Policy_Number_DESC-P-12.pdf

DEFENSE LOGISTICS AGENCY

DEFENSE ENERGY SUPPORT CENTER

8725 John J. Kingman Rd. Suite 4950

Fort Belvoir, Virginia 22060-6222

Policy Number: DESC-P-12 3 May 2010

Defense Energy Support Center (DESC) Sustainment, Restoration and Modernization

(SRM) Funding Policy for Fixed Petroleum Facilities

1. Purpose: This DESC SRM funding policy for Fixed Petroleum Facilities provides the Military Services with a funding matrix that delineates DESC’s responsibilities for SRM funding of Fixed Petroleum Facilities. The Military Services are responsible for programming funding of facilities infrastructure SRM not identified in this document.

2. General: Pursuant to DOD 4140.25-M, DOD Management of Bulk Petroleum Products, Natural Gas, and Coal and DOD 4100.39-M, Federal Logistics Information System (FLIS), Volume 13, Material Management Decision Rule Tables April 2010, the Defense Logistics Agency (DLA) designated DESC the Integrated Materiel Manager (IMM) for bulk petroleum and other energy products. DESC is responsible for establishing and executing the SRM Program for Military Service-owned real property infrastructure used to store and/or dispense Defense Working Capital Fund (DWCF) petroleum products. The DESC Facilities SRM Branch (DESC-N) is responsible for executing the DESC SRM Program for Fixed Petroleum Facilities.

This policy governs all capitalized Military Service-owned and permitted Defense Fuel Support Points (DFSPs) that store and dispense DWCF petroleum products. Contractor- Owned/Contractor-Operated (COCO) DFSPs are not eligible for SRM funding. This policy was coordinated with the Military Service Control Points (SCPs) and is approved by DESC as interim guidance pending inclusion in DoDM 4140.25.

2.1. Supersession: This is the initial issuance of this policy document.

2.2. References:

2.2.1. DOD 4140.25-M, Volume II, Chapter 8, Management of Storage and Distribution Facilities

2.2.2 DOD 4140.25-M, Volume III, Chapter 8, DOD Bio-Fuels Program Biodiesel Blend (B20) and Ethanol Blend (ED 75-ED 85)

2.2.3. Defense Logistics Agency Directive (DLAD) 5025.30, DLA ONE BOOK, Chapter on Facility Sustainment, Restoration and Modernization (SRM) Program, October 2008

2.2.4. Unified Facilities Criteria (UFC) 3-701-09, Facilities Pricing Guide, September 2009

2.2.5. Unified Facilities Criteria (UFC) 3-460-01, Design, Petroleum Fuel Facilities

2.2.6. Unified Facilities Criteria (UFC) 3-460-03, Operation & Maintenance: Maintenance of Petroleum Systems, January 2003.

DESC-P-12

3 May 2010

2.2.7. Unified Facilities Criteria (UFC) 3-600-1, Fire Protection for Engineering, Design and Construction, September 2006

2.2.8. DODI 4165.14, Real Property Inventory and Forecasting, March 2006

2.2.9. NAVFAC MO0230, Maintenance and Operation of Petroleum Fuel Facilities, Aug 1990

2.2.10. DESC-P-11, Aerospace Fuels, April 2009

2.2.11. DoD Facility Sustainment Model, current version.

3. Policy:

3.1. DESC shall fund SRM projects in accordance with the referenced documents. The majority of DESC SRM funding is determined by two factors: (1) DLA is recognized as the preponderant user of the applicable Service’s capitalized fuel facility; and, (2) the Real Property Inventory (RPI) Asset Allocation User Organization Code must be coded “33” or by a corresponding code on the Service real property records to reflect DLA as the responsible agency for SRM. For real property that DESC occupies or uses and is not the preponderant user, an Interservice Support Agreement (ISA) as well as a real estate agreement must be in place to define SRM costs as well as liability. The non-preponderant use portion must be coded “33” or by a corresponding organization code on the Service real property inventory.”

