DLA_Energy_P-7.pdf

DDEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD, SUITE 4950

FORT BELVOIR, VIRGINIA 22060-6222

DLA Energy P-7 July 10, 2012

ACCOUNTABILITY AND CUSTODIAL RESPONSIBILITIES FOR DEFENSE WORKING

CAPITAL FUND (DWCF) INVENTORY AND GOVERNMENT PROPERTY

1. GENERAL. Defense Logistics Agency Energy (DLA Energy) is the DoD Integrated Material Manager (IMM) and DoD Executive Agent (EA) for Defense Working Capital Fund (DWCF) owned Class III Bulk Petroleum products. This policy implementation guidance provides accountability and custodial responsibilities for Defense Working Capital Fund (DWCF) inventory and Government furnished equipment. It is applicable to all DLA Energy capitalized Government Owned/Government Operated (GOGO), Government Owned/Contract Operated (GOCO), and Contract Owned/Contract Operated (COCO) Defense Fuel Support Points (DFSPs). This document was coordinated with the applicable Military Service Control Points (SCP) and is approved by DLA Energy.

1.1. Exemption. DWCF energy inventories managed under terms of North Atlantic Treaty Organization (NATO), international agreement, transportation operating agreement (TOA), or commercial tender agreement are exempt from requirement to appoint a Responsible Officer (RO) or Property Administrator (PA). Physical custody and accountability for DWCF energy inventory held within these pipeline and storage systems is in accordance with terms of the respective agreements. Contact DLA Energy-BGI, International Agreements Division for information regarding NATO or other international agreements by email at desc.internationagreements@dla.mil. The responsible DLA Energy Region office shall provide oversight of these DFSPs by routine and scheduled surveillance visits. As a minimum, the Region shall conduct and record surveillance visits annually and shall perform more frequent surveillance/follow-on visits as required based on known vulnerability factors and/or risk assessment noted during previous site visits. The DLA Energy Region office shall record and report deficiencies observed during visits to the appropriate facility Terminal Manager (TM), DLA Energy DFSP Management Office (DLA Energy-N), and DLA Energy business offices to ensure appropriate corrective action.

1.1.1. Supersession. This administrative change updates and supersedes DLA Energy-P-7 dated December 20, 2011. The identification of the mandatory contract clauses is changed. This update identifies the single registration site for RO, TM, and PA courses. Guidance added for the out of tolerance process to RO and TM responsibilities. Changed paragraphs are marked with a bold line at the right margin.

1.2. Mandatory Contract Clauses. Incorporate the following mandatory DLA Energy contract provisions and Regulatory Contract Clauses into Military Service Contracts at locations that store and/or distribute DWCF energy products. Clauses and contract provisions are tailored for

DLA Energy P-7 July 10, 2012 the type of storage service provided, whether COCO or GOCO, and are designated as such in the list. Obtain current copies of the listed contract provisions by calling (703) 767-8505 and requesting the Procurement Planning and Policy Branch (CPA). Obtain Regulatory Contract Clauses, such as the FAR, DFARS, and DLAD at the Hill Air Force base web page http://farsite.hill.af.mil/vffar.htm.

1.2.1. Custody of Petroleum Product (I121) (GOCO)

1.2.2. General Receiving and Storing Conditions (DLAD Clause 52.211-9072) (COCO)

1.2.3. General Shipping Conditions (F1.05) (COCO)

1.2.4. Determination of Quantity (Storage) (F1.14) (COCO)

1.2.5. Government Property (FAR Clause 52.245-2) (COCO)

1.2.6. Responsibility for Government-Owned Petroleum Products ( I116) (COCO) & (GOCO)

1.2.7. Protection of Government Buildings, Equipment, and Vegetation (FAR Clause 52.237-2)

(GOCO)

1.2.8. Inventory Control Records and Systems of Record (I119.04) (COCO & (GOCO)

1.2.9. Inventory Control Records and Systems of Record (GOCO) (Air Force) (119.05) (GOCO)

1.2.10. Liability for Fuel Spills (I116.01) (GOCO)

1.2.11. Environmental Protection (Storage) (I180.02) (COCO) & (GOCO)

1.2.12. Protection of Government Property and Spill Prevention (I186) (GOCO)

1.2.13. Removal of Water Bottoms (C19.04) (COCO)

1.2.14. Sampling and Testing Of Petroleum Products (C19.07) (COCO)

1.2.15. Designation of the Defense Fuel Region (G22) (COCO) & (GOCO)

1.2.16. Quality Control Plan (E1.11) (COCO) & (GOCO)

1.2.17. Test for Sulfides in Water (E34) (COCO)

1.2.18. Quality Representative (E22.01) (GOCO) & (COCO)

1.2.19. Contract Turnover Inspection (E29.01) (GOCO)

1.3. The following clauses are mandatory for DFSPs that additize fuel.

1.3.1. Operation of Conductivity Additive System (F45.01) (COCO)

1.3.2. Operation of Fuel System Icing Inhibitor Additive System (F45.03) (COCO)

1.3.3. Operation of Corrosion Inhibitor Additive System (F45.04) (COCO)

1.4. Establishment of a Host Tennant Support Agreement in compliance with DoDI 4000.19 Interservice and IntraGovernmental Support may satisfy the requirement identified in C19.01., Security and Fire Protection. Additionally, unique situations such as the intended “end-use” of petroleum products, operating environment, and so forth may require modification of contract provisions listed below. Submit proposed contract provisions or clause modifications to the applicable Military SCP for staffing. The SCP shall coordinate and obtain approval from the applicable Combatant Command Joint Petroleum Office, DLA Energy-BQ and DLA Energy Contract Policy prior to modifying the contract provisions referenced below and publication of a solicitation.

