Pilot Travel Negotations (1).pdf

Saratoga Rack Marketing LLC 20 Greenway Plaza, Suite 200 Houston, TX 77046 865.474.2562

Proprietary & Confidential

October 13, 2022

Ms. Kim Matura ADOT Procurement 1739 W. Jackson St Suite A, MD 100P Phoenix, Arizona 85007

Dear Ms. Matura:

Please find enclosed with attachments and responses below to the points of negotiations and our discussion. I have listed the points below with the response items.

1. Forced Labor of Ethnic Uyghurs Ban (as attached)

This completed and signed document can be found in the attachments to this email.

2. Method of Approach

Question One (1) Method of Approach.

o Please find an expanded Method of Approach document attached.

3. Experience and Capacity

Question One (1) Inventory and Logistics o A revised Ability and Capacity document is attached to clarify this question.

Question Two (2) Disaster Plan o The Emergency Plan document has been revised to lend further support to needs of ADOT.

4. Pricing

Saratoga confirms that pricing provided is correct.

5. Confidentiality and Trade Secrets.

ADOT’s position on this topic is accepted.

Attachments: Forced Labor of Ethnic Uyghurs; Revised Method of Approach; Revised Ability and Capacity; Revised Emergency Plan; Response Letter. (5)

Should you require further or more detailed information, it will gladly be provided. These revised responses should clarify the questions presented in the Negotiations.

DocuSign Envelope ID: 08619569-8D54-4A17-BD7B-95C0BA9AB710

Saratoga Rack Marketing LLC 20 Greenway Plaza, Suite 200 Houston, TX 77046 865.474.2562

Thank you for your continued interest in Saratoga Rack Marketing’s offer to ADOT. We look forward to your response and further consideration of our offer.

Pricing, supply or delivery questions may be directed to Josh Epperson at 865.410.4384 or Josh.Epperson@Saratogarack.com.

Sincerely, Bill Cashmareck Vice President, Business Development P - 865.474.4335 Bill.Cashmareck@PilotCompany.com

DocuSign Envelope ID: 08619569-8D54-4A17-BD7B-95C0BA9AB710 mailto:Josh.Epperson@Saratogarack.com mailto:Bill.Cashmareck@PilotCompany.com

ADOT

Solicitation Number: BPM004763

Saratoga Proposal

Saratoga Rack Marketing LLC 5508 Lonas Dr. Knoxville, TN 37909 865.474.2562

Emergency Plan

Saratoga’s security of supply, logistics capabilities and IT Network systems are the three pillars of our emergency infrastructure response/natural disaster plan to aid our customers in critical times. Please note how Saratoga is a reliable fuel provider that can ensure effective delivery and execution to eligible agencies:

Saratoga has a procedure to be used as a general guideline for our Field Operators and Support Center team members in the event of supply disruption emergencies. This handbook outlines appropriate actions and steps are taken to:

• Ensure we provide an un-interrupted supply of fuel to our customers without any allocations or limits (if possible)

• Protect and preserve human life

• Provide stability and support for our team members

• Safeguard the environment and ensure compliance with Federal, State and local regulatory requirements

• Support our community by providing fuel, food and supplies to law enforcement and emergency personnel

Saratoga’s Risk Management group oversees all possible infrastructure, that includes pipe or refinery damage, and natural disaster activity. Once an unforeseen infrastructure event has occurred or a natural disaster has been identified with a high probability, our Emergency Response Coordinate (ERC) will active our Response Plan. The ERC will communicate all meeting specifics to the Support Center and Field Response Teams. This meeting is mandatory and will take precedent over all other meetings. Below is a general overview and summary of the Response Plan:

1. Immediately following response activation

a. A conference call is initiated to include the Support Center Emergency Response

Team (SCRT), Division Director, Region Manager, General Manager, and other support individuals

b. SCRT identifies all potential or impacted fueling locations and customers

2. Preparation

a. Additional transport drivers are positioned to support short-term increased volumes in affected areas

b. Fuel tanks at potential impacted sites are filled to maximum fuel capacity

c. Communication updates go out to our trucking customers and clients

d. All vendors are contacted to evaluate post unforeseen infrastructure event or natural disaster readiness

3. Post Unforeseen Infrastructure Event or Natural Disaster

a. Re-establish communications if applicable

b. Contact and collaborate with fueling clients for fueling needs

c. Coordinate with transport drivers for emergency fuel delivery in affected areas

In referencing the specific ADOT proposal, Saratoga stands ready to support ADOT and its cooperative members through utilization of the substantial fuel infrastructure and delivery resources available through Saratoga, Pro Petroleum, Pilot and SC Fuels as referenced in the enclosed Method of Approach.