3.2. The SRM funding matrices in Appendices 1 and 2 are for a quick reference regarding DESC and Military Services funding responsibility. All deficiencies must be validated and approved prior to funding in accordance with DLAD 5025.3. The Appendices in conjunction with the definitions below will assist in determining funding eligibility:

3.2.1. Sustainment is facility maintenance and repair activities necessary to keep facilities in good working condition over their expected service lives and includes regularly scheduled adjustments and inspections, preventive maintenance tasks, and emergency response and service calls for minor repairs. It also includes major repairs or replacement of facility components that are expected to occur periodically throughout the facility life cycle.

3.2.2. Restoration is repair and replacement work to restore facilities damaged by inadequate sustainment, excessive age, natural disaster, fire, accident, or other causes.

3.2.3. Modernization is alteration of facilities solely to implement new or higher standards, to accommodate new functions, or to replace building components that typically last more than 50 years. Restoration or modernization can be either minor construction (currently < $750K) or Military Construction (currently > $750K).

3.3. The SRM funding for Fixed Petroleum Facilities does not include repairing or replacing non-attached equipment or furniture. DESC funding policy for non-SRM equipment such as Fuels Automated System (FAS) Communications and Automatic Data Processing Equipment (ADPE) and non-attached equipment, supplies, operations manuals, and other documents shall be covered under other DESC policy. The DESC Environmental Program is a separate program from SRM and is not covered by DESC-P-12. Information regarding SRM for the Aerospace Fuels Program is covered in DESC-P-11. Other tasks associated with facility operations such as custodial services, snow removal, grass cutting, landscaping, waste disposal, and the provision of central utilities are also not covered by this policy, but may be covered under other DESC policy or agreements.

///Signed Copy on File///

MICHAEL D. BRODERICK

Director, Business Process Support Defense Energy Support Center

OPR: DESC-N

OCR: DESC-R/G/W

Appendices:

Appendix 1 – Facilities Funding Matrix

Appendix 2 – Capital Equipment Funding Matrix

Appendix 3 – Funding Clarification Notes

AP1. APPENDIX 1

Facilities Funding Matrix The Facility types listed in Appendix 1 are for quick reference only. Projects submitted under one of the below facility descriptions will be subject to DESC approval. Typical funding responsibility is identified in the columns labeled MILCON and SRM. See Appendix 3 for detailed facility descriptions.

Facility Descriptions Facility Basic Category Codes

UFC-3-701-07

MILCON SRM

Additive Injection Systems (fixed) Varies DLA DLA

Alternative Fuels Infrastructure 124 DLA (1)DLA

Architecture Plans 121-126,163, 411 SVC/DLA SVC/DLA

Beautification Projects varies SVC SVC

Canopies and Shelters 141/214 DLA (2)SVC/DLA

Cathodic Protection 121-126,163, 411 DLA DLA

Demolition of Facilities 121-126,163, 411 DLA (3)DLA

DESC Permitted Facilities All DLA DLA

Dredging 935 DLA (2)SVC/DLA

Emergency Eyewashes and Showers (fixed) 121-126,163, 411 DLA DLA

Facility Documentation / As-Built Drawings All DLA (6)SVC/DLA

Emergency Generators (fixed) 121-126,163, 411 DLA SVC/DLA

Filtration Systems (fixed) 121-126,163, 411 DLA(7) DLA(7)

Fire Protection Systems All DLA DLA

Flush Stations 126 DLA DLA

Fuel Storage & Distribution Systems 121-126,163, 411 DLA DLA

Geodesic Domes, Fixed Cone Roofs, and Floating Pans

411 DLA DLA

Oil Water Separator 831 DLA DLA

Operations Building (excluding POL Lab) 144 DLA (2) SVC/DLA

Operations Manual Varies SVC/DLA SVC/DLA

Operator and Preventive Maintenance Varies (4) (4)

Overfill Protection Systems 126 DLA DLA

Pantographs, Loading Arms and Cargo Hoses (fixed) 121 DLA DLA

Pavement and Roads 800 Series SVC/DLA SVC/DLA

POL Laboratories 144 SVC/DLA (5) SVC/DLA (5)

Portable Emergency Generator Connections 121-126,163, 411 DLA DLA

Product Recovery Systems 124 DLA DLA

Railcar Facilities 860 SVC/DLA SVC/DLA

Recurring Maintenance All DLA DLA

AP1. APPENDIX 1

Facilities Funding Matrix (Cont.)

