COG 4 - Master Presentation.pdf

Welcome

DEFENSE ENERGY SUPPORT CENTER (DESC)

PRE-PROPOSAL CONFERENCE

CUSTOMER ORGANIZED GROUP (COG) 4

MASTER (BASIC) SOLICITATION

Presented By:

Georgia Dotson, Contracting Officer Regina Gable, Contract Specialist Bruce Gunther, Contract Specialist

SOLICITATION NUMBER

SP0600-10-R-0214

Time Event

• 8:30 am– 9:00 am Check in / Late Registration

• 9:00 am – 9:15 am Opening Remarks / Conference Overview

Georgia Dotson, Contracting Officer

• 9:15am - 10:00am Contract Clauses (Pre-Award)

Bruce Gunther, Contract Specialist

• 10:00am - 10:15am Break

• 10:15am - 10:45am Contract Clauses Continued (Post Award)

Bruce Gunther, Contract Specialist

• 10:50am - 11:30am Product Quality, Contract Provisions and Fuels

Specifications Chuck Allyson, Quality Assurance Specialist

• 11:30am - 12:45pm LUNCH

• 12:45pm - 1:45pm Offeror Submission Package (OSP)

Regina Gable, Contract Specialist

• 1:45pm - 2:30pm Taxes

Georgia Dotson, Contracting Officer

• 2:30pm - 2:45pm Break

• 2:45pm - 3:15pm Procurement Integrity Overview

Georgia Dotson, Contracting Officer

• 3:30pm - 4:00pm Conference Wrap-up/Questions/Evaluations

Georgia Dotson, Contracting Officer

• *Subject to Change

Agenda

Direct Delivery Fuels Mission

Worldwide acquisition and integrated materiel management of fuels delivered directly to using activities by contracted vendors as required to support the Military Services, DoD Activities and designated Federal agencies.

http://images.google.com/imgres?imgurl=f-rams.com/images/kvnmote.jpg&imgrefurl=http://f-rams.com/f_examp1.html&h=305&w=432&prev=/images?q=Fuels+Trucks&svnum=10&hl=en&lr=&ie=UTF-8&oe=UTF-8&sa=N http://images.google.com/imgres?imgurl=www.power-technology.com/contractor_images/abb/abb1s.jpg&imgrefurl=http://www.power-technology.com/contractors/powerplantequip/abb/&h=154&w=150&prev=/images?q=Power+Plants&start=40&svnum=10&hl=en&lr=&ie=UTF-8&oe=UTF-8&sa=N

– Solicitations: For solicitations, amendments pertaining to commercial grade gasoline's, distillates and residual fuels visit Federal Business Opportunities Website (www.fbo.gov). Also visit the DESC home page. Check often for Amendments to the Solicitation

– Prices to Web: Web based application that posts price changes and escalation to the Internet.

– Contract Information System (CIS): Contains information on current Ground Fuels contracts and contract delivery requirements

– PORTS: (Paperless Ordering and Receipt Transaction Screens) Internet-based application designated to electronically process fuel transactions (orders, receipts, and contractor invoices) for DESC funded items-new changes to PORTS for the new ordering period will not allow individual invoicing of local fees/taxes (must be rolled up included in offer price).

Federal Excise tax is still invoiced as a separate line item

Doing Business With Direct Delivery

Ground Fuels Divisions

USEFUL WEBSITES

– Defense Energy Support Center: http://www.desc.dla.mil/default.asp

– Federal Business Opportunities: https://www.fbo.gov

– Central Contractor Registration: http://www.ccr.gov/

– Contract Information System: https://ports2.desc.dla.mil/cis.htm

– Ports: https://ports.desc.dla.mil/grndports/gports.htm

– Dun & Bradstreet: https://www.dnb.com

– Tax Guide: https://www.desc.dla.mil/DCM/DCMPage.asp?pageid=644

– Prices to Web: http://p2web.desc.dla.mil/pls/p2wp/dfsc_pkg.df_activity

Doing Business With Direct Delivery

COG 4 Purchase Program (3.24) Program Features

• Contract Features

– Three-Year contract period

– Contract Type: Requirements Fixed Price with Economic Price Adjustment

– Established contracts with companies and distributors

– Competitive pricing

• Product Specifications

– Commercial Specifications

• Delivery Conditions

– Product delivery FOB-Destination and Origin direct to customer via TT, TW, and TTR

– 48 hour delivery or unless otherwise stated in the schedule

– Single/Multiple drop deliveries

• Pricing/Payment

– Economic Price Adjustment (EPA) based on recognized market indicators

– Payment terms (Fill in Block 12, SF 1449) Net 30 days unless vendor indicated a discount

– Payment via EFT (except where narrative states payment will be made by credit card)

COG 4

Who are our Customers

FEDERAL CIVILIAN AGENCIES

• United States Postal Service (USPS)

• Department of Agriculture (DA)

• Department of Justice (DJ)

• Department of Veteran Affairs (VA)

• Department of Interior (DI)

• Bureau of Indian Affairs (BIA)

• Department of Homeland Security (DHLS)

• United States Information Agency (USIA)

• Treasury Department (DT)

• Social Security Administration (SSA)

• National Aeronautics and Space Administration

(NASA)

• Health and Human Services (HHS)

• Federal Emergency Management Agency

(FEMA)

• Department of Transportation (TD)

DEPARTMENT OF DEFENSE

• United States Army (USA)

• United States Navy (USN)

• United States Air Force (USAF)