1.4.1. Test for Sulfides in Water (E34)

1.4.2. Removal of Water Bottoms (C19.04)

1.4.3. Sampling and Testing Of Petroleum Products (C19.07)

1.4.4. Quality Control Plan (E1.11)

2. DEFINITIONS

2.1. Accountable Officer (AO): DLA Energy-N is responsible for accountability and management oversight for all DWCF Class III (Bulk Petroleum) inventory locations. The DLA Energy-N Division Chief, therefore, serves as Accountable Officer for worldwide DWCF Class III inventories.

2.2. Property Administrator (PA): In accordance with FAR 45.101, a PA is an authorized representative or the Contracting Officer who is duly appointed in accordance with agency procedures, and who is responsible to administer contract requirements and obligations relating to Government property in the possession of the Contractor. A PA also evaluates and advises contracting activities and DoD officials regarding contractor efficiency in management of Government property. The PA serves as a member of the contract administration team which is comprised of other functional elements such as Quality Assurance Representatives (QARs), Inventory Managers, Transportation/Facilities Specialists, and so forth who should be consulted regarding technical aspects of contract performance that fall outside of the PA’s area of expertise. Additional information concerning specific PA roles and responsibilities is provided in DoD 4161.2-M, DoD Manual for the Performance of Contract Administration; Federal Acquisition Regulation (FAR) Subpart 45.5 - Management of Government Property in the Possession of Contractors; and Department of Defense Federal Acquisition Regulation Supplement (DFARS) Subpart 245 - Government Property.

2.3. Responsible Officer (RO): An RO is a U.S. citizen and Government employee, either military or civilian, duly appointed by proper authority to accept property on behalf of the US Government, provide diligent care, custody, and protection of Government property. See DoD 7000.14-R, DoD Financial Management Regulation, Volume 12, Chapter 7 - Financial Liability for Government Property Lost, Damaged or Destroyed for discussion of specific accountability responsibilities and penalties. The RO is generally a US citizen but in some circumstances a local national may also be assigned as RO, IAW B-305919 Department of Defense Accountable Officials-Local Nationals Abroad.

2.4. Terminal Manager (TM): Terminal Managers identified by terms of the contract are contractually obligated to account diligently for and safeguard Government property including DWCF energy stocks and Government furnished equipment/facilities at contractor operated DFSPs. Terminal Managers are additionally responsible to comply with contract terms and DLA Energy published guidance. Detailed information regarding TM roles and responsibilities may be reviewed at DoD 4140.1-R, DoD Supply Chain Material Management Regulation and DoD 4161.2-M, DoD Manual for the Performance of Contract Property Administration. The Contracting Officer shall provide DLA Energy-NI a memorandum identifying the Terminal Manager and applicable TM contact information. New memorandums shall be required when the TM is no longer able to perform duty due to job transfer, permanent move, or employment termination. A master database of all contracted Terminal Managers shall be compiled and maintained by DLA Energy-NI to include the TM telephone number, FAX, e-mail address, and the managing Contracting Officer telephone number, FAX, and e-mail address.

3. RESPONSIBLE OFFICER OR PROPERTY ADMINISTRATOR APPOINTMENT

3.1. The responsible organization commander shall appoint an RO. RO appointments shall be in writing and shall reflect both an appointment commencement date and a termination date not to exceed two years from the effective commencement date. The responsible organization commander shall renew or appoint a new RO in writing prior to the termination date to avoid lapse in accountability oversight. IAW SUBPART 245.70 The head of a contracting activity for the Defense Logistics Agency, or the head of the contract administration office for other departments and agencies shall select, appoint, or terminate (in writing) property administrators and plant clearance officers. The Director of DLA Energy shall appoint PAs for DLA Energy at all GOCO and COCO DFSPs as reflected in Table 1 where DWCF energy products are stored/distributed and are contracted by DLA Energy. PA appointments are made for the life of a contract; however, new PA appointments shall be required if the incumbent PA is no longer able to perform duty due to job transfer, permanent move, or employment termination.

TABLE 1. RESPONSIBLE OFFICER, PROPERTY ADMINISTRATOR APPOINTMENT,

TERMINAL MANAGER REQUIREMENTS

DFSP/Facility Type RO Required PA and TM Required

COR

Required

All GOGO DFSPs X GOCO, DLA Energy Contracted/Managed X X

GOCO, Contracted by Military Service with Military Managed Team at DFSP X

X

GOCO, Contracted by Military Service with DFSP Contractor Managed Team at DFSP

X X

All COCO DFSPs X X

3.1.1. ROs shall be Government employees with minimum grade of GS-9, or the equivalent, E- 7, or W-1/O-1 (warrant/commissioned officer). Contract support personnel may not serve as responsible officers. The RO incumbent shall be a senior qualified person assigned within the respective DFSP organization and shall possess a minimum of six months prior energy management experience at the DFSP level. The RO minimum grade and/or experience level at small DFSP accounts may be waived upon written request to DLA Energy-NI (Inventory Division) when the requirement cannot be satisfied by an otherwise qualified person. The waiver request shall be IAW DLA Energy P-18, Requests for Waiver and/or Exception to DoDM

4140.25 and DLA Energy Interim Policy Implementation and Procedural Guidance, signed by the appointing officer and shall provide details of circumstances requiring the waiver as well as local management controls in place to ensure proper oversight of the DWCF account.

3.1.1.1. Responsible Officer Appointment. The responsible organization commander shall submit RO appointments to the applicable DLA Energy Region office in the prescribed Responsible Officer Appointment Letter format at Appendix 1.1. Upon submission of the written appointment letter, the RO appointee shall acknowledge acceptance of accountability responsibility and assumption of related pecuniary liability by endorsement as reflected at Appendix 1.1. DLA Energy-NI shall compile and maintain a master database of all appointed Responsible Officers to include the RO telephone number, FAX, e-mail address.