Facility Descriptions Facility Basic Category

Codes

UFC-3-701-07

MILCON SRM

Refueler Maintenance Facility 218 SVC SVC

Refueler Truck Parking 852 DLA DLA Seawalls and Breakwaters 154, 161, 164 SVC/DLA (2) SVC/DLA

Security Fencing and Lighting 872, 812 DLA DLA

Spill Containment Varies DLA DLA Storage Shelters/POV

Parking 149, 852 SVC SVC

Tank Strapping Charts 411 DLA (8)DLA

Vehicle Fueling Facilities

(SSTA) 123 DLA DLA

Waterfront Facilities 151 SVC/DLA (2) SVC/DLA

(1) Alternative Fuels Checklist must be submitted in order to validate the requirement. The checklist can be found in DOD 4140.25M.

(2) Denotes shared funding responsibility with the Service based on benefit assessment to each user or IAW published Facilities Sustainment Model (FSM) rules.

(3) Does NOT include BRAC.

(4) Operational and preventive maintenance is funded through Terminal Operations and not the SRM program.

(5) Draft guidance for funding of laboratory infrastructure is in coordination. For Fiscal Year 2009, only laboratory infrastructure permitted to DESC is eligible for SRM funding. Appendix 3 contains the proposed funding guidance.

(6) Facility documentation/as-built drawings will only be funded by SRM when in-conjunction with an SRM project for repair, upgrade, modification or new construction. Replacement of lost drawings is not covered and is the responsibility of the military service.

(7) While filter elements for filtration systems are not eligible for SRM funding, they are covered under another DESC funding policy.

(8) Certified tank strapping charts will be provided when required as a part of an out-of-service tank inspection or when internal tank maintenance is performed.

AP2. APPENDIX 2

Capital Equipment Funding Matrix The Equipment types listed in Appendix 2 are for quick reference only. Projects submitted under one of the below facility descriptions will be subject to DESC approval on a case-by-case basis.

Equipment Descriptions Cat Code MILCON Installed Equipment

Automated Fuel Handling Equipment (AFHE) N/A DLA DLA

Automated Fuel Service Station (AFSS) N/A DLA DLA

Automatic Tank Gauging (ATG) N/A DLA DLA

Pipeline Leak Detection (fixed) N/A DLA DLA

AP3. APPENDIX 3

Funding Clarification Notes

Additive Injection Systems (fixed): Additive injectors are eligible for funding when required to support neat fuel additization, JP-8+100, or to “sweeten” fuel to meet the required specification limits.

Alternative Fuels Infrastructure: Conversion or the modification of fuel storage facilities to store alternative fuels such as E85 or biodiesel is eligible for DESC funding. DESC will also fund construction of new storage facilities when supported by economic and operational justification IAW DOD 4140.25M.

Architectural Plans: Architectural plans are eligible if the real property is coded for DLA.

Installation design criteria will be considered. The architectural plans must be required for a facility repair/upgrade and not strictly because architectural plans are required.

Automated Fuel Handling Equipment (AFHE): Automated Fuel Handling Equipment (AFHE) systems and life-cycle maintenance costs are eligible for DESC funding consideration, but require detailed economic justification in accordance with applicable Financial Management Regulations to include DOD Financial Regulation 7000.14-R. Equipment automation and sensors are normally justified for large ocean-going fuel terminals that handle large fuel quantities to provide accident or spill control and isolation capabilities. Smaller operations do not typically justify this level of automation although a proposed project with strong economic analysis may determine that an AFHE project is justified.