The risk of both infrastructure, refining and supply disruptions as well as natural events that may occur including floods and pandemics, Saratoga is prepared to meet any of these disruptions in the normal flow of business. As we have recently gone through a pandemic that tested even the most prepared of organizations, Saratoga, including Pro Petroleum as essential workforce, was able to remain fully operational by incorporating measures to protect our staff and our customers throughout the pandemic. Those measure included exposure tracking, truck cleaning after each shift, single staff trucking and other measures targeting staff and public safety.

In other parts of the country, including the states subject to hurricane damage and flooding, Saratoga stays in contact with FEMA representatives to ensure that fuel is being delivered where it is most needed. As we recognize our size and strength in the markets that we operate, ensuring a continuation of necessary fuel supply to first responders and essential operations is highly important to us as an organization. In emergency and disaster situations, Saratoga receives high praise from its customers primarily due to our responsiveness, planning and consistency.

Saratoga’s value and depth is on display during emergencies and disasters, including pandemic events, and based on our customer’s comments and appreciation, we come through for them each time. Saratoga is already prepared for the next event, wherever that may occur and is also prepared to consistently supply and provide service to ADOT and its cooperative members.

Method of Approach

For this project, Saratoga proposes to supply and deliver to the Arizona Department of Transportation (ADOT), and its cooperative agencies the highest quality, ASTM D4814-01A gasoline fuel, ASTM D975-02 Ultra Low Sulfur Diesel fuel, Dyed Ultra Low Sulfur Diesel fuel and winterized products as needed, delivering as required by the bid solicitation. These products will be delivered via company owned vehicles (Pro Petroleum, Pilot) primarily and supplied from Pilot owned terminal facilities and product sources. There may be redundant carrier partners included to maximize delivery efficiency. The Phoenix and Tucson, AZ terminal facilities will be primarily utilized, supported by the Las Vegas facility. Surrounding terminals throughout the Southwest may also be utilized if needed. Saratoga can provide and maintain electronic tank monitors to manage fuel inventories to automatically dispatch and deliver products as required or requested for operational success. Otherwise, the existing order processes in place will continue unless modified by the State or agency.

Significant experience and assets as well as operational controls are leveraged in order to continue providing these products to the State of Arizona and its cooperative agencies, one of our most valued and key customers in the Southwestern U.S. marketing area. Experience related to maximizing value through logistical expertise, identifying areas to save and make efficient are all part of the Saratoga offer to the State.

In consideration that Pro Petroleum, an entity of Pilot Travel Centers, LLC, just as Saratoga, currently supplies a significant portion of the existing contract. As a long term and incumbent provider to the State, a renewal or new award of those locations will be easily transferred as the data and the operational knowledge are already in place. A unique factor in the supply and delivery of products to the State of Arizona is that Pro Petroleum/Saratoga control all aspects of the fuel delivered from the refinery all the way through the delivery and invoicing of the product.

Those steps of control would include control from the production at the refinery to the pipeline and to the terminal. In most cases owning the assets required to move each of those gallons to our end user customers. This provides the necessary safety net and security of supply required by the State.

In support of the ADOT fuel program, Saratoga, Pilot and Pro assets are made available for safe and efficient supply and delivery. With 111 fuel delivery vehicles and ownership of not only the Phoenix Pro fuel terminal and El Mirage trans mix facility, Saratoga is also shipping hundreds of thousands of diesel and gasoline barrels monthly on both the East and West pipelines in addition to producing significant amounts of fuel from the trans mix facility. In addition to these assets on the ready, Saratoga has terminal and rail capabilities in Las Vegas. SC Fuels in California, another wholly owned subsidiary of Pilot, has additional resources, only 5 hours away. This consolidation of resources and assets provides the State of Arizona, ADOT and its cooperative members with significant and readily available fuel from Pilot’s own assets in product terminals, storage, rail and pipeline shipping, in addition to redundant resources nearby. In partnership with ADOT, Saratoga has substantial fuel infrastructure and resources to fully support the entire fuel program and the ability to continue supplying during any level emergency or natural disaster.