3.1.2. Property Administrator Appointment for DLA Energy Managed Contracts. The responsible organization commander for military service funded contracts or appropriate DLA Energy Region Commander shall submit the PA recommendation letter to the appropriate DLA Energy contracting office (DLA Energy-BX/BY) for review. The Contracting Office will forward the PA Recommendation Letter to the DLA Energy Director for signature. Refer to the prescribed Property Administrator Recommendation Letter format at Appendix 1.2. Upon official appointment by DLA Energy, the PA appointee shall acknowledge acceptance of accountability responsibility and assumption of related pecuniary liability by endorsement. DLA Energy-BX/BY will provide a copy of the approved recommendation letter to DLA Energy-NI.

DLA Energy-NI shall compile and maintain a master database of all appointed PAs to include the PA telephone number, FAX, e-mail address.

3.1.3. Property Administrator Appointment for Military Managed Contracts. The responsible organization commander shall appoint a PA to provide oversight and ensure compliance with contract terms and safekeeping of Government property, and shall FAX a completed copy of the PA appointment letter to DLA Energy-NI at 703-767-9380. The responsible organization or contractor shall appoint a quality surveillance representative (QSR) or quality assurance evaluator (QAE) who satisfies the minimum energy management qualifications identified above to conduct routine and recurring surveillance inspections when the assigned PA is responsible to oversee multi-functional disciplines, as is generally the case for Base Operations Support (BOS) contracts. The QSR/QAE shall record and route internal surveillance inspections in accordance with pertinent military service guidance. As a minimum, the QSR/QAE shall incorporate the self-inspection checklist and task checklist provided at Appendices 2 and 3 into the surveillance inspections. The contractor management team shall comply with contract terms and all applicable DLA Energy and military service guidance.

3.1.4. Delegation of RO Authority. The RO shall nominate an alternate RO who will be appointed in writing by the organization commander. The alternate RO will serve during occasions when the RO is temporarily absent from the duty location for more than five consecutive work days (vacation, temporary duty, etc) but less than two consecutive accounting months. When the expected absence exceeds two accounting months a transfer of account is required IAW para 3.1.6. The Alternate RO shall be a senior qualified Government employee who meets the requirement in paragraphs 3.1.1. and 4. The delegation of authority letter shall be signed and dated prior to any RO absence and shall be retained in the DFSP document control file for three years – the current fiscal year plus two previous fiscal years. A copy of RO delegation letters shall be made available to DLA Energy upon request.

3.1.5. Terminal Manager Signatory Authority. The Terminal Manager at a contracted DFSP may delegate signatory authority in accordance with DLA Energy contract provision I119.04.

The Terminal Manager at an AF contracted GOCO DFSP may delegate signatory authority in accordance with contract provision I119.05.

3.1.6. Physical Custody/Account Transfer. The outgoing RO and the incoming RO shall jointly verify the DFSP physical inventories at time of account transfer and shall record inventories on DD Form 2920, DoD MILSPETS DFSP Transfer of Account Document. The Transfer of Responsible Officer Checklist at Appendix 4 may be used for assistance. The incoming and outgoing Terminal Managers at GOCO/COCO DFSP locations shall jointly verify physical inventories with the Property Administrator during custody transfer at contracted DFSP locations. Respective outgoing and incoming personnel shall obtain inventory gauge readings by either manual gauge of all storage tanks or from calibrated/operational ATG readouts, or combination thereof. Physical inventory summary reports from active/operational ATG systems may serve as source documents for physical inventory gauge readings and fuel/water quantity conversions. When approved ATG physical inventory summary reports are used, enter the net

Total Net Quantity from Other Pages of the DD Form 2920 and attach the ATG summary report to the DD Form 2920 for document retention.

3.1.6.1. To facilitate the DFSP energy account transfer process, the RO/PA shall provide DLA Energy-N and applicable DLA Energy Regional office a minimum two week advance written notice of a pending RO/PA departure date due to tender of resignation, transfer, PCS, or TDY/TAC. The written notification may be sent via email, fax, or mailed and a copy maintained with the RO/PA appointment letter.

3.1.6.2. The DFSP energy account shall be transferred from the outgoing RO to a suitable interim RO appointee who satisfies qualification requirements of paragraph 3.1.1. in the event the outgoing RO is unable to formally transfer the account to the incoming RO. The interim RO may then transfer the account upon arrival of the incoming and permanent RO. Cautionary Note:

With exception of brief time periods previously discussed at paragraph 3.1.4, RO responsibilities for DFSP energy account management shall in no instance be delegated to another individual.

3.1.7. The responsible organization or contractor shall retain and distribute completed RO/PA Appointment Letters and Completed DD Forms 2920 as follows:

3.1.7.1. Maintain original copy of the RO/PA Appointment letter and DD Forms 2920 in the DFSP document control file for the current fiscal year plus two additional years following RO/PA appointment renewal or account transfer to a new RO/PA. Maintain copy of the RO/PA appointment letter, DD Forms 2920 and inventory transfer supporting documents in the RO/PA office administrative files for the full term of the RO/PA appointment at DFSP locations geographically located apart from the RO/PA office. The Contracting Officer shall maintain a copy of the PA appointment letter in the contract file.

3.1.7.2. Forward copy of the RO Appointment Letter and DD Form 2920 to the applicable DLA Energy-Region office.

3.1.7.3. For military-managed contracts forward copy of PA Appointment Letter and DD Form 2920 to the applicable DLA Energy-Region office.

3.1.7.4. For DLA Energy managed contracts forward a copy of the PA Appointment nomination letter to the DLA Energy contracting office (DLA Energy-BX/BY). DLA Energy BX/BY will forward the appointment letter for DLA Energy Director signature. DLA Energy-BX/BY will provide a copy of the approved appointment letter to DLA Energy-N.

