B.18 Mistake in offer B.19 Evaluation of offers B.20 Procedures for evaluation of offers B.21 Financial statements and other information B.22 Resolicitation procedures on unsold petroleum B.23 Offeror's certification of acceptance period B.24 Notification of Apparently Successful Offeror B.25 Contract documents B.26 Purchaser's representative B.27 Procedures for selling to other U.S. Government agencies SECTION C-SALES CONTRACT PROVISIONS C.1 Delivery of SPR petroleum C.2 Compliance with the "Jones Act" and C.5 Delivery and transportation scheduling C.6 Contract modification - alternate delivery line items C.7 Application procedures for "Jones Act" waivers C.8 Vessel loading procedures C.9 Vessel laytime and demurrage C.10 Purchaser liability for excessive berth time C.11 Pipeline delivery procedures C.14 Price adjustments for quality differentials for crude oil C.15 Determination of quality of petroleum C.16 Determination of quantity of petroleum C.17 Delivery documentation C.18 Contract amounts for crude oil C.20 Payment and performance letters of credit general requirements (a) Affiliate. The term affiliate means associated business concerns or individuals if, directly or indirectly, (1) either one controls or can control the other, or (2) a third party controls or can control both. (b) Business Day. The term business day means any day except Saturday, Sunday or a U.S. Government holiday. (c) Contract. The term contract means the contract under which DOE sells SPR petroleum. It is composed of the NS, the NA, the successful offer, and the SSPS incorporated by reference. (d) Contracting Officer. The term Contracting Officer means the person executing sales contracts on behalf of the Government, and any other Government employee properly designated as Contracting Officer. The term includes the authorized representative of a Contracting Officer acting within the limits of his authority. (e) Government. The term Government, unless otherwise indicated in the text, means the United States Government. (f) Head of the Contracting Activity. The term Head of the Contracting Activity means the Manager, Oak Ridge Operations Office, DOE. (g) Notice of Acceptance (NA). The term Notice of Acceptance means the document which is sent by DOE to accept the purchaser's offer to create a contract. (h) Notification of Apparently Successful Offeror (ASO). The term notification of apparently successful offeror means the notice, written or oral, by the Contracting Officer to an offeror that it will be awarded a contract if it is determined to be responsible. (1) Notice of Sale (NS). The term Notice of Sale means the document announcing the sale of SPR petroleum, the amount, characteristics and location of the petroleum being sold, the delivery period and the procedures for submitting offers. The NS will specify what contractual provisions and financial and performance responsibility measures are applicable to that particular sale of petroleum and provide other pertinent information. (See Exhibit B, Sample Notice of Sale) (j) Offeror. The term offeror means any person or entity (including a government agency) which submits an offer in response to a NS. (k) Petroleum. The term petroleum means crude oil, residual fuel oil, or any refined product (including any natural gas liquid, and any natural gas liquid product) owned or contracted for by DOE and in storage in any permanent SPR facility, temporarily stored in other storage facilities, or in transit to such facilities (including petroleum under contract but not yet delivered to a loading terminal). (1) Project Management Office (SPR/PMO). The term Project Management Office means the DOE personnel and DOE contractors located in Louisiana and Texas responsible for the operation of the SPR. (m) Purchaser. The term purchaser means any person or entity (including a government agency) which enters into a contract with DOE to purchase SPR petroleum. (n) Standard Sales Provisions (SSPs). The term Standard Sales Provisions means this set of terms and conditions of sale applicable to price competitive sales of SPR petroleum. These SSPs constitute the "standard sales agreement" referenced in the Strategic Petroleum Reserve "Drawdown" (Distribution) Plan, Amendment No. 4 (December 1, 1982, DOE/EP 0073) to the SPR Plan. (0) Strategic Petroleum Reserve (SPR). The term Strategic Petroleum Reserve means that DOE program established by Title I, part B of the Energy Policy and Conservation Act, 42 U.S.C. 6201, et seq. (p) Vessel. The term vessel means a tankship, an integrated tug barge (ITB) system, a self-propelled barge, or other barge. A.3 Standard Sales Provisions (a) These SSPs contain pre-sale information, sales solicitation provisions, and sales contract clauses setting forth terms and conditions of sale, including purchaser financial and performance responsibility measures, or descriptions thereof, which may be applica ble to price competitive