Pricing will be accomplished via the published Oil Price Information Service (OPIS) Phoenix OPIS Daily AM Average (Rack Rate), plus a fixed increment that will include vendor markups.

These items will be separate line items as required by 6.1.1 and 6.1.2

Currently Saratoga uses the winter Afton additive in diesel and will transition to the MCC winter additive in the future. Please note the spec sheets for Afton and MCC are attached at the end of this section. As this bid does require the supply of winterized diesel products, Saratoga has completed a review of product error codes that occurred during the last winter season, mostly due to company systems transitions. Since that time, significant efforts have been made to make the necessary product code changes and deletions to support ADOT and its cooperative agencies.

We are aware that some of these product code errors may have created some operational disruptions due to diesel gelling. In response, we have modified our systems and product codes to ensure winter product compliance. Winterized products will be distributed from the Pro terminal racks, blended at the terminal level. The locations requiring season long winterization will be product coded only to deliver that product when diesel is ordered. This should resolve inconsistent fuel additive blends resulting in gelling issues. Saratoga will additionally support providing a pallet of readily available winter diesel additive to particularly cold areas such as Kingman and Flagstaff if requested to do so and the facility has the necessary storage for it.

Saratoga will provide a dedicated service representative that will be the main point of contact assigned to the ADOT and cooperative accounts. This individual, who is a Customer Support Specialist, will oversee all billing, order, setups, and administrative issues for ADOT throughout the contract term. Providing this single contact point will allow for efficient operational support for the contract. From required reporting, administrative fee reconciliation as well as setups, invoicing inquiries, issue resolution and other day to day administrative duties, this individual, with additional backup and access to all company specialists and resources will provide the contract with a consistent, knowledgeable, and resourceful primary contact for the ongoing support of the ADOT contract.

7. Contractor’s Responsibilities

Saratoga Rack Marketing will comply with all items in 7.0-7.8

Evaluation Process

4.1. Clarifications: In accordance with A.A.C. R2-7-C313, upon receipt and opening of offers submitted in response to this solicitation, ADOT may request oral or written clarifications, including demonstrations or questions and answers, for the sole purpose of information gathering or eliminating minor informalities or correcting nonjudgmental mistakes in offers.

Clarifications shall not otherwise afford the Offerors the opportunity to alter or make a material change in its proposal.

Agreed.

4.2. Responsibility, Responsiveness and Susceptibility: In accordance with A.R.S. 41-2534(G), and A.A.C. R2-7-C311, A.A.C. R2-7-C312 and R2-7-C316, the State shall consider at a minimum, the following criteria in determining Offerors' responsibility as well as the proposal’s responsiveness and susceptibility for Contract award.

Agreed.

4.2.1. Whether the Offeror has had a contract within the last five (5) years that was terminated for cause due to breach or similar failure to comply with the terms of the contract

Neither Saratoga nor Pro has had a terminated contract for cause within the last five years.

4.2.2. Whether the Offeror’s record of performance includes factual evidence of failure to satisfy the terms of the Offeror’s agreements with any party to a contract. Factual evidence may consist of documented vendor performance reports, customer complaints and/or negative references;

No factual evidence of failure is available that we are aware of.

4.2.3. Whether the Offeror is legally qualified to contract with the State and the Offeror’s financial, business, personnel, or other resources, including subcontractors;

Saratoga is legally qualified to contract with the State and any additional financial, business, personnel or other resources, including subcontracts will be provided to the State as required as part of its consideration of our offer.

4.2.3.1. Legally qualified includes if the vendor or if key personnel have been debarred, suspended or otherwise lawfully prohibited from participating in any public procurement activity, including but not limited to, being disapproved as a subcontractor of any public procurement unit or other governmental body;

Neither Saratoga or its key personnel have been debarred, suspended or otherwise prohibited from participating in any public procurement activity.