• United States Marine Corps (USMC)

• United States Coast Guard (USCG)

• Department of Defense (DoD)

• Air Force National Guard (AFNG)

• Army National Guard (Army NG)

Understanding the COG 4 Solicitation

SP0600-10-R-0214

This is a negotiated procurement

• The Government reserves the right to award without discussions

• Requirements are the activities best estimate

• Requirements are for a three year period

• Alternative fuels posting for some E85 and B20 CLINS

• Exceptions to terms and conditions will be negotiated

• Everyone must submit a complete Offeror

Submission Package

• Solicitation closes: 18 March 2010, at 3:00 PM (ET)

• Fax and email offers are authorized

Offer Evaluation

Lowest Price Technically Acceptable

• Price (win/win)

1. Best value to the government

2. Vendor is capable of performing at award price

Lowest Price Technically Acceptable

• Technically acceptable (win/win)

1. Product quality

2. Financial capability

3. Fuel distribution network

Pre-Award Clauses

CLAUSE B1.01 (pg. 9)

• SUPPLIES TO BE FURNISHED (DOMESTIC PC&S) (DESC

MAR 1999)

– Shows the delivery narrative for all Department of

Defense CLIN’s

CLAUSE B1.01-2 (pg. 181)

• SUPPLIES TO BE FURNISHED (DOMESTIC PC&S)

(PORTS INTERNET APPLICATION) (DESC MAR 1999)

– Shows the delivery narratives for all Federal Civilian

CLIN’s

CLAUSE B18 (pg. 268 & Amendment 0001)

• SET ASIDE QUANTITIES (DESC FEB 1968)

– List the line items either partial or total for Set-Aside

Clause I1.07 (pg. 311)

CENTRAL CONTRACTOR REGISTRATION (ALTERNATE A) (APR

2008/SEP 2007)

– Prior to receiving an award you must be register in the CCR and you must maintain you CCR registration throughout the life of the contract

– Offerors not registered in the CCR will be determined (Non- Responsive) and deemed ineligible to receive a contract award

– To register with the CCR go to: http://www.ccr.gov/

Clause I84 (pg.318)

REQUIREMENTS (OCT 1995)

– Contracts awarded as a result of this solicitation will be

Requirements type fixed price contracts with an Economic Price Adjustment

– There are no minimum guarantees as the quantities provided in the delivery narratives are the Government’s best estimate

– Delivery or performance shall be made only as authorized by orders issued in accordance with the ORDERING clause

– The Government shall order from the Contractor all the supplies or services specified in the Schedule that are required to be purchased by the Government activity or activities specified in the Schedule

Clause I174 (Set-Aside Item Only) (pg. 326)

MANUFACTURING AND FILLING POINTS (SET ASIDES) (DESC APR

1996)

• To be eligible for the small business set aside item, as seen in Clause B18, offerors must supply product manufactured by a small refinery

• All small businesses interested in being considered for award of any set-aside items must provide the following information:

1. Set-aside item numbers and delivery location;

2. Name and address of small business refiner;

3. Refinery point of contact;

4. Name and address of the filling point (if different from refinery); and

5. Copy(ies) of the supply commitment(s)/agreement(s) from the proposed small business manufacturer(s)/refinery(ies), which must state, as a minimum, the type of product, total quantities of product for all items offered, and contract ordering period.

Clause K1.06 (pg. 255)

DATA UNIVERSAL NUMBERING SYSTEM (DUNS)

NUMBER (APR 2008)

– If the offeror does not have a DUNS number, it should contact Dun and Bradstreet directly to obtain one

– An offeror may obtain a DUNS number at: https://www.dnb.com

• Company legal business name

• Trade style, doing business, or other name by which your entity is commonly recognized

• Company physical street address, city, state, and Zip Code

• Company mailing address, city, state and Zip Code (if separate from physical)

• Company telephone number

• Date the company was started

• Number of employees at your location

• Chief executive officer/key manager

• Line of business (industry)

Clause L2.05-5 (pg. 236)

INSTRUCTIONS TO OFFERORS – COMMERCIAL ITEMS (PC&S)

(DESC MAR 2009)

– If this solicitation is amended, all terms and conditions that are not amended remain unchanged

– The offeror agrees to hold the prices in its offer firm for 120 calendar days from the date specified for receipt of offers, unless another time period is specified in an addendum to the solicitation

– Offerors are responsible for submitting offers, and any modifications, revisions, or withdrawals, so as to reach the Government office designated in the solicitation by the time specified in the solicitation

– While the Government intends to evaluate offers and award a contract without discussions, it reserves the right to conduct discussions if later determined by the Contracting Officer to be necessary

Clause L2.05-5 continued

INSTRUCTIONS TO OFFERORS – COMMERCIAL ITEMS

(PC&S) (DESC MAR 2009)

– If a post-award debriefing is given to requesting offerors, the Government shall disclose the following information, if applicable:

1. The agency’s evaluation of the significant weak or deficient factors in the debriefed offeror’s offer

2. The overall evaluated cost or price and technical rating of the successful and the debriefed offeror and past performance information on the debriefed offeror

3. The overall ranking of all offerors, when any ranking was developed by the agency during source selection

4. A summary of the rationale for award

5. For acquisitions of commercial items, the make and model of the item to be delivered by the successful offeror

Clause L54 (pg. 263)

SITE VISIT (DESC OCT 1992)

– It is the responsibility of the offerors/bidders to inspect the site where supplies are to be delivered and to obtain all available information about the site necessary to satisfy themselves about general and local conditions that may affect delivery and the cost of contract performance, to the extent that the information is reasonably obtainable.