sales of petroleum from the SPR in accordance with the SPR Sales Rule, 10 CFR part 625. The NS will specify which of these provisions shall apply to a particular sale of such petroleum, and it may specify any revisions therein and any additional provisions which shall be applicable to that sale. (See Exhibit B, Sample Notice of Sale) (b) All offerors must, as part of their offers for SPR petroleum in response to a NS, agree without exception to all provisions of the SSPs which the NS makes applicable to the particular sale. Offerors shall indicate their agreement by signing the Sales Offer Form (Exhibit A). The Government will not award a contract to an offeror which has failed to so agree. A.4 Periodic revisions of the Standard Sales Provisions DOE will review the SSPs periodically and republish them in the FEDERAL REGISTER, with any revisions. When a NS is issued, it will cite the FEDERAL REGISTER and the Code of Federal Regulations (if any) in which the latest version of the SSPS was published. Offerors are cautioned that the Code of Federal Regulations may not contain the latest version of the SSPS published in the FEDERAL REGISTER. Interested persons may obtain a copy of the current SSPS by writing to the address set forth in Provision No. A.5. A.5 Potential offerors list for sales of petroleum (a) The SPR/PMO will maintain a list of those potential offerors which wish to receive a NS whenever such a document is issued. In order to assure that prospective offerors will receive the NS or offer forms in timely fashion, all potential offerors are encouraged to submit the information in (d) as soon as possible. A NS may be issued with a week or less allowed for the receipt of offers. While DOE will use its best efforts to timely supply copies of the NS to persons not on the list who request the NS at the time an SPR petroleum sale is announced, this may not always be feasible in light of the short amount of time available before offers must be received. (b) Any firm or individual may send a written request to be on the list to the following address: U.S. Department of Energy, Strategic Petroleum Reserve, Project Management Office, Procurement and Sales Division, Mail Stop PR-651, 900 Commerce Road East, New Orleans, Louisiana 70123, Telephone Number (504) 734-4226. The envelope should be marked "SPR Sales Mailing List." (c) Copies of the SSPS and the NS, when one is issued, may also be obtained from this address. (d) A request to be placed on the mailing list should be in writing and should include the following information: Name of firm Mailing address (Street and P.O. Box) City, State, Zip Code Name of authorized agent and alternate authorized agent Telephone numbers for agent and alternate including area code Agent address, if different from firm represented TWX number/code Telecopier brand name and model number Whether telecopier is automatic or operator controlled Telephone number for telecopier transmission, including area code Telephone number for verification of message receipt, including area code Employer/taxpayer identification number or social security number Dun's number As DOE may use express mail which cannot be delivered to a Post Office Box, failure to provide a street address could result in untimely receipt of the NS and will be at the offeror's risk. A.6 Publicizing the Notice of Sale (a) The NS will be sent to names on the list of potential offerors referenced in Provision No. A.5. Interested persons may send a representative to the address in Provision No. A.5 to obtain a copy of the NS. (b) In addition to those on the list of potential offerors, the NS will also be sent to anyone requesting it when a sale is announced. Firms may request the NS by telephone or in writing to the telephone number or address in Provision No. A.5 above. (c) A DOE press release, which will include the salient features of the NS, will be made available to all news agencies. (d) At the option of the Contracting Officer, advertisements may be placed in publications likely to reach interested parties. The advertisements will contain the salient features of the NS and a name and telephone number at the SPR/PMO to call for further information. A.7 Penalty for false statements in offers to buy SPR petroleum A penalty for making false statements is imposed in the False Statements Act, 18 U.S.C. 1001, which provides: Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than years, or both. SECTION B-SALES SOLICITATION PROVISIONS B.1 Requirements for a valid offer - caution to offerors A valid offer to purchase SPR petroleum must meet the following conditions: (a) The offer guarantee (see Provision No. B.10) must be received no later than the time set for the receipt of offers; (b) The offer must include a completed Sales Offer Form (Exhibit A) and signed Standard Form 33 (Exhibit C) or other forms as specified in the NS; (c) The offer must be received no later than the time