4. RESPONSIBLE OFFICER / PROPERTY ADMINISTRATOR TRAINING/TERMINAL

MANAGER TRAINING. Responsible Officers shall complete Fuels Manager/Officer courses available and provided by applicable military service schools. Property Administrators at DLA Energy contracted DFSPs shall complete applicable DLA Energy sponsored energy management courses.

4.1. DLA Energy mandatory computer based training (CBT) for RO/TM/PA is available on the DLA Energy webpage on the Defense Knowledge Online (DKO) website. The RO/TM/PA training program targets current and prospective personnel serving as a Responsible Officer, Terminal Manager, or Property Administrator. Additional CBT modules relating to other programs are found on this site.

4.2. Upon completion of the RO CBT and within 90 days of appointment, the RO/TM/PA shall attend the one week Terminal Managers and Responsible Officers Course which is taught at contractor facilities and in the field. This training targets and prepares Terminal Managers, Property Administrators and Responsible Officers to successfully perform their duties. DLA Energy shall fund the cost to attend the course. Course admission, must be done through the online DLA Base Level Training Registration page at http://www2.dla.mil/Registration/Registration.aspx, for additional information please contact the appropriate Service Control Point or MAJCOM for the Air Force. For DLA Energy managed GOCOs contact DLA Energy-BX/BY.

4.3. Deployments to Tactical Operating Locations: Responsible Officers, Property Administrators, or Terminal managers deploying to tactical operating locations shall complete the minimum experience and training requirements in accordance with paragraphs 3.1.1. and 4.2.

before deploying.

5. RESPONSIBLE OFFICER/TERMINAL MANAGER RESPONSIBILITIES

5.1. The Responsible Officer or Terminal Manager for contractor managed DFSPs, shall be responsible for management of the DWCF energy account until properly relieved of responsibilities.

5.2. Responsible Officers shall collaborate on stock position planning and participate in the DLA Energy Inventory Management Plan (IMP) process to ensure effective positioning of War Reserve Material (WRM) and Peacetime Operating Stocks (POS).

5.3. Responsible Officers shall submit POS requirements as required and/or at the minimum interval prescribed in DESCI 4220.1, Requirements Submission Schedules for Energy

Commodities and Related Services and DoD 4140.25M, Volume II, Bulk Petroleum Management, Chapter I – Requirements for Petroleum Products and Chapter 11 – Management of Peacetime Operating Stocks (POS) and Bulk Petroleum War Reserve Stock (PWRMS) Levels.

5.4. Responsible Officers and Terminal Managers shall safeguard DWCF energy inventory and shall establish and maintain inventory in compliance with governing petroleum inventory accounting procedures.

5.5. Responsible Officers and Terminal Managers shall ensure DWCF energy transactions are processed into the Business System Modernization – Energy (BSM-E) in the manner prescribed by DoD 4140.25-M, Base Level Support Application (BLSA) guidance, and all pertinent DLA Energy Interim Policies and Instructions. This requirement further extends to DLA Energy Inventory Managers and other authorized personnel who process energy transactions into BSM- E on behalf of contract DFSPs, NATO/ International Agreement DFSPs, and TOA DFSPs.

5.6. Responsible Officers and Terminal Managers shall establish and maintain a complete audit trail for all DWCF energy transaction histories in compliance with DLA Energy document retention policy. The transaction history shall be comprised of the information management system transaction record and the supporting source document/source data that prompted the transaction.

5.7. Responsible Officers and Terminal Managers shall conduct quality surveillance of DWCF petroleum products in compliance to DoD 4140.25M, DoD Management of Bulk Petroleum Products, Natural Gas and Coal, Volume II, Chapter 7 – Quality Surveillance; MIL-STD-3004, Quality Surveillance for Fuels, Lubricants and Related Products; and all pertinent military service quality surveillance directives.

5.8. Responsible Officers and Terminal Managers shall issue/distribute all DWCF petroleum products on a first-in/first-out (FIFO) product rotation schedule.

5.9. Responsible Officers and Terminal Managers shall ensure DFSP compliance with Federal, State and Host Nation environmental laws, as well as with DoD environmental Directives, Instructions, Regulations and Manuals. DoD 4140.25M, Volume II, Bulk Petroleum Management, Chapter 8 - Management of Storage and Distribution Facilities, provides detailed environmental compliance information.

5.10. Responsible Officers and Terminal Managers shall ensure DFSP compliance with Federal, DoD and Military Service safety directives and regulations.

5.11. Responsible Officers and Terminal Managers shall operate and maintain Government Furnished Equipment (GFE), DLA Energy/Military Service provided equipment, and DWCF petroleum storage and distribution facilities/equipment in a manner to satisfy prescribed Federal, DoD, Military Service and manufacturer directives and guidelines. Additional facilities maintenance program guidance may be reviewed in DoD 4140.25M, Volume II, Bulk Petroleum Management, Chapter 8 - Management of Storage and Distribution Facilities.

5.12. Responsible Officers and Terminal Managers shall ensure required inspection, proper maintenance and calibration of ATG systems.

5.12.1. ATG systems shall be inspected, maintained and calibrated in accordance with API Manual of Petroleum Measurement Standards, Chapter 3 - Tank Gauging Section 1B - Standard Practice for Level Measurement of Liquid Hydrocarbons in Stationary Tanks by Automatic Tank Gauging.

5.12.1.1. The DLA Installation Support for Energy Engineering office is responsible for managing the ATG calibration and maintenance program. DLA Energy will fund for maintenance and calibration of ATG systems installed on tanks storing DWCF owned fuel.

5.12.1.2. ATGs used in custody transfer service shall be inspected and their accuracy verified at a single level at least once per month. If the variation exceeds 4mm (3/16 inch) investigate the cause.

