Attachment_for_Amendment_0013_-_B19.34__ECONOMIC_PRICE_ADJUSTMENT_(1).pdf

B-0001/B19.34 ECONOMIC PRICE ADJUSTMENT (OVERSEAS BULK) (DLA ENERGY JAN 2012)

(a) WARRANTIES. The Contractor warrants that--

(1) The unit prices set forth in this offer and/or contract do not include allowances for any portion of the contingency covered by this contract provision; and

(2) The prices to be invoiced hereunder for listed items shall be computed in accordance with these escalation provisions.

(b) DEFINITIONS. As used throughout this contract provision, the term--

(1) Base unit price means the unit price set forth opposite the item in the Schedule.

(2) Reference price means the market price indicator set forth in the Table in (f) below with which the base unit price is to fluctuate. NOTE: The term market price indicator will be referred to hereafter as “reference price” in this contract provision.

(3) Date of delivery is defined as follows:

(i) FOR TANKER OR BARGE DELIVERIES.

(A) F.O.B. ORIGIN. The date and time vessel commences loading.

(B) F.O.B. DESTINATION. The date and time vessel commences discharging.

(ii) FOR PIPELINE DELIVERIES. The date and time product commences to move past the specified f.o.b. point.

(iii) FOR ALL OTHER TYPES OF DELIVERIES. The date product is received.

(c) ADJUSTMENTS.

(1) The Contractor shall give written notice to the Contracting Officer, Defense Logistics Agency Energy (DLA Energy), of any delivery and associated change in the reference price within 15 working days from the date thereof.

Contractor failure to timely notify the Contracting Officer of any delivery and associated change in the reference price may result in late or incorrect payment of the relevant invoice.

(2) Subject to the conditions of this contract provision, the prices payable under this contract shall be the base unit price increased or decreased by the same number of cents, or fraction thereof, that the reference price shall have increased or decreased.

(3) An increase or decrease in any reference price published in a trade price service or in a commercial journal shall apply only to deliveries made on and after the effective date of the price change as stated in the publication.

(4) The Contracting Officer will issue a modification to this contract to reflect any change pursuant to this provision.

However, no increase in a contract unit price shall be executed pursuant to this provision until the increase in the applicable published reference price has been verified by the Contracting Officer.

(5) FAILURE TO DELIVER. Notwithstanding any other conditions of this contract provision, no upward adjustment shall apply to product scheduled under the contract to be delivered before the effective date of the adjustment, unless the Contractor’s failure to deliver according to the delivery schedule results from causes beyond the Contractor’s control and without its fault or negligence, within the meaning of paragraphs (f), Excusable Delays, and (m), Termination for Cause, of the CONTRACT TERMS AND CONDITIONS – COMMERCIAL ITEMS clause of this contract, in which case the contract shall be amended to make an equitable extension of the delivery schedule.

(6) UPWARD CEILING ON ECONOMIC PRICE ADJUSTMENT. The Contractor agrees that the total increase in any contract unit price pursuant to these economic price adjustment provisions shall not exceed 330 percent of the award price, except as provided hereafter.

(i) If at any time the Contractor has reason to believe that within the near future a price adjustment under the conditions of this contract provision will be required that will exceed the current contract ceiling price for any item, the Contractor shall promptly notify the Contracting Officer in writing of the expected increase. The notification shall include a revised ceiling the Contractor believes is sufficient to permit completion of remaining contract performance, along with appropriate explanation and documentation as required by the Contracting Officer.

(ii) If an actual increase in the reference price would raise a contract unit price for an item above the current ceiling, the Contractor shall have no obligation under this contract to fill pending or future orders for such item, as of the effective date of the increase, unless the Contracting Officer issues a contract modification to raise the ceiling. If the contract ceiling will not be raised, the Contracting Officer shall so promptly notify the Contractor in writing.

(7) REVISION OF REFERENCE PRICE INDICATOR. In the event--

(i) Any applicable reference price is discontinued or its method of derivation is altered substantially; or

(ii) The Contracting Officer determines that the reference price consistently and substantially failed to reflect market conditions--the parties shall mutually agree upon an appropriate and comparable substitute for determining the price adjustments hereunder. The contract shall be modified to reflect such substitute effective on the date the indicator was discontinued, altered, or began to consistently and substantially fail to reflect market conditions.

If the parties fail to agree on an appropriate substitute, the matter shall be resolved in accordance with paragraph (d), Disputes, of the CONTRACT TERMS AND CONDITIONS – COMMERCIAL ITEMS clause of this contract.

(8) CONVERSION FACTORS. If this contract provision requires quantity conversion for economic price adjustment purposes, the conversion factors for applicable products, as specified in the CONVERSION FACTORS provision, apply unless otherwise specified in the Schedule.

(d) EXAMINATION OF RECORDS. The Contractor agrees that the Contracting Officer or designated representatives shall have the right to examine the Contractor's books, records, documents, or other data the Contracting Officer deems necessary to verify Contractor adherence to the conditions of this contract provision.

(e) FINAL INVOICE. The Contractor shall include a statement on the final invoice that the amounts invoiced hereunder have applied all decreases required by this contract provision.

(f) TABLE.

REFERENCE PRICE TABULATION

ITEM

NO.

