this fuel purchase. If sufficient funding is available under the contract, the Contracting Officer consent to subcontract will be provided via e-mail letter to the OPCO to procure the fuel for the price provided by the Contract Operator.

c. FISC Husbanding Contract (GOGO only). The Area

Command will notify the Program Manager (PM) that Government Sourced Fuel is unavailable. The Area Command/MSC N10 will assist the Ship’s Ordering officer with the appropriate CLIN and procedures to order fuel with the husbanding agent using a DD Form 1155.

d. MSC Contracting Officer. The Area Command will identify potential suppliers and the ship will submit a Material Order Requirement (MOR) via the MSC Supply Chain. MSC/SSU will award a contract and notify the Area Command, Ship

Bunker Fuel Management Page 20 of 29 and Class Manager regarding the information to support the bunker transaction.

3.16.5 Availability of Funds to procure fuel. As an essential expenditure needed to conduct ship operations, fuel procurements do not require advance certifications of funds availability before the issuance of a DD-1149/1155 or for the order of fuel through the SEACARD(R) system. However, to ensure sufficient funds are available, monthly monitoring of fuel funds availability by ship will be performed by N81 employees at MSCHQ or MSC Norfolk.

Potential ship fuel fund availability shortages will be forwarded to the ship Project Officer for resolution and/or offset to ensure no ship exceeds it execution budget amount.

3.17 Bunker Fuel Acceptance and Receipting

3.17.1 Government Sourced Fuel. When Bunker requirements are placed at a DFSP or afloat DFSP using a DD1149, the Ship or Activity which generated the DD1149 shall be responsible for submitting an annotated DD1149 and forwarding this documentation to MSC N82 or MSCHQ N8 per Paragraph 3.16.

a. The ship will receive a Bunker Delivery Note from the DFSP.

The receiving ship should review the BDN and perform tasks identified in Paragraph 3.8 to verify fuel quantity received.

The DD1149 should be annotated with the actual quantity of fuel received and the name of the DFSP on the DD1149 at the time of receipt.

b. If quantity is being disputed, the ship should indicate on the annotated DD1149 of the disputed quantity and advise both the Area Command and MSCHQ N7 via email msc.MSCHQ- Fuel.fct@navy.mil. MSCHQ N8 shall be responsible for entering the appropriate receipts in FMS based on this documentation.

3.17.2 Government Sourced Commercial Fuel (Bunker Contracts and

Open Market). The Area Command Ordering Officer enters the bunker requirements into the SEACARD® program for bunker contract requirements. Under the SEACARD® Open Market system the Area Command Accountable Official acts as the Ordering officer and enters the requirement. In both processes, the fuel supplier provides the ship a BDN which indicates amount of fuel delivered. This ship should sign the BDN if they concur with

Bunker Fuel Management Page 21 of 29 delivered fuel amount and submit BDN via fax or email to Accountable Official within 48 hours of bunkering event. The Accountable Official will review the BDN and shall authorize all final acceptance and receipt of fuel provided to a ship within their operating area.

a. Bunker contract. The Accountable Official shall review and approve all pre-priced demurrage and ancillary charges submitted by the bunker contractor within SEACARD® for the fuel deliveries made with their OPAREA. If fuel quantity is being disputed the ship shall indicate same on the BDN and advise MSCHQ N7 and Area Command via fax or email.

Any disputed pre-priced ancillary charge shall be forwarded via an email to MSCHQ N7 via email msc.MSCHQ- Fuel.fct@navy.mil.

b. Open Market. Un-priced ancillary charges such as demurrage shall be processed according to SEA Card® instructions. Unpriced ancillary charges shall be forwarded by the ship to the Area Command. The Area Command will investigate and notify MSCH N7 of the un-priced ancillary charge with amplifying details and their recommendations.

MSCHQ N7 will notify the DLA Energy that there is an un-priced claim against the DESC bunker contract requiring negotiation. Once the price has been negotiated by the DLA Energy Contracting Officer, the MSCHQ N7 shall be notified.

MSCHQ N7/APC shall then log into the SCOMS and approve the ancillary charges. The MSCHQ N7/APC shall obtain project and task information from the PM to create/prepare the requisition (DD Form 1155) within FMS so that payment can be made when MSC receives the invoice.

3.17.3 Contract Operator (GOCO, COCO). The Ship Manager/OPCO will bill the Government the actual cost of the fuel (excluding G&A, OH, Profit) as a reimbursable item under the contract and provide original receipts to substantiate the cost.

3.17.4 FISC Husband Contract (GOGO only). The Area Command will notify the PM that Government Sourced Fuel is unavailable. The Area Command/MSC N10 will assist the Ship's Ordering officer with the appropriate CLIN and procedures to order fuel with the husbanding agent using a DD Form 1155.

Bunker Fuel Management Page 22 of 29

3.17.5 MSC Contracting Officer. The Area Command will identify potential suppliers and the ship will submit a Material Order Requirement (MOR) via the MSC Supply Chain. MSC/SSU will award a contract and notify the Area Command, Ship and Class Manager regarding the information to support the bunker transaction.