Automated Fuel Service Station (AFSS) Equipment: AFSS equipment installation and associated AFSS life cycle maintenance costs are eligible for DESC funding. DESC determines which automated AFSS systems and auxiliary equipment best serve DESC and customer operational requirements. AFSS funding is contingent upon installation of only DESC-approved AFSS systems and equipment.

Automatic Tank Gauging (ATG) Equipment: ATG equipment installation and associated life cycle maintenance costs are eligible for DESC funding. DESC determines which automated ATG systems and auxiliary equipment best serve DESC and customer operational requirements.

ATG funding is wholly contingent upon installation of only DESC-approved ATG systems and equipment.

Beautification Projects: Installation beautification projects are not eligible for DESC SRM funding.

Canopies and Shelters: Canopies at truck racks and fueling stations are eligible for DESC funding when supported by climatic or safety-related justifications. Canopies at refueler/vehicle parking lots are eligible for DESC SRM funding when supported by climatic or safety-related justifications and provided the refuelers are used to store DESC capitalized product. Many equipment types are designed for climatic exposure and do not require canopies or shelters.

Shelters for specialized equipment like boats & locomotives will be considered on a case-by-case basis.

Cathodic Protection: Cathodic protection (CP) installation and annual CP maintenance and inspection for systems used solely to protect facilities that store and/or distribute DWCF products are eligible for DESC funding. DESC centrally manages the CP program and performs site surveys to evaluate CP requirements, as well as design and install site-appropriate CP systems. DESC's CP program also includes analysis of periodic CP rectifier readings taken by the facility operator. DESC does not fund for taking periodic CP rectifier readings since it is considered operator maintenance unless there is a requirement for a state certified CP inspector.

Demolition of Facilities: DLA funds facility demolition using MILCON appropriation when the MILCON project involves demolition of existing facilities. DESC will also fund demolition of non-required real property facilities that last contained DLA-owned product and for which DESC had SRM funding responsibility unless the closure is due to Base Realignment and Closure (BRAC) decisions.

DESC Permitted Facilities: DESC is responsible for the SRM of permitted petroleum DFSPs.

Further information on the permitting of Service Fixed Petroleum Facilities is available by contacting the DLA Real Estate office.

Dredging: Dredging of dedicated waterways used solely for vessel movement and delivery of DWCF products is eligible for DESC funding consideration IAW pertinent Corps of Engineer Support Agreements. Dredging of shared-use waterways is cost shared based on a benefit assessment involving all users or IAW established Facilities Sustainment Model (FSM) rules.

Emergency Eyewashes and Showers (fixed): DESC will fund emergency eyewashes and showers when they are integral to fixed fuel facilities and do not exceed OSHA standards.

Typical installation locations include pump houses, and loading/offloading points. Installations are required to provide all required utilities (potable water and electricity) up to the point of tie-in of the eyewash or shower when the project is solely for the installation of the emergency eyewash or shower. Portable eyewashes and showers are not eligible for SRM funding.

Emergency Generators (fixed): Fixed emergency generator installation is eligible for DESC funding consideration only when commercial power outages are frequent, extensive, and result in installation/base failure with respect to their DWCF fuel mission and the primary use of the generator is for DWCF mission support.

Facility Documents/As-Built Drawings: Updates to as-built drawings are eligible for DESC funding as part of the scope of an SRM project that DESC funds, but not for complete as-built drawings for updates to existing drawings if the specific system has not been modified under a SRM project.

Filtration Systems (fixed): Fixed filtration systems are eligible for DESC SRM funding.

Disposable filter elements for these filtration systems are not funded through SRM, but rather a separate DESC program.

Fire Protection Systems: DESC will fund fire protection systems for petroleum infrastructure supporting Class III fuels as required by the National Fire Protection Association (NFPA) and the UFC 3-600-1, Fire Protection for Facilities Engineering, Design and Construction.

Flush Stations: DESC will fund flush stations to allow defueling of refueler trucks, and pantograph flushing associated with hydrant and bulk fuel piping.