Offerors/bidders are responsible for any costs incurred for any site inspection and for obtaining information

– In no event shall failure to inspect the site constitute grounds for a claim after contract award

Any Questions?

Post-Award Clauses

Clause B19.19 (pg. 268)

ECONOMIC PRICE ADJUSTMENT (PC&S) (DESC MAY 2007)

– Prices will escalate/de-escalate daily

– The term base reference price (BRP) means the reference price for an item as published on the date shown

– COG 4 Base Reference Date is January 4, 2010

– Base reference publications used are OPIS, AXXIS, and

Platt’s

Economic Price Adjustment Examples

• $2.5000 (Contract Award Price)

• -$2.1994 (OPIS Daily Charleston, ULSD Base Reference Price January 4, 2010)

• $0.3006 (escalation differential)

• $2.1889 (OPIS Daily Charleston, ULSD December 30, 2009

• +$0.3006 (escalation differential)

• $2.4895 (Delivery price on December 30, 2009) Below Contract Award Price

• $2.6589 (OPIS Daily Charleston, ULSD December 31, 2009

• +$0.3006 (escalation differential)

• $2.9595 (Delivery price on December 31, 2009) Above Contract Award Price

Clause F105 (pg. 300)

VARIATION IN QUANTITY (APR 1984)

– Variation in quantity of any item by this contract will not be accepted unless the variation has been caused by of loading, shipping, packing, or allowances in manufacturing processes.

– The permissible variation shall be limited to—

– 10 Percent increase

– 10 Percent decrease

Clause F1.09-2 (pg. 295)

DETERMINATION OF INVOICE QUANTITY (DESC JUN 2009)

– When quantity is determined without volume correction to 60 degrees Fahrenheit (15 degrees Celsius) as permitted in the DETERMINATION OF QUANTITY clause, paragraph (b), the shipping document (truck’s metered ticket) shall be annotated with the API gravity (or density), gross quantity

– The shipping document shall be annotated with the gross and net gallons (or gross and net liters)

– For deliveries when temperature compensating meters are used to determine quantity, the shipping document (truck’s metered ticket) shall be annotated with the API gravity (or density), net quantity, and a statement that a temperature compensating meter was used to determine quantity

Clause F1.09-2 continued

Methods

– The narrative requires a tank truck with meter, a truck and trailer with meter, or tank wagon (which is always equipped with a meter), that meter shall be used to determine invoice quantity at time of delivery

– (a) Using calibrated meter on the delivery conveyance. The quantity shall be read directly from the meter; or

– (b) Gauging the delivery conveyance. The certified capacity tables for the conveyance must be made available at the time of delivery (or a dipstick, calibrated for the truck maybe used). This method may not be used in areas where environmental restrictions prohibit the opening of dome hatches; or

– (c) Providing the receiving activity with the net quantity determined at the loading point by a calibrated loading rack meter or calibrated scales.

This quantity must be mechanically imprinted on the loading rack meter ticket that is generated by the loading rack meter or scale

Clause F1.09-2 cont’d

– The total invoice shall be the sum of the net diesel and gross B100

– When the B100 loading rack meters are capable to provide a net (volume corrected) quantity, the total invoice quantity shall be the sum of the net diesel and the net B100

– Invoice quantities for all residual fuels and invoice quantities for other products that are in excess of 5,000 gallons (or 18,900 liters) shall be converted to net gallons at 60 degrees Fahrenheit (or liters at 15 degrees Celsius), except for deliveries where the meter on the delivery conveyance is used to determine invoice quantity

Clause I186 (pg. 326)

PROTECTION OF GOVERNMENT PROPERTY AND

SPILL PREVENTION (DESC FEB 2009)

– The Contractor shall take all measures as required by law to prevent oil spills

– The Contractor shall be responsible for the containment, cleanup, and disposal of the oil spilled

– Should the Contractor fail or refuse to take the appropriate containment, cleanup, and disposal actions, the Government may do so itself and the Contractor shall reimburse the Government for all expenses incurred

I209.09 EXTENSION PROVISIONS (DESC JUL 2009)

• (a) The Government shall have the right to extend this contract on the same terms and conditions one or more times for a total of no more than six months. Notice of contract extension will be furnished to the Contractor not later than 30 days prior to expiration of the contract ordering period or any extension thereof. Nothing in this clause precludes the Contractor from agreeing to an extension of the contract if the DESC Contracting Officer fails to issue the notice prior to 30 days before the end of the ordering period.

• (b) Extension of this contract shall be considered to have been accomplished at the time the DESC Contracting Officer provides written notification to the Contractor..

Ports

PORTS (Paperless Ordering and Receipt Transaction Screens) (handout)

– Internet-based application designated to electronically process fuel transactions (orders, receipts, and contractor invoices) for DESC funded items (Army, Navy, Marines, Air Force, USCG, and DoD Customers). Federal Excise tax is still invoiced as a separate line item.

– PORTS Process

• Is a 6 step process

Any Questions?

COG 4 PRE-PROPOSAL

CONFERENCE

CHARLES ALLYSON

QUALITY ASSURANCE SPECIALIST

MARCH 9, 2010

DESC QUALITY BRIEF

QUALITY BRIEF

Introduction DESC Expectations

- Inspections

- Paperwork

Technical & Inspection Requirements “C” Clauses (Specifications) “E” Clauses (Inspection)

Pre-Award Survey

Identify All Sub-Contractors and Locations Supply Sources Specifications: If a spec is placed into a solicitation for a commercial item, that item is no longer strictly a commercial item. It becomes a specific government product.