set for receipt of offers; (d) Any amendments to the NS which explicitly require acknowledgment of receipt must be properly acknowledged as provided for on Exhibit C; and (e) The offeror must agree without exception to all provisions of the SSPS which the NS makes applicable to a particular sale, as well as to all provisions in the NS. B.2 Certification of independent price (a) The offeror certifies that: (1) The prices in this offer have been arrived at independently, without, for the purposes of restricting competition, any consultation, communication, or agreement with any other offeror or competitor relating to: (1) those prices; (ii) the intention to submit an offer; or (iii) the methods or factors used to calculate the prices offered. (2) The prices in this offer have not been and will not be knowingly disclosed by the offeror, directly or indirectly, to any other offeror or to any competitor before the time set for receipt of offers, unless otherwise required by law; and (3) No attempt has been made or will be made by the offeror to induce any other concern to submit or not to submit an offer for the purpose of restricting competition. (b) Each signature on the offer is considered to be a certification by the signatory that the signatory: (1) Is the person within the offeror's organization responsible for determining the prices being offered, and that the signatory has not participated, and will not participate, in any action contrary to (a)(1) through (a)(3) above; or (2) (1) Has been authorized in writing to act as agent for the persons responsible for such decision in certifying that such persons have not participated, and will not participate, in any action contrary to (a)(1) through (a)(3) above; (ii) as their agent does hereby so certify; and (iii) as their agent has not participated, and will not participate, in any action contrary to (a)(1) through (a)(3) above. (c) An offer will not be considered for award where (a)(1), (a)(3), or (b) above has been deleted or modified. If the offeror de letes or modifies (a)(2) above, the offeror must furnish with the offer a signed statement setting forth in detail the circumstances of the disclosure. B.3 Requirements for vessels - caution to (a) The "Jones Act", 46 U.S.C. 883, prohibits the transportation of any merchandise, including SPR petroleum, by water or land and water, on penalty of forfeiture thereof, between points within the United States (including Puerto Rico, but excluding the Virgin islands) in vessels other than vessels built in and documented under laws of the United States, and owned by United States citizens, unless the prohibition has been waived by the Secretary of Treasury. Further, certain U.S.-flag vessels built with Construction Differential Subsidies (CDS) are precluded by section 506 of the Merchant Marine Act of of 1936 (46 U.S.C. 1156) from participating in U.S. coastwise trade, unless such prohibition has been waived by the Secretary of Transportation, the waiver being limited to a maximum of 6 months in any given year. CDS vessels may also receive Operating Differential Subsidies, requiring separate permission from the Secretary of Transportation for domestic operation, under section 805(a) of the same statute. The NS will advise offerors of any general waivers allowing use of non-coastwise qualified vessels or vessels built with Construction Differential Subsidies for a particular sale of SPR petroleum. If there is no general waiver, purchasers may request waivers in accordance with Provision No. C.7, but remain obligated to complete performance under this contract regardless of the outcome of that waiver process. (b) The Department of Transportation's interim rule concerning Reception Facility Requirements for Waste Materials Retained on Board (33 CFR parts 151 and 158) implements the reception facility requirements of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the 1978 Protocol relating thereto (MARPOL 73/78). This rule prohibits any oceangoing tankship, required to retain oil or oily mixtures on-board while at sea, from entering any port or terminal unless the port or terminal has a valid Certificate of Adequacy as to its oily waste reception facilities. SPR marine terminals (see Exhibit E, SPR Delivery Point Data) have Certificates of Adequacy and reception facilities for vessel sludge and oily bilge water wastes, all costs for which will be borne by the vessel. The terminals, however, may not have reception facilities for oily ballast. Accordingly, tankships without segregated ballast systems will be required to make arrangements for and be responsible for all costs associated with appropriate disposal of such ballast, or they will be denied permission to load SPR petroleum at terminals which lack reception facilities for oily ballast. (c) By submission of this offer, the offeror certifies that it will comply with the "Jones Act" and all applicable ballast disposal