5.12.1.3. ATGs used in inventory control service shall be inspected and its accuracy verified at a single level at least once per quarter. If operating experience confirms stable performance within the verification tolerance for two consecutive quarters (6 Months), the verification schedule can be extended to once a year. If the variation exceeds 4mm (3/16 inch) investigate the cause.

5.12.2. In the absence of a functional ATG, manual readings will be obtained by calibrated tape and bob or calibrated rod (dip stick). Determine the level of the tank contents by reference manual innage measurements until three consecutive measurements agree within a range of 1 mm (1/16 inch).

5.13. Responsible Officers and Terminal Managers shall adequately train all military and civilian personnel who operate and maintain DFSP petroleum facilities/equipment to fulfill assigned duties effectively and safely. The RO/TM shall establish an effective publication familiarization program that includes all assigned employees to ensure military and civilian personnel familiarity with all applicable DoD Publications and DLA Energy Publications changes to include DLA Energy Interim Policy and Procedures.

5.14. Responsible Officers and Terminal Managers shall ensure that as a minimum, one trained Base Level Support Application (BLSA) operator is available at the DFSP during normal duty hours to process energy transactions to the Fuels Enterprise Server (FES). Additionally, the RO/TM shall fully train an alternate/back-up accountant to process transactions when the primary accountant is not available for duty. The RO/TM shall provide DLA Energy-N or DLA Energy BX/BY with current POC information for both the primary and alternate BLSA operator as personnel changes occur.

5.15. Responsible Officers and Terminal Managers shall accurately prepare and timely submit DFSP energy requirement forecasts and recurring energy reports as directed by DoD Directives/Manual, pertinent DLA Energy Interim Policy and Procedural Instructions, and BLSA guidance.

5.16. Responsible Officers and Terminal Managers shall make DWCF energy sales only to authorized customers.

5.17. Responsible Officers and Terminal Managers shall ensure daily, accurate recording and processing of all DWCF energy inventory transactions including receipts, shipments, sales/credits, and physical inventories into the Business Systems Modernization – Energy (BSM- E) in compliance with DoD 4140.25-M, pertinent DLA Energy Interim Policy and Procedural Instructions, and BLSA guidance.

5.17.1. DFSPs and TOAs that have no direct access to BSM-E shall provide the appropriate DLA Energy processing activity (DLA Energy Region, DLA Energy-RR or DLA Energy-N) with daily DWCF energy transactions during normal business hours.

5.17.2. The processing activity shall process the transactions to the applicable DLA Energy System of Record on the same business day when possible but no later than the next business day.

5.18. ROs and TMs shall establish a daily acceptable gain and loss limit per product and initiate investigations as they occur when the daily reconciliation of Book to Physical identifies a gain or loss that exceeds the established daily limit. Once initial daily limit has been determined, file document with supporting strapping charts and email an electronic copy to applicable region representative. As exceeded gains/losses are investigated and resolved, place the investigation into the daily document folder for the day in question. The investigation should target identifying the cause, corrective action necessary to correct, and corrective actions performed. The conclusions to daily investigation will remain in the daily accounting file to be used and referenced during EOM close.

5.19. Responsible Officers and Terminal Managers are required to certify that all inventory transactions have been processed daily (except weekends and holidays), the totals are reflected accurately, and shall investigate and record all DWCF energy out-of-tolerance operating storage gain/loss and/or in-transit gain/loss discrepancies, and that appropriate corrective actions are taken and/or related loss reports are submitted (DD Form 1348-8, DoD MILSPETS DFSP Inventory Accounting Document and End-of Month Report; DD Form 200, Financial Liability Investigation of Property Loss; DESC Form 24, End-Of-Month Operating Gain/Loss; DD Form 361, Transportation Discrepancy Report). Specific report(s) format and content are provided in DoD 7000.14-R, DoD Financial Management Regulation, Volume 12 - Special Accounts, Funds and Programs; DoD 4140.1-R, DoD Supply Chain Material Management Regulation, Chapter 5 - Deliver; and pertinent DLA Energy Interim Policy and Procedural Instructions.

5.19.1. Responsible Officers and Terminal Managers shall investigate excessive gains and losses outside the allowable tolerances stated in DoD 4140.25M. The investigation should identify the source and should include, a thorough review of local operating procedures, accounting records, leak and system pressure test data, ATG and Automated Data Capture (ADC) calibration/certification, tank strapping charts certification, and receipt and dispensing meter calibration data. Findings and corrective actions should be forwarded to the respective Regional Office within 30 days of receipt of inquiry.

5.19.2. Responsible Officers and Terminal Managers shall initiate comprehensive investigations when appropriate and in accordance with DoD 7000.14-R and DLA Energy guidance after discovering loss, damage, or destruction of DWCF product and/or DLA/DLA Energy property.

Responsible Officers and Terminal Managers shall notify the respective Region Office, DLA Energy-N and/or DLA Energy-W concerning incident details and point of contact information for the officer conducting the inquiry. Appendix 5 provides DLA Energy-N/W POCs. When necessary, the DLA Energy Director may appoint an investigating officer or financial liability board to determine appropriate corrective actions and to recoup funds when evidence of negligence, abuse, willful misconduct, or deliberate unauthorized property use /disposition exists.

5.19.2.1. Responsible Officers and Terminal Managers shall notify the DLA Energy Contracting Officer, contract officer representative, quality assurance representative, DLA Energy region personnel, and DLA Energy Fraud Counsel when they suspect theft or fraud involving petroleum deliveries and provide information underlying the suspicion.

5.19.2.2. Responsible Officers and Terminal Managers shall notify the DLA Energy contracting officer, quality personnel, region personnel, and DLA Energy Fraud Counsel whenever contacted by a federal, state, or local criminal investigator/auditor with questions concerning DLA Energy petroleum product deliveries to the DFSP or payments for petroleum products. The notification shall include the investigator/auditor name, title, agency name, and phone number. DLA Energy Fraud Counsel and Acquisition Counsel are available by email or at 703-767-5020.