Certificate of Analysis (COA) Commitment Letters We will identify the non-conformance in the survey initially and the offeror can make their changes, and or provide objective evidence of compliance.

Truck Deliveries

Responsible base/installation personnel shall examine accompanying paperwork, assuring the correct product, quantity, and location.

Tank compartments shall be sampled (all-level) and examined for workmanship.

If unable to take an all level sample from the compartment prior to discharge, then an in-line sample taken during discharge may be used.

If unable to do any of the above, a sample may be taken from the nozzle after discharging a volume of product estimated at two times the capacity of the piping system.

Diesel Fuels Ultra Low Sulfur Grades

ASTM D975, Clause C16.69

DS2 - Grade No 2-D S15 - No Dye DS1 - Grade No 1-D S15 - No Dye* DSS - Grade No 2-D S15 - Red Dye DSW - Grade No 1-D S15 - Red Dye SF2 - Grade No 2-D S15 (Low Temp) - No Dye

* #1 Diesel badly needed during the winter months.

Low Sulfur Grades

ASTM D 975, Clause C16.69

LS2 - Grade No 2-D S500 - No Dye 1 LS1 - Grade No 1-D S500 - No Dye 1 LSS - Grade No 2-D S500 - Red Dye 2 LSW - Grade No 1-D S500 - Red Dye 2 DLS - Grade No 2-D S500 - Red Dye 2 DLW - Grade No 1-D S500 - Red Dye 2

1 Has been completely phased out 2 Being phased out IAW transition schedule

High Sulfur Grades

ASTM D 975, Clause C16.69

HS2 - Grade No 2-D S5000 - Red Dye HS1 - Grade No 1-D S5000 - Red Dye DF2 - Grade No 2-D S5000 - Red Dye DF1 - Grade No 1-D S5000 - Red Dye

Non-Road Diesel Fuel Standards

WHO Covered Fuel 2009 2010 2012 2014 Large Refiners Non-Road 500 15 15 15 & Importers

Large Refiners Locomotive 500 500 15 15 & Importers & Marine

Small Refiners Non-Road 500+ 500 500 15 & Other Locomotive Exceptions & Marine

Biodiesel

ASTM D 975, ASTM D 6751, ASTM D 7467, Clause C16.27 ASTM International published its long-awaited set of standards for biodiesel blends in October 08. The new and newly revised Standards are used to define engine design, bid and purchasing Contracts, and to enforce fuel quality at the pump.

Biodiesel

Included is a specification for diesel fuel oil and biodiesel blends in the 6%-20% range (B6 to B20) for on and off-road diesel engine use as well as updates to the standards for B5 (5% biodiesel blends).

Previously ASTM had promulgated standards for 100% biodiesel and blenders could produce up to B20 if the biodiesel to be blended met that standard. This is the first time that standards have been set for fuel blends themselves. The new standards are:

ASTM D7467: The specification that covers finished fuel blends of between 6 and 20% biodiesel.

ASTM D975: Specification for Diesel Fuel Oils – Used for on- and off-road diesel applications; revised to include requirements for up to 5% biodiesel ASTM D396: Specification for Fuel Oils – Used for home heating and boiler applications, revised to include requirement for up to 5% biodiesel

Biodiesel

At this time DESC does not procure any Biodiesel that has been made from “Animal Fat”. But if that is the only method a vendor utilizes to create their Biodiesel and they still wish to do business with DESC, they should come in and formally ask for a “Waiver”. On a case by case basis the request will be reviewed to determine if the waiver can be accepted.

Biodiesel

NOTE

In Oregon B2 Biodiesel became mandatory year round throughout the entire state effective October 2009. In addition within the city of Portland the Biodiesel content requirement will increase from B5 to B10 effective July 2010.

Problematic Discrepancies

Cloud Point: The cloud point shall be equal to or lower than the 10th percentile minimum temperature specified in Appendix X4 to ASTM D 975. It is the low temperature at which wax crystals begin to form and the fuel becomes cloudy. When operating in temperatures at or below the cloud point filter clogging can be experienced by the gelling of the fuel.

Cold Filter Plugging Point (CFPP): If suppliers only measure (CFPP) instead of cloud point you MUST identify the seasonal maximum CFPP limits that you intend to meet in lieu of cloud point requirements and the line items to which you intend for this latitude to apply. Failure to do so will result in award of a contract that contains low temperature performance requirements stated in terms of cloud point.

Problematic Discrepancies

Flash Point: Is a measure of a fuel’s flammability. It affects a fuel’s ease of ignition, flame spread rate once ignited and extinguishing difficulty. As ambient temperatures in a space approaches a fuel’s Flash point, the presence of flammable vapors increases dramatically.

Blending: Comprises of a ratio of bio content to diesel @ (20/80) plus or minus1%. If a diesel grade is produced by mixing two components, then product must be blended prior to delivery. Manifold blending at time of delivery and blending in the receipt tank is not permitted.