3.18 Foreign Exchange Agreement (FEA)

3.18.1 Foreign Exchange Agreements may have been negotiated between

DoD and the foreign government. The existence of a fuel agreement affects how and when fuel transfers are reconciled with each foreign government but doe not impact how the event is documented. Most bunker fuel oil FEA evolutions will be directed by the cognizant Area Command. FEA bunker receipts and transfers require specific information to be filed with Defense Energy Support Center (RR). The following paragraphs are provided to ensure MSC receives proper credit for bunkers delivered to foreign ships or helicopter squadrons and to provide funding to foreign governments when receiving FEA fuel. All receiving and transferring of FEA documents shall be sent to MSCHQ_N8_Fuel@navy.mil.

3.18.2 FEA Receipts: The receiving ship will report the quantity delivered by the delivering activity on a DD-1149. The following is the minimum information required:

Block 1-Enter the name, hull number, and DODAAC (service designator and unit identification code.

Example; N22203.

Block 2-Enter the nationality, name and hull number of the issuing unit.

Block 3-Enter: “Same as block 1”.

Block 4- Accounting Data-Leave it blank.

Block 5- Requisition Date; example 3 Jan 2006. The requisition date must be the same date as the Julian date of the requisition number.

Block 6- Requisition number is the service identifier, DODAAC, Julian date, and a 4 digit serial number.

Example; N22203-6289-F001.

Block 7-Date the material is required.

Block 8- Leave this block blank.

Block 9-Enter “Fuel Exchange Agreement.”

Block 10-Signature; enter the name, rank/grade of the

Supply Officer or the authorized representative.

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3.18.3 FEA Documents: A copy of the DD-1149 used to transfer FEA fuel to a foreign ship or a DD-1149 received by a foreign ship when transferring ship’s bunkers shall be sent to the address listed below. This will ensure that DESC correctly credits fuel at the standard rate to the appropriate fuel account:

DESC-RR

BLDG 1621-K

1014 Billy Mitchell Blvd San Antonio, TX 78226

4 RECORDS & REPORTS:

4.1 Form N0712-001.1-F, Bunker Plans, filed with Area Commands

4.2 Form N0712-001.2-F, Protest Letter

4.3 Oil Record Books

4.4 Bunker Delivery Note (BDN). The specific BDN information as required by Appendix V of MARPOL Annex VI shall include:

Name and IMO number of receiving ship. (Note: In the case of

NFAF ships that do not have an IMO number, the international call sign shall be used.)

Port of bunkering Date of commencement of delivery Name, address, and phone number of fuel oil supplier Product name Quantity in metric tons of bunkers delivered Density at 15 degrees Centigrade (kg/m3) Sulfur content in percentage (m/m) A declaration signed by the fuel oil supplier’s representative certifying that the fuel oil supplied is in conformity with the requirements of MARPOL Annex VI.

4.5 4020 Report

4.6 DD-1149 (See Appendix E)

4.7 The Navy Energy Usage Reporting System (NEURS) is a monthly reporting of fuel usage required by OPNAVINST 4100.11 series. The purpose of the NEURS is to report monthly bunker fuel purchases, transfers, and consumption.

Bunker Fuel Management Page 24 of 29

4.7.1 MSC is required to provide NEURS data annually to the Center for

Naval Analysis (CNA).

4.7.2 All ships must submit NEURS reports to MSCHQ by the end of the third day of the next month for the reporting period. Appendix D provides the MSC NEURS reporting format. NEURS reports will be required regardless of the ship’s operational status (ROS, FOS, ROH, MTA, or CIVMOD). Reports may be sent via naval message or email. The preferred method is via email to MSCHQ- NEURS@Navy.mil and info the applicable Program/Class Manager. For email and naval message submittals, the ship must include the word “NEURS” and the reporting month in the subject line. MSC encourages the use of the NEURS spreadsheet which can be requested via the above email.

4.7.3 MARAD ships when under the operational control of MSC are required to submit NEURS reports.

5 REFERENCES:

5.1 DOD 4140.25M Volume II Petroleum Management

5.2 NAVSUP 4026.1 Fuel Management and Accounting Afloat

5.3 33CFR156, Oil and Hazardous Material Transfer

5.4 MARPOL Annex VI, Prevention of Air Pollution from Ships

5.5 MSC SMS Procedure 7.4-004-ALL, Bunkering from Shore and Ship’s

Lube Oil

5.6 ASTM Petroleum Measurement Table 54B, Generalized Products, Correction of Volume to 15°C Against Density to 15°C

5.7 OPNAVINST 4100.11, Navy Energy Usage Reporting System (NEURS)

5.8 MILSTD 3004, Quality Surveillance For Fuels, Lubricants, And Related

Products

5.9 DD Form 1149, Requisition and Invoice/Shipping

5.10 NSTM 542, Gasoline and JP5 Fuel Systems

Bunker Fuel Management Page 25 of 29

5.11 N0712-001.3-F, SEALOG and Accountable Official Listing

5.12 N0720-202.00-AQ, Navy Energy User Reporting System (NEURS) Bunker

Inventory and Reporting Consuption

6 DEFINITIONS:

6.1 Afloat DFSP is a T-AKE, T-AOE, and T-AO which carry DLA Energy products.

6.2 Area of Responsibility (AOR) is a pre-defined geographic region assigned to MSC Area Commands.

6.3 Bunker Delivery Note (BDN) is a document provided by the supplier of bunker fuel. The BDN shall comply with the requirements of MARPOL Annex VI, regulation 18(3), Appendix V.