5.20. Responsible Officers and Terminal Managers shall establish and maintain a document control file for all official DWCF documents, energy transaction documents and reports in compliance with DLA Energy P-3, Document/Data Control and Retention. The Responsible Officer or Terminal Manager shall review DWCF inventory transaction documentation and shall sign all appropriate DWCF transaction documents prior to filing in the Daily Document Control File.

5.20.1. Responsible Officers and Terminal Managers shall electronically backup and retain all BSM-E data as prescribed in DoD Directives and DLA Energy Interim Policy and Procedural Instructions.

5.21. Responsible Officers and Terminal Managers shall maintain DLA Energy funded Automated Information Systems in compliance with DLA Energy and application guidance.

6. PROPERTY ADMINISTRATOR RESPONSIBILITIES. The Property Administrator (PA) is an authorized representative of the Contracting Officer (CO) who is responsible for administering the contract requirements and obligations relating to the Government property at GOCO and COCO DFSPs. Pursuant to contract provisions, contractors are accountable for all Government property entrusted to their care at GOCO and COCO DFSPs and are responsible to control, protect, preserve and maintain Government property in compliance with DoD 4161.2-M, DoD Manual for the Performance of Contract Administration; Federal Acquisition Regulation

(FAR) Subpart 45.5 - Management of Government Property in the Possession of Contractors;

Department of Defense Federal Acquisition Regulation Supplement (DFARS) Subpart 245 - Government Property; and Federal Acquisition Regulation (FAR) Subpart 4 - Government Property. DoD 4140.25-M, DoD Management of Bulk Petroleum Products, Natural Gas and Coal, Volume II, Chapter 2 - Procurement and Contract Administration provides additional guidance relative to PA roles and responsibilities.

6.1. DLA Energy Contractor Managed/Military Service Contracted GOCO DFSPs. The GOCO PA is generally on site and may also serve as the Contracting Officer Representative (COR) and Quality Assurance Representative (QAR). PA responsibilities at DLA Energy managed GOCOs are as follows:

6.1.1. The PA shall provide routine oversight surveillance of GOCO operations, quality control, and commodity accountability and shall notify the Terminal Manager and/or Contracting Officer when deficiencies are noted to ensure corrective actions are implemented.

6.1.2. The PA shall conduct and record a formal semi-annual surveillance inspection of the GOCO DFSP (foreign or domestic) to assess effectiveness of the facility and equipment maintenance program. The PA shall further evaluate contractual compliance of the energy handling operations, quality control program, energy inventory accountability, transaction processing, and transaction data retention tasks. The PA shall record safety and/or environmental deficiencies on the surveillance inspection report and shall provide the surveillance inspection report to the Terminal Manager for appropriate and timely corrective action. The PA shall forward copy of the semi-annual surveillance inspection report and the written Terminal Manager corrective actions to the Contracting Officer, applicable Region Commander and DLA Energy-N. DLA Energy-N will provide copies to other DLA Energy functional offices as appropriate depending on the nature of deficiencies noted. The PA shall retain copies of all inspection reports and associated corrective actions in the official contact file.

6.1.2.1. The PA shall perform follow-up inspections as warranted and depending on criticality and risk associated with deficiencies reported during routine and scheduled surveillance inspections. At a minimum, the PA shall review deficiencies noted on inspections during subsequent semi-annual inspections to evaluate effectiveness of Terminal Manager corrective actions.

6.2. DLA Energy Contracted COCO DFSPs. The Quality Assurance Representative or DLA Energy Region Inventory Manager generally fulfills PA responsibilities at DLA Energy managed COCOs. PA responsibilities at DLA Energy managed COCOs are as follows:

6.2.1. The PA shall conduct periodic review of the COCO DFSP inventory account ledgers to ensure accurate energy inventory transaction processing and timely account ledger reconciliation.

6.2.2. The PA shall consult with DLA Energy inventory managers, quality managers, and other subject matter experts prior to conducting a scheduled surveillance visit to the COCO DFSP.

The staff consultation shall identify, review, and discuss any potential problem areas to evaluate during the COCO DFSP inspection.

6.2.3. The PA shall perform a minimum annual on-site inspection of the COCO DFSP to ensure Government property is accurately accounted and maintained in a contractually compliant manner. The PA shall record surveillance findings and provide copy to the Terminal Manager for corrective action. The PA shall forward a copy of the surveillance inspection report and the written TM corrective actions to the Contracting Officer, Region Commander and DLA Energy- N. DLA Energy-N will provide copies to other DLA Energy functional offices as appropriate depending on nature of deficiencies noted. The Contracting Officer shall retain copies of all surveillance inspections and corrective actions in the applicable contract file for two years beyond the contract expiration date.

6.2.3.1. The PA shall perform follow-up inspections as warranted and depending on criticality and risk associated with deficiencies reported during routine and scheduled surveillance inspections. At a minimum, deficiencies noted on inspections shall be reviewed during subsequent semi-annual inspections to evaluate effectiveness of Terminal Manager corrective actions.

6.2.4. DLA Energy business offices and regions may also perform surveillance inspections or over-the shoulder surveillance in conjunction with PA surveillance visits at contracted DFSPs.

7. FOREIGN GOVERNMENT (FG)/NORTH ATLANTIC TREATY ORGANIZATION

(NATO) DFSPS. DLA Energy-BG and applicable DLA Energy region offices are responsible for DLA Energy administered international agreements and NATO DFSPs. Whenever terms of an international agreement do not assign DFSP oversight responsibilities, Region Commanders shall appoint a responsible office or individual to provide oversight, ensure protection of U.S.

property interests, and fulfill designated duties as follows:

7.1. Ensure host nation compliance with terms of the bilateral agreement and related technical arrangements.

7.2. Serve as liaison officer between the United States and the host Government in matters pertaining to quantity and quality of DWCF energy in storage, unless otherwise designated in a bilateral agreement.