FUEL OIL

ASTM D 396, Clause C16.69

FL2 - Fuel Oil Burner No 2 S500 - Red Dye FS1 - Fuel Oil Burner No 1 S5000 - Red Dye FS2 - Fuel Oil Burner No 2 S5000 - Red Dye FL4 - Fuel Oil Burner No 4 (Light) - Red Dye FS4 - Fuel Oil Burner No 4 - No Dye FL5 - Fuel Oil Burner No 5 (Light) - No Dye FS5 - Fuel Oil Burner No 5 (Heavy) – No Dye FS6 - Fuel Oil Burner No 6 - No Dye

KEROSENE

ASTM D 3699, Clause C16.69

Low Sulfur Grades: (.04 wt%)

• KS1 - Kerosene Grade No 1-K - No Dye

• KSR - Kerosene Grade No 1-K - Red Dye

High Sulfur Grades: (.30 wt%) KSN - Kerosene Grade No 2-K - Red Dye

NOTE: May use kerosene to meet #1 diesel fuel requirements

• Must certify that it meets the #1 specification

• Must call it #1 diesel

GASOLINE

ASTM D 4814, Clause C16.69

MUR - Gasoline Regular Unleaded (87) MUM - Gasoline Midgrade Unleaded (89) MUP - Gasoline Premium Unleaded (91)

* NOTE: Gasoline, Gasohol, and Reformulated Gasoline Reid Vapor Pressure (RVP) specs are seasonal and vary geographically throughout the U.S. Vendors are expected to know the local, State, or Federal RVP requirements of areas being supplied and comply with those requirements.

GASOHOL

ASTM D 4814, A-A-52530, Clause C16.69

GUR - Gasoline Regular Unleaded (87) GUM - Gasoline Midgrade Unleaded (89) GUP - Gasoline Premium Unleaded (91)

• 90% Unleaded Gasoline

• 10% Ethanol (+/-1%)

GASOHOL/GASOLINE DEBATE

Question:

Can Gasohol which as defined as having concentration of up to 10% Ethanol be issued to an installation in lieu of regular Gasoline?

Answer: Yes!

REFORMULATED GASOLINE

ASTM D 4814, Clause C16.69, 40 CFR Part 80

MRR – Reformulated Gasoline Regular (87) MMR - Reformulated Gasoline Midgrade (89) MPR - Reformulated Gasoline Premium (91)

Blending of permissible oxygenate into Reformulated Gasoline shall be accomplished by mechanical mixing or agitation in a tank or by in line blending prior to loading the product into transport equipment. The resultant product must meet contract requirements.

REFORMULATED GASOLINE

ASTM D 4814, Clause C16.69, 40 CFR Part 80

Phase II Reformulated Gasoline required

• 1.3% maximum benzene content

• No Heavy Metals

• 22% reduction in emissions of Toxic Pollutants

• 7% reduction in emissions of oxides of Nitrogen

• 27% reduction in emissions of volatile organic compounds (VOCs)

E-85

ASTM D 5798, Clause C16.14

Covers fuel blends for nominally 75 to 85 volume percent denatured fuel, ethanol, and 15 to 25 additional volume percent hydrocarbons.

For Air Force installations “only” product shall be delivered at the minimum ethanol volume percent content for Seasonal and Geographic Volatility Specifications for ethanol per ASTM D

E-85

ASTM D 5798 requires adjustment of the overall vapor pressure of finished fuel ethanol The means of changing the vapor pressure to accommodate seasonal and geographic requirements is by adjusting the ratio of alcohol (ethanol) to gasoline-like hydrocarbons

Problematic Discrepancies

• Blending: The ratio of Ethanol content to Hydrocarbon fuel is not met. Product not blended prior to delivery. Manifold blending at time of delivery and blending in the receipt tank is not permitted.

• Gum Content: Both Washed and Unwashed have often been found to be outside specification established requirements.

AVIATION GASOLINE

ASTM 910, Clause C16.15 Grade: 80/100LL

For product shipped to a US Navy owned or operated terminal, send one copy of each DD Form 250-1 covering marine movements, or for laboratory analysis reports covering rail, truck, or pipeline shipments to:

NAVAL OPERATIONAL LOGISTICS SUPPORT CENTER

8725 JOHN J. KINGMAN ROAD, SUITE 3719

FORT BELVOIR, VA. 22060

AVIATION GASOLINE

NOTE

The U.S. Environmental Protection Agency (EPA) is about to propose a rule to limit lead emissions from aviation gasoline (avgas) combustion. Avgas is the last remaining fuel in the United States containing tetra-ethyl lead.

QUALITY CLAUSES

E1 Contractor Inspection System

Requires Quality Control Plan/Inspection System Covers Operations Specific To Product Provides Minimum Sampling and Testing Requirements, Sample Retention, and Definition of Test Series (Tables I, II, & III)

Records To Be Maintained

E4 Inspection & Acceptance

Used only for contracts involving Barge or Tankers Oversight Performed By QAR KTR to Advise QAR Of Requested Inspection Date Provides Contract Specific Information Acceptance As Noted, Either FOB Origin Or Destination List Of Assigned Inspection Office To Be Provided KTR

ASTM API

E5 Inspection & Supplies

This is a generic clause and is required by FAR 52.246-2 Contractor Responsible For Quality To FOB Point Government Has The Right To Inspect And Test Supplies Called For In the Contract Government Failure To Inspect And Accept Or Reject The Supplies Shall Not Relieve The Contractor From Responsibility, Nor Impose Liability On The Government For Non-Conforming Supplies The Contractor Shall Provide And Maintain An Inspection System Acceptable To The Government Covering Supplies Under This Contract

E12 Point of Acceptance

Specifies where acceptance of supplies will occur, either at FOB Origin or FOB Destination locations.