6.4 Bunker Fuel is that fuel consumed by the ship for propulsion, auxiliary equipment, and helo operations.

6.5 Clear and bright criteria apply to distillate fuels only. Clear is the absence of visible solids, a cloud, haze, an emulsions, or free water in the product.

Bright is the sparkle of clean, dry product in transmitted light.

6.6 Continuous drip sampler is a fuel oil sampling device that provides a continuous sample of the fuel oil passing through the ship’s bunker fuel manifold.

6.7 Contractor Owned Ship is any ship that is privately owned by a commercial company or individual and operated by a Contract Operator or operated under charter to MSC.

6.8 Defense Energy Support Center (DESC) is an organizational component of the Defense Logistics Agency (DLA). DESC is the integrated manager/DoD central procurement agent for bulk petroleum, natural, gas, coal and associated services. DESC (DLA) owns and manages the bulk petroleum products in the Defense Department to the point-of-sale (end use) to the Military Services or Federal Agency.

6.9 Demurrage is a charge or penalty paid to a common carrier making fuel deliveries for undue delivery delays caused by the receiving party.

Bunker Fuel Management Page 26 of 29

6.10 DESC Ship’s Bunker Fuel Program is part of the Direct Delivery business unit of DESC. This program provides various grades of ship propulsion fuels for combatant ships, Coast Guard vessels and various classes of US government-owned and chartered ships at commercial ports worldwide.

6.11 Defense Fuel Support Point (DFSP) is a bulk fuel storage facility (or terminal) which receives, stores, and issues DLA-owned product in support of a Military Service or Federal Agency’s requirements. There are two categories of DFSPs: (1) intermediate and (2) base-level. Types of DFSPs include GOGO, GOCO, COCO, NATO, and Foreign Government.

6.12 Diesel Fuel Marine (F-76) is a 100% distillate fuel meeting the requirements of MIL-F-16884L or latest version. F-76 has very tight specification and storage/handling quality control requirements and a minimum Flash Point of 60 deg C (140Deg F). F-76 is a NATO standard distillate fuel. Older naval engineering terminology referred to F-76 as diesel Fuel Marine (DFM). F-76 is never dyed. Storage life is 2 years.

6.13 DoD-SCOMS is the automated online SEA Card Order Management System used by the Government in a real-time environment for ordering and tracking fuel deliveries.

6.14 Flash Point Flash Point is a measure of a fuel’s flammability. The flash point affects a fuel’s ease of ignition, flame spread rate once ignited, and extinguishing difficulty. As ambient temperature in a space approaches a fuel’s flash point, the presence of flammable vapors increases dramatically. Marine fuel, by definition (and by international law), must have a minimum flash point of 60 degrees Celsius (140 degrees Fahrenheit).

6.15 Free Water is water in a petroleum product other than dissolved water.

Free water may be in the form of droplets or haze suspended in the product and/or water layer at the bottom of the container.

6.16 Fuel Surveyor is an independent person who is present during the refueling or defueling of a ship. The Fuel Surveyor certifies the amount of fuel transferred.

6.17 Government Owned Ships is any ship owned by the government that is designated as a USS or USNS vessel and operated by either MSC Civilian Mariners (CIVMARS) or a Contract Operator.

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6.18 Government Sourced Fuel is fuel received from a Government contract or Government fuel facility. The Government is responsible for the quality of the fuel.

6.19 Logistics Requirements Message (LOGREQ) The message specifies port services required and other logistic requirements, such as fresh fruits and vegetables, vehicles, telephones, medical appointments, fuel, etc.

6.20 Marine Gas Oil (MGO) is a 100% distillate fuel meeting the requirements of ISO-8217:2005, Grade DMA. Approximate shelf life is 6 years.

6.21 MSC Bunker Fuel Manager is responsible for overseeing all matters related to the development and implementation of command-wide policy related to the procurement and management of bunker fuels. MSCHQ Engineering Director (N7) is the designated Bunker Fuel Manager for

MSC.

6.22 Off-ship Fuel Quality sample is a representative sample derived from the primary sample that shall be submitted to a fuel testing facility ashore for analysis.

6.23 Open Market is a module in DoD-SCOMS that allows merchants to submit price quotes against DoD and federal/civilian agencies fuel requests where there isn’t a DLA-ENERGY bunker contract in place.

6.24 Operating Company (OPCO)

6.25 Operational Control (OPCON) is the authority to perform those…