7.3. Report quantity and quality discrepancies of DWCF products to the applicable DLA Energy regional office, DLA Energy-N and BQ, the managing DLA Energy field activity, and the Joint Petroleum Office (JPO) in compliance with MIL-STD-3004 disposition procedures.

7.4. Ensure the Bulk Petroleum Terminal Message Report - RCS: DLA(W)1884 (DESC)MIN is accurately prepared and submitted on time.

7.5. Ensure all energy transactions are accurately recorded and processed into BSM-E within the time periods specified in the agreement, preferably on a daily basis excluding normal weekends and holidays.

7.6. Ensure official records, energy transaction documents, and reports are accurately prepared and maintained as specified in the agreement and applicable DLA Energy document retention guidance.

7.7. Investigate and record all DWCF energy out-of-tolerance operating storage gain/loss and/or in-transit gain/loss discrepancies and that appropriate corrective actions are taken and/or related loss reports are submitted (DD Form 200, Financial Liability Investigation of Property Loss; DD Form 1348-8, DoD MILSPETS DFSP Inventory Accounting Document and End-of Month Report). Specific report(s) format and content are provided in DoD 7000.14-R, DoD Financial Management Regulation, Volume 12, Chapter 7 - Financial Liability for Government Property Lost, Damaged or Destroyed; DoD 4140.1-R, DoD Supply Chain Material Management Regulation, Chapter 5 - Deliver; DoD 4500.9-R, Part II – Cargo Movement and pertinent DLA Energy Interim Policy and Procedural Instructions.

7.8. Auditing FG/NATO DFSPs. Audit bulk petroleum products IAW DoD Instruction 7600.2, Audit Policies, unless otherwise stated in country to country bilateral agreements. DoD Components negotiating agreements with FG or NATO agencies to receive, store, and issue DWCF product shall include the following clause in the negotiated NATO and FG agreements:

(U.S. personnel shall coordinate with NATO and FG (as appropriate) to independently audit or co-audit the DFSPs when discrepancies are identified by either entity.) When this clause is not incorporated, the agreement shall state: "U.S. independent audit is not authorized."

////SIGNED COPY ON FILE/////

CHARLES RACE

CAPT, SC, USN

Chief of Staff

OPR: DLA Energy-N OCRs: DLA Energy- B, C, G, R, W, and DLA Energy Regions

5 Appendixes

Appendix 1: Responsible Officer /Property Administrator Recommendation Letter Templates Appendix 2: Compliance Checklist Appendix 3: Daily, Weekly, Monthly, and Annual Routine Task Checklists Appendix 4. Transfer of Responsible Officer Checklist Appendix 5: Points of Contact

Appendix 1

AP1.1 Responsible Officer Appointment Letter

(Use your organizations letterhead)

From: (Enter Organization and Office Symbol) Subject: Appointment of Responsible Officer (RO)

To: DLA Energy-N

1. (Enter Appointee’s Name) is hereby appointed as the Responsible Officer (RO) for the following Defense Working Capital Fund (DWCF) fuel inventory account.

DoDAAC: Activity Name:

City/State/Country:

RO Name and Grade:

RO Duty Title:

RO Email:

DSN Voice:

DSN FAX:

Commercial Phone:

Commercial FAX:

Defense Fuel Support Point Type: (Place an X in appropriate Box)

Government Owned/Government Operated (GO/GO) Government Owned/Contractor Operated (GO/CO)

EXPIRATION DATE: DDMMYYYY

2. I certify that the appointed individual meets the qualification requirements specified in DLA Energy P-7 for appointment as the Responsible Officer.

(Signature of Appointing Officer) Typed Name and Signature Block Title of Appointing Officer

Cc:DLA Energy Region Military Service Control Point (SCP) -- if requested by SCP

AP1.1 Responsible Officer Appointment Letter (Cont.)

Responsible Officer’s Acknowledgement of Appointment:

I hereby acknowledge appointment as the Responsible Officer (RO) for DWCF fuel account specified in this appointment letter. I have read DLA Energy P-7 and understand my responsibilities to accept property and provide care and safekeeping of DWCF product and acknowledge the financial responsibilities thereof. Further I acknowledge the requirement to notify DLA Energy-N in writing at least two weeks prior to any anticipated transfer of RO responsibilities and appointment of a new RO.

_________________________ Date:

(Signature of Responsible Officer)

AP1.2. Property Administrator Recommendation letter

(Your organization letterhead)

DATE

MEMORANDUM FOR DLA ENERGY

Subject: RECOMMENDATION FOR APPOINTMENT OF PROPERTY

ADMINISTRATOR (PA)

To: DLA Energy-N

1. Name is hereby recommended for appointment as the Property Administrator for the following Defense Working Capital Fund (DWCF) fuel inventory account:

Activity Name:

DODAAC:

City/State/Country PA Name:

PA Duty Title:

PA Email:

DSN Voice:

DSN FAX:

Commercial Phone:

Commercial FAX:

Defense Fuel Support Point Type:

_____ Contractor Owned/Contractor Operated (CO/CO) _____ Government Owned/Contractor Operated (GO/CO)

EXPIRATION DATE: _______________

2. I certify that the appointed individual meets the qualification requirements specified in DLA Energy P-7 for appointment as the Property Administer.

3. The POC for this memorandum is (name, duty title, DSN phone number, commercial phone number, e-mail).

(Signature of Appointing Officer) Typed name and signature block Title of Recommending Officer

AP1.2.1. 1st Indorsement to Property Administrator Recommendation Letter

(Note: Prepare and send the following 1st Ind along with Recommendation letter. DLA Energy will obtain the necessary signature on the indorsement.)