4.2.4. Whether the Offeror promptly supplied all requested information concerning its responsibility;

Please find enclosed in our submission related documents and information as requested. If any more is required, please request and it will be promptly returned.

4.2.5. Whether the Offer was sufficient to permit evaluation by the State, in accordance with the evaluation criteria identified in the solicitation or other necessary offer components. Necessary offer components include: attachments, documents or forms to be submitted with the offer, an indication of the intent to be bound, reasonable or acceptable approach to perform the Scope of Work, acknowledged Solicitation Amendments, references to include experience verification, Specific Requirements:

17. Administrative Fee. 18. Administrative Fee Reporting

Saratoga will comply as it does now through its existing contract through Pro Petroleum. All gallons will be reported and the administrative fee will be paid on for cooperative members purchases.

Should Saratoga Rack Marketing LLC be awarded this contract or a portion thereof, we will follow our New Customer Setup Procedure in order to ensure a smooth transition to a new contract or replacing an existing vendor. All Saratoga clients are assigned a direct customer success specialist (CSS) who will be the main point of contact, that has direct phone line and email, to handle account inquiries. This individual works directly with the Saratoga client account marketer, billing department and wholesale order fulfilment center to make sure our clients are very satisfied with our fuel supply services throughout contract duration.

ADOT and its COOP members will all share one CSS under the same contract for streamlined contract and service management. Additionally, our central and regional dispatch officer, open 24 hours a day, seven days a week, 365 days a year including holidays, employ the latest communication and tracking technology to exceed our ADOT’s fueling needs.

Procurement Adequacy of financial/business/personal or other resources to include a performance bond and stability including subcontractors and any other data specifically requested in the Solicitation;

4.2.6. Whether the Offer was in conformance with the requirements contained in the Scope of Work, Terms and Conditions, and Instructions for the Solicitation including its Amendments and all documents incorporated by reference;

4.2.7. Whether the Offer limits the rights of the State;

4.2.8. Whether the Offer includes or is subject to unreasonable conditions, to include conditions upon the State necessary for successful Contract performance. The State shall be the sole determiner as to the reasonableness of a condition;

4.2.9. Whether the Offer materially changes the contents set forth in the Solicitation, which includes the Scope of Work, Terms and Conditions, or Instructions; and,

4.2.10. Whether the Offeror provides misleading or inaccurate information.

For any new locations that may be awarded to Saratoga, an efficient set up and delivery process will occur, consistent with the existing processes in place or flexible enough to support Arizona’s needs.

Ability and Capacity

Saratoga Rack Marketing LLC (Saratoga) is the energy and wholesale division of the Pilot Travel Centers LLC (Pilot), the seventh largest private U.S. company with $26.6 billion in revenue ranked by Forbes. Today Pilot has greater than 750 nationwide travel stop locations with 32 of them in Arizona. In addition, Pro Petroleum, a long-term provider of bulk fuel services to the State of Arizona, falls under this same organizational structure and will be the primary service provider for this agreement.

Saratoga has the infrastructure to the be the sole fuel supply and delivery service providers for Pilot, the largest diesel consumer in the country. This requires maintaining the necessary volumes, 1,700 transport vehicles and staff, inventory, and supply diversity. In addition, Saratoga provides the products for many of the country’s largest high-volume retailers and commercial industries.

Moving over five billion gallons annually in the wholesale space alone requires that the technical and management expertise is always staffed and available. Many of the industry’s leaders are members of Pilot’s 28,000 strong employee base.

Specific to this contract, the management of this agreement will fall under the Government Sales Division managed by Josh Epperson. He has over 30 years of experience in wholesale fuels with 23 of them focused specifically in the Government space with States, Counties, Cities, Defense Fuels and Transits.

The combination of Saratoga’s national and Arizona travel stop presence and end user customer base, large fuel inventory available in eight terminals throughout Arizona and Nevada, delivery capabilities and Josh Epperson’s experience all ensure Saratoga will be able to efficiently execute the Arizona Department of Transportation fuel supply agreement. The assets, experience, staffing and resources have all come together to provide ADOT with the fuel program necessary to exceed its requirements.