requirements. B.4 "Superfund” tax on SPR petroleum caution to offerors (a) Sections 4611 and 4612 of the Internal Revenue Code which imposed a tax on domestic and imported petroleum to support the Hazardous Substance Response Fund (the "Superfund") have been revised by the Superfund Amendments and Reauthorization Act of 1986, Public Law No. 99-499, and the Omnibus Budget Reconciliation Act of 1986, Public Law No. 99-509. As amended, these sections impose taxes to finance the Hazardous Substance Superfund and the Oil Spill Liability Trust Fund as of January 1, 1987 and February 1, 1987, respectively. (b) Section 4611 imposes a tax of 8.2 cents a barrel for domestic crude oil and 11.7 cents a barrel for foreign crude oil to support the "Superfund" on (1) crude oil received at a United States refinery and (2) petroleum products (including crude oil) entered into the United States for consumption, use or warehousing. In addition, section 4611 provides for a possible additional tax of 1.3 cents a barrel for both foreign and domestic oil to support the Oil Spill Liability Trust Fund. Section 4612 provides that no tax is imposed if it is established that a prior tax imposed by section 4611 has already been paid with respect to a barrel of oil. (c) DOE has already paid the "Superfund” taxes on some of the oil imported and stored in the SPR. However, no "Superfund" tax has been paid on imported oil stored prior to the effective dates of these Acts or domestic oil stored in the SPR, nor has tax been paid into the Oil Spill Liability Trust Fund for any oil. Because domestic and imported crude oil for which no tax has been paid and imported crude oils for which "Superfund" taxes have been paid at different rates have been commingled in the SPR, upon drawdown of the SPR, the NS will advise purchasers of the tax liability. B.5 Export limitations and licensing - caution to offerors (a) Offerors for SPR petroleum are put on notice that SPR crude oils subject to different export control laws have been commingled in storage. Export of SPR crude oil is subject to U.S. export control laws, the provisions of which differ depending on the source and destination of the crude oil proposed to be exported. For example, imported crude oil stored in the SPR may be exported pursuant to applicable Department of Commerce "Short Supply Controls," 15 CFR part 377, if: the export is part of a transaction resulting in the importation of refined products of a quantity and quality not less than would be derived from domestic refining; the products are to be sold at prices no higher than the lowest prices at which they could have been sold by the nearest capable U.S. refinery; and for compelling economic or technological reasons beyond the exporter's control, the crude oil cannot reasonably be processed in the U.S. (15 CFR 377.6(d)(1)(vii)). However, there are somewhat more stringent, independent statutory tests to be met as preconditions to the export of certain other crude oils stored in the SPR, including Alaskan North Slope (ANS) and Naval Petroleum Reserves (NPR) oil. See 7(d) of the Export Administration Act of 1979, 50 U.S.C App. 2406(d) (ANS oil) and 10 U.S.C. 7430(e) (NPR oil); see also 30 U.S.C. 185(u) (oil shipped across a Mineral Lands Leasing Act Section 28(u) right-of-way) and 43 U.S.C. 1354(a) (OCS oil). (b) By submission of this offer, the offeror certifies that it will comply with any applicable U.S. export control laws. B.6 Issuance of the Notice of Sale In the event petroleum is sold from the SPR, DOE will issue a NS containing all of the pertinent information necessary for the offeror to prepare a priced offer. A NS may be issued with a week or less allowed for the receipt of offers. Offerors are expected to examine the complete NS document, and to become familiar with the SSPS cited therein. Failure to do so will be at the offeror's risk. B.7 Submission of offers and modification of previously submitted offers (a) Unless otherwise provided in the NS, offers must be submitted to the SPR/PMO in New Orleans, Louisiana, by mail or hand-delivery. Direct cash deposits as offer guarantees will be sent by wire in accordance with Provision No. C.24. (b) Unless otherwise provided in the NS, offers may be modified or withdrawn by hand delivery, mail, telegram, or telex, provided that the hand delivery, mail, telegram, or telex is received at the designated office prior to the time specified for receipt of offers. FOR (c) Envelopes containing offers and any material related to offers shall be plainly marked on the outside; "RE: NS SALE OF PETROLEUM FROM STRATEGIC PETROLEUM RESERVE. OFFERS ARE DUE (insert time of opening), LOCAL NEW ORLEANS, LA TIME ON (insert date of opening). MAIL ROOM MUST MARK DATE AND TIME OF RECEIPT ON FACE OF THE ENVELOPE." Envelopes containing modified offers or any material related to supplements or modifications of offers, shall be plainly marked on the outside: "RE: NS |