1st Ind: DLA Energy Deputy Commander (or Designee)

PA Name is hereby appointed the Property Administrator (PA) for (contract number, location, city, state, country).

PATRICK J. DULIN

Deputy Commander DLA Energy

Cc: DLA Energy-N, Inventory Division

Appendix 2

Compliance Checklist

This checklist is intended to provide the RO/TM/PA with a guide to general compliance items that should be incorporated into local compliance inspections/internal reviews. The checklist is not inclusive of all fuels related policy and procedure compliance issues and may be expanded by the RO/PA to include any DFSP or Military Service unique or specific compliance items or special interest items.

1. RESPONSIBLE OFFICER/PROPERTY ADMINISTRATOR

1.1. Has a responsible officer (RO) or Property Administrator and Terminal Manager (TM) been appointed in writing for care and safekeeping of DWCF-owned product? (DLA Energy P- 7)

1.2. Are appointment and or required delegation letters on file? (DLA Energy-P-7, DLA Energy P-3, DLA Energy I-7)

1.3. Does the RO/PA/TM perform oversight to ensure care and safekeeping of Government property and DWCF-owned product? (DLA Energy P-7)

1.4. Is the weekly 1884 Report, Bulk Petroleum Terminal Message Report, submitted on time?

(DLA Energy I-2)

1.5. Are transactions (receipts, issues, inventories, etc) properly documented, reported, and stored? (DLA Energy I-21, DLA Energy P-1, DLA Energy P-2, DLA Energy P-3)

1.6. Does the RO or Terminal Manager (GOCO/COCO) investigate/research operating/storage discrepancies and submit required reports? (DLA Energy P-1)

1.7. If applicable, did the outgoing RO (Terminal Manager and PA) and incoming RO (Terminal Manager and PA) verify physical inventory at the time of the account transfer by completing DD Form 2920, Physical Inventory (Account Transfer)? (DLA Energy P-7)

1.8. Was advance written notice provided to DLA Energy 2 weeks prior to the departure of outgoing RO/PA and is a copy maintained with the appointment letter? (DLA Energy P-7)

1.9. Does the DFSP have a publication familiarization program and does it include DoD and DLA Energy publications to include DLA Energy Interim Policy and Procedures? (DLA Energy P-7)

1.9.1. Is the Accountable Official (RO/TM/PA) advised of newly published or amended Interim Guidance? If so, what is the DFSP process for implementing updated guidance? (DLA Energy I-23)

1.10. Has the Accountable Official (RO/TM/PA) identified and appointed a Base Level Systems Application (BLSA) Administrator in writing on an annual basis? (DLA Energy I-23)

1.11. Does the RO or PA and TM ensure the BLSA Administrator validates user privileges within BLSA annually at a minimum and documents the validation? (DLA Energy I-23)

1.12. Is the Accountable Official (RO/TM/PA) aware and in compliance with those responsibilities as listed in DLA Energy I-23?

2. INVENTORY

2.1. Are end-of-month inventory adjustment transactions and operating gain/loss transactions processed within two business days following the last calendar day of each month? (DLA Energy P-1)

2.2. Are inventory quantities corrected to 60°F? (DLA Energy P-1)

2.3. Are inventories documented in accordance with DLA Energy P-1? (DLA Energy P-1)

2.4. Are minimum/maximum inventories maintained IAW the inventory management plan?

(DoD 4140.25M VII, Chap 11)

2.5. Have minimum inventory level violations lasting longer than 72 hours been reported to the applicable offices? (DoD 4140.25M Volume II, Chap 11)

2.6. Does the physical inventory reflect the total DLA Energy capitalized inventory to include pertinent storage tanks, pipeline manifolds, breakout tanks, and refueling vehicle inventories?

(DLA Energy P-1)

2.7. Are End of Month Adjustments, Determinable Gains/Losses, and Regrades recorded on DESC Form 24 or DD Form 1348-8 and approved by the RO or TM? Has the RO or TM signed the DESC Form 24 or DD Form 1343-8 and provided a copy to DLA Energy-N? (DLA Energy P-1 and 4140.25M, Vol. II, Chapter 10)

3. GAINS AND LOSSES

3.1. Are gains and losses that exceed tolerance factors investigated to determine the cause and documented/ reported on the DD Form 1348-8, DFSP Inventory Accounting Document and End of Month Report, or DESC Form 24, End of Month Inventory Summary Report? Are regrades and determinable gains/losses documented on the DD Form 1348-8 and approved by the Responsible Officer or Terminal Manager? Note: The DESC Form 24 is automatically generated for DFSPs using the FCC or current version of FMD and may be used in lieu of the DD Form 1348-8 until the FCC and current version of FMD are replaced. (DLA Energy P-1 and DoD 4140.25M Chapter 10, MIL-STD 3004A)

3.2. When gains/losses exceed established tolerances, are inventory records adjusted by the actual quantity? (DoD 4140.25M Vol II Chap 10)

3.3. Are in-transit variances computed as follows: (example) (DoD 4140.25M Vol II Chap 10)

Quantity shipped per DD 250 80,000 gallons Quantity received by gauge 79,800 gallons Difference (loss) -200 gallons Variance %: 200/80,000 = 0.002 x 100 = 0.25% loss

3.4. Are procedures followed to ensure operating storage and in transit variances (gain/loss) are within tolerance? (DoD 4140.25M Vol II Chap 10; and DLA Energy P-2).

4. GAUGING

4.1. Does the gauging process include the measurement of fuel, water and temperature? (DLA Energy P-1)

4.2. Are fuel and water readings recorded in feet, inches and 1/16-inch increments? API Manual of Petroleum Measurement Standards (MPMS) Chapter 3

4.3. Does each storage tank have a certified individual strapping table/chart that shows measurements in feet, inches and 1/16 inch increments?