(LISTED

ITEMS)

NAME OF

PUBLICATION

HEADING UNDER

WHICH REFERENCE

AND NAME OF

PRODUCT

LOCATION WHERE

REFERENCE PRICE

IS APPLICABLE

REFERENCE PRICE AS

OF OCTOBER 26, 2015

(EXCLUDES ALL TAXES)

See Below

Platt’s Oilgram Price Report (U.S. Edition)

Product Price Assessments (European Bulk)

See Below See Notes Below

NOTE: Buyer shall include a note or notes in the Table that will identify the specific publication(s), method(s), and time period(s) for calculating the reference price(s).

***FOR AEM***

PRODUCT

REFERENCE PRODUCT

(LOCATION)

REFERENCE PRICE/USG

EFFECTIVE OCTOBER 26, 2015

F76 Gasoil 0.1

(100% Cargoes CIF NWE Basis ARA) 1.371075

F76 Gasoil 0.1%S

(100% FOB Med Basis Italy) 1.332382

F76 Gasoil

(Asia/Singapore Subheading) 1.372381

F76 Gasoil

(Arab Gulf, FOB) 1.322381

F76 ULSD 10ppmS

(FOB Med Cargo) 1.380431

F76

ULSD/USGC

Inland East Gulf (IEG) Platt’s Oilgram

1.398080

JP5

Jet Kerosene

(100 % Cargoes CIF NWE Basis ARA) 1.417240

JP8

(100% Cargoes CIF NWE Basis ARA) 1.417240

JP8

Jet Av. Fuel

(100% FOB Med Basis Italy) 1.362889

JP8

Jet Kerosene

(Asia/Singapore Subheading) 1.368571

JP8

Kerosene

(Arab Gulf, FOB) 1.321429

JA1

(100% Cargoes CIF NWE Basis ARA) 1.417240

JA1

Jet Av Fuel

(100% FOB Med Basis Italy) 1.362889

JA1

Jet Kerosene

(Asia/Singapore Subheading) 1.368571

JA1

Kerosene

(Arab Gulf, FOB) 1.321429

A. For Platt's Oilgram: NOTE: The Reference prices are calculated by averaging the respective low prices and averaging the respective high prices for the two days preceding the date of delivery, the date of delivery, and the two days subsequent to the date of delivery published effective days' prices. Both the low and high averages are then averaged to determine the new Reference Price. This average price is averaged to two (2) decimal places, regardless of whether the price is stated in dollars per barrel, dollars per metric ton, or cents per USG. This average will be converted to dollars per USG using the conversion factors cited in Paragraphs C and D, if applicable, and rounded to six (6) decimal places.

In order to calculate the price, first determine the date of delivery price. If the actual date of delivery falls on Saturday or Sunday, the date of delivery for pricing purposes will be Friday. If the actual date of delivery falls on a holiday, then the date of delivery for pricing purposes will become the previous business day.

If Platt’s fails to publish the price for a particular product on the date of delivery, then the date of delivery will become the previous business day in which a price is published.

Once the date of delivery price is determined, then obtain the published effective days prices for the two business days immediately preceding the date of delivery and the two business days immediately subsequent to the date of delivery.

B. Any product offer must specify on which escalator it is based. Offers for F76, JA1, and JP8, may use any or all of the stated escalators for that product.

C. The conversion factor 328.42 USG/Metric Ton will be used to calculate JP5, JA1, and JP8 escalators under Jet Av.

Fuel, 100% FOB Med Basis, Italy, and Jet Kerosene, 100% Cargoes CIF NWE, Basis ARA.

D. The conversion Factor 315.30 USG/Metric Ton will be used to calculate F76 escalators Gasoil 0.1%, 100% Cargoes CIF

NWE, Basis ARA, and Gasoil 0.1%S, 100 % FOB Med, Basis Italy.

E. Adjustment Factors. For evaluation purposes only, the following Adjustment Factors will be used when a product and the specified Base Price are identified in an offer:

PLATTS HEADING

PRODUCT

(ITEM NO.)

REFERENCE PRODUCT

(LOCATION)

ADJUSTMENT

FACTORS –

EVALUATION ONLY

$/USG

100% Cargoes CIF NWE Basis ARA F76 Gasoil 0.1 None

100% FOB Med Basis Italy F76 Gasoil 0.1S -0.015979 Asia/Singapore Cargo, FOB F76 Gasoil -0.037166

Arab Gulf, FOB F76 Gasoil -0.058550 FOB Med Cargo F76 ULSD 10ppmS -0.006227

Platt’s USGC Pipeline F76

ULSD/USGC

Inland East Gulf (IEG) Platt’s Oilgram

0.019839

100% Cargoes CIF NWE Basis ARA JP5 Jet Kerosene None

100% Cargoes CIF NWE Basis ARA JP8 Jet Kerosene None

100% FOB Med Basis Italy JP8 Jet Av. Fuel -0.028884 Asia/Singapore Subheading JP8 Jet Kerosene -0.028403

Arab Gulf, FOB JP8 Kerosene -0.048584

100% Cargoes CIF NWE Basis ARA JA1 Jet Kerosene None 100% FOB Med Basis Italy JA1 Jet Av. Fuel -0.028884 Asia/Singapore Subheading JA1 Jet Kerosene -0.028403

Arab Gulf, FOB JA1 Kerosene -0.048584