E18.01 Inspection System

Records on product supplied to the U.S. Government shall be complete and available to the Government during the performance of this contract.

The Government reserves the right to perform Quality Inspection at all times and places.

Federal Acquisition regulation (FAR) requires that such records be maintained for a period of 4 years if this contract contains any of the following clauses: AUDIT, SEAL BIDDING, AUDIT

NEGOTIATION, EXAMINATION OF RECORDS BY THE

COMPTROLLER GENERAL.

The contractor shall furnish samples of each product at the request of and in the manner and the place designated by the Quality Representative.

E35 Non-conforming Supplies & Services

Product Found Off-Spec Before Delivery KTR feels Product Is Useable KTR requests Deviation/Waiver from Contracting Officer Contracting Officer contacts DESC BQ/BP for guidance DESC Determines Whether Product Is Acceptable Equitable Price Adjustment (EPA) Negotiated

• Product Found Off-Spec After Delivery

Found By Government Testing DESC Initiates Claim

• Minimum $250.00 Processing Fee Plus EPA

E37: Source Restriction & Source Inspection

Source Restriction:

• Contracting Officer May Require After A 10 Day Written

Notice The KTR Designate A Single Source Of Supply

• KTR Must Provide The Address Of The Terminal Or

Loading Point To Be Used

• KTR May Change Suppliers After Written Approval of

The Contracting Officer Source Inspection:

• If Serious Quality Problems Arise The CO Has The Right

Change The Inspection Point From Destination To Origin

• Clauses Relating To Origin Shall Be Incorporated

• Source Restriction Will Be Mandatory For All Items

E40 Material Inspection & Receiving Report

DD Form 250: Required For All Truck, Tank Wagon, Pipeline DD Form 250-1: Required For All Barge And Tanker Items (Marine Shipments)

INFORMATION CONTACTS

ASTM INTERNATIONAL

100 BARR HARBOR DRIVE

WEST CONSHOHOCKEN, PA 19428-2959

Phone: (610) 832-9585 Fax: (610) 832-9555 www.astm.org

DESC QUALITY CONTACTS

DESC Quality Operations Division

DESC-QA - Points of Contact

Dana L. Davidson: PC&S/BUNKERS

• Phone (703) 767-8381

• E-mail: Dana.Davidson@dla.mil

Chuck Allyson: COAL/alt PC&S/BUNKERS

• Phone (703) 767-8744

• E-mail: Charles.Allyson@dla.mil

Robert Koeller: Chief Quality Operations

• Phone (703) 767-8736

• E-mail: Robert.Koeller@dla.mil http://www.desc.dla.mil http://www.desc.dla.mil/

DESC QUALITY POC

DESC Quality Operations Division

DESC-QT Points of Contact

Ray Ortiz: Chemist/Acquisition Support

• Phone (703) 767-8357

• E-mail Raymond.Ortiz@dla.mil

Yan Guo: Chemist/Acquisition Support

• Phone (703) 767-8355

• E-mail Yan.Guo@dla.mil

Patricia Wilkins: Chief Product Technology

• Phone (703) 767-8360

• E-mail Patricia.Wilkins@dla.mil http://www.desc.dla.mil

QUESTIONS

OFFEROR SUBMISSION PACKAGE

(OSP)

DEFENSE ENERGY SUPPORT CENTER (DESC)

PRE-PROPOSAL CONFERENCE

CUSTOMER ORGANIZED GROUP (COG) 4

SOLICITATION NUMBER SP0600-10-R-0214

Presented By:

Regina Gable

Contract Specialist

COG 4 States

Contract for three (3)-years combined total requirement of 119,120,000 USG (est.)

Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri, North Carolina and South Carolina

OFFEROR SUBMISSION PACKAGE

(OSP) OVERVIEW

What is the Offeror Submission Package (OSP)?

• The OSP is issued with the solicitation. It contains various fill-in clauses and includes the following attachments:

- Price Data Sheet

- Price Data Sheet for the Evaluation Preference

- Price Data Sheet for Proposed Escalator in accordance with Clause M3.01

• Offerors must complete Blocks 12, 17(a) and 30(a),(b), and (c) of the SF-1449.

CLAUSE C16.69

FUEL SPECIFICATIONS

This clause provides general information about the various fuel products offered under the solicitation

*Other relevant specification clauses include:

• C16.14 – Fuel, Ethanol

• C16.15 – Gasoline, Aviation

• C16.18 – Gasoline, Automotive

• C16.27 – Biodiesel

Clause F3 Transport Truck and/or Truck and Trailer

Free Time and Detention Rates

• For Tank Truck (TT) and Tank Truck/Trailer (TTR) deliveries only: if the contractor is delayed by the activity in excess of one (1) hour, detention rates may apply.

• DESC is NOT liable for detention fees. Detention costs are NOT included in the overall total dollar contract value.

F3.03 Notification of Change in Transportation Company

• All offerors are required to certify that they will not use transportation companies that have been debarred, suspended or are otherwise ineligible for receipt of Government contracts.

• After award the offeror agrees to provide DESC with information on any new transportation company being used to deliver fuel under the contract.

Clause G9.06 Address to which Remittance should be Mailed

• Contractor payments are made using electronic funds transfer (EFT). If unusual circumstances require an exception to EFT payments may be mailed directly to the contractor.