Fuel Storage and Distribution Systems: DESC will fund those fixed facilities that are used to receive, store and issue DWCF fuel mission.

Geodesic Domes, Cone Roofs, and Floating Pans: Geodesic domes and cone roofs are eligible for DESC funding when supported by economic and operational justification. Northern tier DFSP locations with significant annual snowfall and southern tier DFSP locations with significant annual rainfall are typical candidates for geodesic dome installation. Floating pans will be provided in accordance with UFC 3-460-01 for new above ground vertical tank construction. DESC will fund floating pan retrofit projects when a DFSP presents justification.

Oil Water/Separators(OW/S): OW/S are eligible for DESC funding, as long as they are a direct part of the facility storing DWCF-owned product.

Operations (Ops) Buildings (excluding POL Lab): Operations buildings are eligible for DESC SRM funding on a cost-sharing basis with the host installation/base. Negotiated cost-sharing with the host installation/base is proportionally determined based upon space occupied by fuels personnel and Business Systems Modernization – Energy (BSM-E) and Automatic Tank Gauging (ATG) equipment. Where the building supports 100% DWCF distribution and operations, no host funds will be necessary.

Operation Manuals: A comprehensive fuel installation operation manual is considered an operational responsibility and cannot be funded by SRM. The installation should receive as part of facility replacement and upgrades the manufacturers' operation manuals. Updated operating procedures for facility upgrades will be completed and provided for incorporation into existing operation manuals. Replacement of these manuals is also not the responsibility of the SRM program.

Operator and Preventive Maintenance: Operator maintenance is not eligible for SRM funding, but may be covered under another DESC program related to facility operations.

Operator maintenance is work that is accomplished during routine inspections and during system use and operation. Operator maintenance may be, but is not necessarily limited to, work such as the replacement of ground wires, plugs, and clips, the replacement of O-rings and gaskets, the tightening of nuts, bolts, and screws to prevent leakage, and cleaning of fuel system strainers.

Overfill Protection Systems: DESC funds procurement and installation of fixed facility overfill protection systems. DESC will fund for the sustainment of Service funded/installed systems.

Pantographs, Loading Arms and Cargo Hoses (fixed): Only fixed Pantographs, Loading Arms and Cargo Hoses used in DWCF loading/unloading operations are eligible for SRM funding at fixed real property facilities. DESC shall in no instance fund portable pantographs due to their categorization as equipment items rather than real property. Document preparation to justify fixed pantograph funding shall include economic analyses that clearly illustrate projected operational savings such as decreased hose costs and cost savings over fuel vehicles.

Pavements and Roads: Sustainment of roads located within the DFSP and dedicated to DFSP product operations are eligible for DESC funding consideration. DESC shall in no instance fund common use road sustainment within the installation/base infrastructure.

Pipeline Leak Detection (fixed): As required by federal, state, and local regulations, DESC will fund for the installation of leak detection on petroleum piping.

POL Laboratories: For Fiscal Years (FY) 2009 and 2010, only DESC-permitted laboratory infrastructure is eligible for SRM funding. Draft guidance for funding of laboratory infrastructure is in coordination and is as follows: DESC will fund 100% of the laboratory infrastructure costs for any intermediate or base laboratory that tests capitalized products; is coded D33 or equivalent in the real property records; and, has the same maximum testing capability for any capitalized product as required by MIL-STD-3004. DESC and the Military Services will fund laboratory infrastructure on a cost-sharing basis for any intermediate or base laboratory that does not meet the above criteria. Area Laboratories testing capitalized product and coded D33 or equivalent in the real property records will be funded on a cost-sharing basis.

If this guidance is accepted, this policy will become effective in FY11 in order to capture the increased costs in the budget cycle.

Portable Emergency Generator Connections: Installation or replacement of fixed connections for portable emergency generators are eligible for funding.

Product Recovery Systems: Installation and maintenance of fixed product recovery systems, when adequately supported with economic and/or operational justification, are eligible for DESC funding.