Saratoga, serving thousands of customers nationwide as well as providing fuel supply and delivery services throughout Arizona and the rest of the Southwestern U.S. has significant resources and assets as well as staffing and systems to provide a superior customer experience based on efficiency, state of the art systems and responsiveness. Pro Petroleum, our sister company, has long provided fuel and services to ADOT and will continue to do so through this agreement. Through Pro’s legacy of leading supply capacity and delivery assets throughout Arizona, Saratoga is set up and prepared to meet and exceed the needs of ADOT and its cooperative agencies. As stated in the Method of Approach, the Capacity of Saratoga’s logistics and inventory is listed below:

In support of the ADOT fuel program, Saratoga, Pilot and Pro assets are made available for safe and efficient supply and delivery. With 111 fuel delivery vehicles and ownership of not only the Phoenix Pro fuel terminal and El Mirage trans mix facility, but Saratoga is also shipping hundreds of thousands of diesel and gasoline barrels monthly on both the East and West pipelines in addition to producing significant amounts of fuel from the trans mix facility.

In addition to these assets on the ready, Saratoga has terminal and rail capabilities in Las Vegas.

SC Fuels in California, another wholly owned subsidiary of Pilot, has additional resources, only 5 hours away. This consolidation of resources and assets provides the State of Arizona, ADOT and its cooperative members with significant and readily available fuel from Pilot’s own assets in product terminals, storage, rail and pipeline shipping, in addition to redundant resources nearby.

In partnership with ADOT, Saratoga has substantial fuel infrastructure and resources to fully support the entire fuel program and the ability to continue supplying during any level emergency or natural disaster.

Procurement

ATTACHMENT [Enter Attachment No.]

FORCED LABOR OF ETHNIC UYGHURS BAN

Solicitation No: BPM Available online at https://app.az.gov

SPO Form 205 (rev 09-2022)

Forced Labor of Ethnic Uyghurs Ban Please note that if any of the following apply to the Contractor, then the Offeror shall select the “Exempt Contractor” option below:

• Contractor is a sole proprietorship;

• Contractor has fewer than ten (10) employees; OR

• Contractor is a non-profit organization.

Pursuant to A.R.S. § 35-394, the State of Arizona prohibits a public entity from entering into or renewing a contract with a company unless the contract includes written certification that the company does not use the forced labor, or any goods or services produced by the forced labor, of ethnic Uyghurs in the People's Republic of China.

Under A.R.S. §35-394:

1. "Company" means an organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company or other entity or business association, including a wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate, that engages in for-profit activity and that has ten or more full-time employees.

(a) Based in part on the fact that the entity does business in Israel or in territories controlled by Israel.

(b) In a manner that discriminates on the basis of nationality, national origin or religion and that is not based on a valid business reason.

2. "Public entity" means this State, a political subdivision of this State or an agency, board, commission or department of this State or a political subdivision of this State.

In compliance with A.R.S. §§ 35-394 et seq., all offerors must select one of the following:

The Company submitting this Offer does not use, and agrees not to use during the term of the contract, any of the following:

• Forced labor of ethnic Uyghurs in the People’s Republic of China;

• Any goods or services produced by the forced labor of ethnic Uyghurs in the People’s Republic of China; or

• Any Contractors, Subcontractors, or suppliers that use the forced labor or any goods or services produced by the forced labor of ethnic Uyghurs in the People’s Republic of China.

☐ The Company submitting this Offer does participate in use of Forced Uyghurs Labor as described in A.R.S. § 35-394.

Exempt Contractor.

Indicate which of the following statements applies to this Contractor (may be more than one):

☐ Contractor is a sole proprietorship;

☐ Contractor has fewer than ten (10) employees; and/or ☐ Contractor is a non-profit organization.

Company Name Signature of Person Authorized to Sign

Address Printed Name

City State Zip Title

Saratoga Rack Marketing LLC

Bill Cashmareck

Vice President Business Development

5508 Lonas Dr.

Knoxville TN 37909

DocuSign Envelope ID: 08619569-8D54-4A17-BD7B-95C0BA9AB710 https://app.az.gov/