• All offerors must provide a complete mailing address (including the 9-digit zip code) as specified in the clause.

Clause G9.07 Electronic Transfer of Funds Payments – Corporate Trade

Exchange

• All offerors must provide their financial information when submitting their initial offers.

• Bank Name, City, State, 9-digit ABA identifier or “Routing” Number, Type of Account and Account number are required.

• Include the Name, Title, Telephone Number AND Signature of the Designated Official authorized to submit EFT transactions on behalf of your company.

Clause G30 Post-Award Small Business Program Representation

• If the Offeror represented that their company is a small-business concern prior to contract award, the offeror is required to re-represent their small business status after award as follows:

• Within 30 days after the execution of a novation agreement.

• Within 30 days after any merger or acquisition.

Clause K1.01-10 Offeror Representations and Certifications –

Commercial Items

*FYI: About 95% of the issues requiring resolution with offerors during negotiations are directly related to completion of Clause K1.01-10.

- Clause K1.01-10 must be completed by all offerors.

Representations and Certifications –

Commercial Items (cont’d)

• Clause K1.01-10 includes fill-in items for the offeror provide certain information to DESC relating to their business type, size and classification.

• Income/Revenue does not influence whether a company is considered to be a large or small business.

Representations and Certifications –

Commercial Items (cont’d)

• DESC requires that all offerors complete:

• Item 3- Tax-Payer ID Number (TIN)

• Item 4- Type of Organization

• Item 5- Common Parent

Representations and Certifications –

Commercial Items (cont’d)

• All offerors must indicate whether their organization is classified as a small business (SB), veteran owned small business (VSB), service disabled veteran small business (SDVSB), small disadvantaged business (SDB), woman-owned small business (WOSB), or woman owned business concern [other than small business concern]

(WOB).

• Remember: If the total number of employees is less than 500 – the company is considered to be a small business.

Representations and Certifications –

Commercial Items (cont’d)

*FYI: If a company is reporting itself as a small-disadvantaged business (SDB) the company must indicate whether or not they have been certified by the Small Business Administration as an SDB, or if they have completed an application to the SBA to be registered as such.

Representations and Certifications –

Commercial Items (cont’d)

• Item 11(d) (1) (i) (ii)- Executive Order 11246 prohibits federal contractors and federally-assisted construction contractors and subcontractors, who engage in over $10,000 in Government business in 1 year from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin.

Government contractors are required insure that equal opportunity is provided in all aspects of their employment.

• All offerors must state whether or not they have participated in a Government contract valued at greater than $10,000 AND if so, whether or not the required compliance reports were filed.

Representations and Certifications –

Commercial Items (cont’d)

• Item 11 (d) (2) (i) (ii)- states that companies with 50 or more employees and government contracts of $50,000 or more are required, under Executive Order 11246 to develop and implement a written affirmative action program (AAP) for each establishment.

• All offerors must indicate whether they developed and maintain an AAP plan on-site.

Representations and Certifications –

Commercial Items (cont’d)

• Item 11 (h) - All offerors must certify if they (or their principals) presently OR within a 3-year period have been debarred, suspended, proposed for debarment, or declared ineligible for the award of contracts by an federal agency OR if they have been convicted of fraud, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receiving stolen property.

Representations and Certifications –

Commercial Items (cont’d)

• Item 11 (h) cont’d. - Offerors must certify whether they or their principals are currently under indictment or within the past 3 years have been convicted of fraud, violation of Federal or state antitrust statutes, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating Federal criminal tax laws, or receiving stolen property.

• All offerors must certify whether in a 3-year period they have been notified of any delinquent Federal taxes greater than $3,000 if the taxes are still owed.

Clause K33.01 Authorized Negotiators

• All offerors must submit the name(s), title(s), phone number(s) and e-mail address(es) for any person(s) authorized to negotiate with the Government on its behalf.

• Negotiation between DESC and the offeror will be conducted only with the authorized negotiators specified or with the person whose signature appears on the SF 1449.

Clause K85 Disclosure of Ownership or Control by the Government of a Terrorist

Country

• Contract award is prohibited to companies whose beneficial ownership (greater than 5%) is held by a terrorist country (i.e. Cuba, Iran, Sudan or Syria).

• ALL offerors under ALL solicitations must certify in their OSP that none of the prohibitions in the referenced clause are applicable.

Clause L117 Notification of Transport Company to be Utilized in the Delivery of

Product

• All offerors must indicate whether or not they are subcontracting with a transportation company in the event of contract a award.

• If No, the box (referenced in the clause) should be checked.

• If an offeror is subcontracting transportation, the following transporter company information MUST be included in the OSP:

• Name(s)

• Address(es)

• Telephone Number(s)

• States Authorized to Operate

Price Data Sheet

• All pricing information should be entered on the Price Data Sheets (Attachments A, B, and C) as indicated.

• Additional Price Data Sheets may be duplicated as needed or an MSExel spreadsheet will be accepted (must contain the same required information as the Price Data Sheet).

• All offer price(s) MUST include all applicable state and local taxes and fees INCLUDING the Federal Leaking Underground Storage Tank (L.U.S.T.) Tax and Oil Spill Liability Trust Fund (OSLTF) Fee. See the current U.S. Tax Compilation (DESC website) for applicable taxes and fees.

• All included taxes and fees and amounts MUST be specified.

• Reminder: Federal Excise tax still invoiced as a separate line item.

Price Data Sheet For Proposed Escalator

• Attachment C included in the OSP.