Railcar Facilities: DESC will fund maintenance and sustainment for railcar loading/off-loading facilities and rail spurs from the installation fence line as long as the facility is for the sole use of DWCF fuel mission and coded for DESC sustainment. If the rail line is joint use, DESC and the Military Services will fund the maintenance and sustainment on a cost-sharing basis.

Recurring Maintenance: Recurring maintenance at fixed capitalized facilities for which DESC has SRM sustainment responsibilities is eligible for DESC funding. This includes system maintenance beyond local base capabilities, but not limited to corrosion control and spot painting, meter and gauge calibration, cathodic protection system maintenance, protective fire system maintenance, fuel line pressure testing, pipeline pigging, and hydrant system maintenance. The annual recurring maintenance request must include a cost breakdown spreadsheet for each facility requiring funding in order to allocate the costs properly.

Operational and daily maintenance defined in UFC 3-460-03, Operation & Maintenance:

Maintenance of Petroleum Systems and NAVFAC MO0230 to include lawn mowing, tree trimming, valve greasing, valve seal replacement, vehicular/TOE maintenance, periodic cathodic protection readings, and base labor are not eligible for SRM funding.

Refueler Maintenance Facility: Refueler Maintenance Facilities are not eligible for DESC SRM funding.

Refueler Truck Parking: Refueler truck parking is eligible for SRM funding provided the refueler is used to store DESC capitalized fuel. Proposed refueler vehicle parking area projects shall provide sufficient space to satisfy minimum containment and Military Service standards.

DESC shall not fund parking areas even in part for employees, visitors, dignitaries, or workforce personnel.

Seawalls and Breakwaters: DESC will fund seawalls and breakwaters to the extent they protect DWCF storage/distribution facilities as well as fuel piers whose purpose is DWCF fuel loading/offloading operations. Otherwise, negotiated funding shall be proportional to actual facility use rate.

Security Fencing and Lighting: DESC will fund full security fencing (to include outriggers/barbed wire or razor wire) at any isolated DWCF fuel facility (not located within the confines of an installation/base perimeter security fence). DESC will fund a security fence (7’ high total) around DWCF fuel facilities which are located within installation/base fencing to control access and prevent unauthorized access to the capitalized fuel facility. This fencing is only intended to prevent unauthorized access to the facilities, and does not include the outriggers/barbed wire or razor wire and other physical security measures that would be required at an isolated facility. DESC will fund adequate security/operations lighting within fuel facility boundaries. Automatic entry gates as part of the fencing system will be funded by SRM when supported by security, operational and economic justification. Security cameras are equipment and not eligible for DESC SRM funding.

Spill Containment: DESC will fund both land and water-based spill containment projects for DWCF storage tanks, loading/offloading points, and POL fueling vehicle-parking areas when required by federal, state, or local environmental regulations are eligible for DESC funding.

Storage Shelters/POV Parking: Storage shelters and parking for personally owned vehicles are the responsibility of the Military Service and not eligible for DESC funding.

Tank Strapping Charts: Certified tank strapping charts will be funded when required as a part of an out-of-service tank inspection or when internal tank maintenance is performed.

Vehicle Fueling Facilities (Government Service Stations): DESC will fund for the sustainment of these facilities. Installations will request through their Service Control Point to DESC-W, for the addition of an Automated Fuel Service Station (AFSS) at manually operated service stations.

Waterfront Facilities: DESC will fund sustainment of waterfront facilities used exclusively to load/offload DWCF fuel. If the waterfront facility is joint use, DESC and the Military Services will fund the maintenance and sustainment on a cost-sharing basis. These facilities are normally associated with fuel piers and include fixed automatic spill booms, launch facilities, deployment docks, worker shelters, control rooms, marine loading arms and hoses at the pier, inflatable fender systems, and dolphins. DESC will also fund recurrent underwater pier inspections to determine structural integrity of submerged structures. Shared use waterfront facilities will be cost shared based on negotiated funding proportional to actual facility use rate or IAW established Facilities Sustainment Model (FSM) rules.