• Offerors must include the following:

• Line item Number

• DESC established Escalator Reference

• Contractor Proposed Escalator Reference

• Rationale for proposed reference escalator

• Proposed reference escalators will be evaluated by DESC to insure that they accurately reflect local market conditions.

• If the proposed escalator is from a publication unfamiliar to DESC, the offeror is required to provide a 12-month history of the escalator proposed (See Clause M3.01).

We are looking forward to doing business with you.

Taxes

Georgia Dotson, Contracting Officer

I28.01

FEDERAL STATE AND LOCAL TAXES

• The contractor shall notify the Contracting Officer of all matters relating to any tax that reasonably may be expected to increase or decrease the contract price

• The Government shall furnish (without liability) the evidence appropriate to establish exemption from any Federal, State, or local tax when the contractor requests such evidence

I28.02-2

FEDERAL, STATE, AND LOCAL TAXES AND FEES

• Unless an exemption applies, all contract prices are presumed to include all states taxes (such as NORA, gross receipts and excise tax), local taxes/fees, and surcharges.

• Contractors invoice shall list all state & local taxes/fees, and surcharges, as well as the applicable rate at the time of invoicing

• DESC provides a listing of such fees on their website for reference only. As this link may not be updated as regularly as the local taxing authority processed rate changes, the contractor is responsible for providing the most updated rate/fee applicable at the time of invoicing

I28.03-2

TAX EXEMPT CERTIFICATES

• The Ordering Officer will issue the tax exempt certificates for FET where applicable

• Tax exempt certificates will not be issued for Army National Guard and Air National Guard activities. DFAS will pay the FET and apply to the IRS for the refund

• All military activities, including the National Guard will issue tax exempt certificates for state and local taxes and fees, where applicable.

Contractors shall forward requests for tax exempt certificates to the appropriate Ordering Officer

The DESC Tax Compilation

• The DESC Tax Compilation is a good resource to begin assembling tax information for your offer.

• Go to www.desc.dla.mil

• On the Vendor Resources drop down menu, click on Solicitations.

• Click on State Fuel Tax Compilation.

• Click on Taxes.

• Finally, click on the most recent version of the compilation listed.

Verifying Tax Information

• Best Practices – Do not take any chances! Verify for yourself whether a particular tax / fee / surcharge is applicable. The easiest way to do this is to call that state’s Department of Revenue / Taxation. You can also consult with your own legal / tax professional, as well. Remember, you cannot rely on the DESC Tax Compilation. It is an information resource only, so verify the accuracy of its contents for yourself.

• Verify with the state Department of Revenue / Taxation the information you found on the DESC tax compilation. If the state tells you something different / additional / etc. from what is listed on the DESC tax compilation, follow up with DESC (Contract Specialist) until you are getting the same information from both sources.

• Remember, if you fail to include a properly payable existing tax in your offer and are awarded a contract, that tax will NOT be added after the fact!

Bid Integrity

Georgia Dotson, Contracting Officer

What is Antitrust?

Any agreement or mutual understanding among competing firms that restrains the natural operation of market forces.

The Sherman Act (15 U.S.C. §1)

• “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.”

• Prohibits agreements among competitors in restraint of trade or commerce

• Price fixing, market allocation and bid rigging are all criminal violations

Elements of an Offense

• Concerted action in the restraint of trade

– i.e., an agreement among competitors

• Between two or more independent entities

• Affecting interstate or foreign commerce

Bid Rigging

• Agreement in advance to manipulate outcome of bidding process

• Types:

– Bid Suppression

– Complementary Bidding

– Bid Rotation

What do you think the penalties are for Sherman Act violations?

It's risky, of course---if we're caught, it could mean many hours of community service.

Antitrust Criminal Penalty Enhancement Act of 2004

• Increased maximum criminal penalties for violations of the Sherman Act:

– Individuals- 3 years incarceration and/or $350,000 to 10 years and/or $1,000,000;

– Corporations- maximum fines from $10 Million to $100

Million

• Alternative fine provisions of 18 U.S.C. § 3571 permit a fine of twice the gross financial loss or gain resulting from the violation where this number would exceed $100 Million.

• Statute of Limitations: 5 years from the last act in furtherance of the conspiracy

Criminal Penalties Obtained

• Largest Single Fine -- $500 Million

• Largest Single Case -- $1.1 Billion

• Recent jail sentences – 4-5 years (on average)

Companion Violations

• Bribery/Gratuities (18 U.S.C § 201)

• False & Fictitious Claims (18 U.S.C. § 287)

• Conspiracy to Defraud U.S. (18 U.S.C. § 371)

• False Statements (18 U.S.C. § 1001)

• Mail/Wire Fraud (18 U.S.C. §§ 1341, 1343)

• Obstruction of Justice (18 U.S.C. § 1519)

Gratuities (FAR 3.2)

• In addition to civil/criminal penalties, contract can also be terminated for offering or giving a gratuity intended to obtain a contract or favorable treatment under a contract.

• What kinds of things are gratuities? Gifts, entertainment, food, etc.

• Also allows the same remedies as a breach, plus exemplary damages of 3 to 10 times the contractor’s cost in giving the gratuity.

Buying-in (FAR 3.5)

• Buying-in means submitting an offer below anticipated costs, expecting to increase the contract amount after award or to receive follow-on contracts at artificially high prices to recover losses incurred on the buy-in contract.

Wrap Up/Questions

Thank you for attending. We are looking forward to doing business with you.

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