+-----------+----------------------------------------------------------+
| ![](m     | Department of Energy                                     |
| edia/imag |                                                          |
| e1.wmf){w | Strategic Petroleum Reserve Project Management Office    |
| idth="1.0 |                                                          |
| 256944444 | 900 Commerce East                                        |
| 444445in" |                                                          |
| hei       | New Orleans, Louisiana 70123                             |
| ght="1.02 |                                                          |
| 638888888 |                                                          |
| 88888in"} |                                                          |
+-----------+----------------------------------------------------------+

###### July 26, 2002

Dear Prospective Offeror:

REQUEST DE-RP96-02PO54300 FOR EXCHANGE OF ROYALTY OIL

The Department of Energy (DOE) is soliciting offers for the exchange of
Royalty Oil produced from Federal offshore leases in the Gulf of Mexico
for Exchange Oil to be delivered to the Strategic Petroleum Reserve
(SPR). The delivery period of the Royalty Oil to be exchanged or
delivered directly into the SPR will be for a six-month period, with the
initial delivery commencing October 1, 2002. Deliveries of Exchange Oil
to the DOE will commence on or after October 1, 2002 and must be
completed by April 30, 2003. The Contractor will be required to take the
full contracted amount of Royalty Oil over the contracted delivery
period at the Market Center(s) specified in Exhibit A of this Request
for Offers (RFO). The Exchange Oil provided to the DOE must meet the DOE
crude oil specifications.

Under this solicitation the DOE will consider offers for the exchange of
up to 8 million barrels of Royalty Oil. The closing date for receipt of
offers is August 6, 2002, at 1100 hours (11:00 a.m.) local New Orleans,
LA time. Offers are to be addressed to:

ATTN: M. G. Waggoner, Room 100

Department of Energy SPRPMO

900 Commerce Road East

New Orleans, LA 70123

Offers may also be submitted by facsimile (see Paragraph B.4). Offerors
should use facsimile numbers: (504) 734-4947, (504) 734-4672, (504)
818-5444, or (504) 818-5776. Please refer to the enclosed instructions
for submitting offers under this solicitation. Offerors are also
requested to provide their Internet address.

The format for this solicitation is "negotiated," which allows the DOE
to discuss issues regarding price, proposed delivery period, quantity,
or any other provision of this solicitation. However, the DOE may award
a contract without discussions with Offerors. Therefore, each initial
offer should contain the Offeror's terms most advantageous to the DOE.

In order to encourage U.S.-flag offers, enclosed for your information is
a listing of companies which own and/or operate US flagged tankers.

Prospective Offeror 2

This solicitation does not commit the DOE to award contracts for
exchange of Royalty Oil. Offer preparation costs as a result of this
solicitation will not be borne by the DOE.

Thank you for your interest in the Strategic Petroleum Reserve. Should
you have questions regarding this solicitation, please contact Rose
Gaillard at (504) 734-4776, or the undersigned at (504) 734-4444.
RIK0003@spr.doe.gov is the E-mail address for submitting questions or
comments on this solicitation.

Sincerely,

![](media/image2.png){width="1.81875in" height="0.40694444444444444in"}

M. G. Waggoner

Contracting Officer

Enclosure

Enclosure

**[U. S. Carriers, Top Companies by Fleet Size]{.underline}**

  ------------------------ ------------------------ ----------------------------- -- ------------------------ ----------------------
  **[Company and           **[Point of              **[Telephone]{.underline}**      **[No. of                **[Fleet Size
  Address]{.underline}**   Contact]{.underline}**                                    Vessels]{.underline}**   (DWT)]{.underline}**

                                                                                                              

  Alaska Tanker Company,   Attn: Bruce Benn         \(503\) 207-0095                 13                       1,697,646
  LLC                                                                                                         

  15400 NW Greenbriar                                                                                         
  Parkway                                                                                                     

  Suite A400                                                                                                  

  Beaverton, OR 97006                                                                                         

                                                                                                              

  Polar Tankers,Inc.       Attn: Eric Rumley        \(562\) 388-1440                 6                        1,013,194

  300 Oceangate                                                                                               

  Long Beach, CA                                                                                              
  90802-4341                                                                                                  

                                                                                                              

  SeaRiver Maritime, Inc.  Attn: Robert McCormack   \(713\) 758-5218                 5                        811,855

  P.O. Box 1512                                                                                               

  Houston, TX 77251-1512                                                                                      

                                                                                                              

  Hess - Sheridan Group    Attn: Joe Gehegan        \(732\) 750-7110                 1                        46,000

  One Hess Plaza                                                                                              

  Woodbridge, NJ 07095                                                                                        

                                                                                                              

                                                                                                              

                                                                                                              

                                                                                                              

                                                                                                              

  Source: U.S. Maritime                                                                                       
  Administration                                                                                              
  ------------------------ ------------------------ ----------------------------- -- ------------------------ ----------------------

+--------------+-------------------------------------------------------+
| ![           | U.S. DEPARTMENT OF ENERGY                             |
| ](media/imag |                                                       |
| e1.wmf){widt | STRATEGIC PETROLEUM RESERVE                           |
| h="1.0256944 |                                                       |
| 444444445in" | PROJECT MANAGEMENT OFFICE                             |
| height       |                                                       |
| ="1.02638888 | NEW ORLEANS, LA                                       |
| 88888888in"} |                                                       |
+--------------+-------------------------------------------------------+

**REQUEST FOR OFFERS (RFO)**

**DE-RP96-02PO54300**

**REQUEST FOR OFFERS**

**FOR EXCHANGE OF**

**ROYALTY OIL**

#### TABLE OF CONTENTS

+----------------------------------------------------------------+-----+
| [**SECTION A -- SOLICITATION**](#A1Intro)                      | **  |
|                                                                | 4** |
+----------------------------------------------------------------+-----+
| > [A.1](#A1Intro) [Introduction](#A1Intro)                     | 4   |
+----------------------------------------------------------------+-----+
| > [A.2](#A2Description) [Description](#A2Description)          | 4   |
+----------------------------------------------------------------+-----+
| > [A.3](#A3Definitions) [Definitions](#A3Definitions)          | 5   |
+----------------------------------------------------------------+-----+
| > [A.4](#a.4-receipt-of-royalty-oil-at-the-market-center)      | 6   |
| > [Receipt of Royalty Oil at the Market                        |     |
| > Center](#a.4-receipt-of-royalty-oil-at-the-market-center)    |     |
+----------------------------------------------------------------+-----+
| > [A.5](#a.5-receipt-of-exchange-oil-at-the-doe-sites)         | 6   |
| > [Receipt of Exchange Oil at the DOE                          |     |
| > Sites](#a.5-receipt-of-exchange-oil-at-the-doe-sites)        |     |
+----------------------------------------------------------------+-----+
| > [A.6](#A5Inventory) [Inventory Close-out Reconciliation (if  | 8   |
| > applicable)](#A5Inventory)                                   |     |
+----------------------------------------------------------------+-----+
| > [A.7](#A6Adjustment) [Adjustment for Quality Differential    | 8   |
| > for Exchange Oil](#A8REQALTCOT)                              |     |
+----------------------------------------------------------------+-----+
| > [A.8](#A8REQALTCOT) [Request(s) for Alternate Crude Oil      | 9   |
| > Types for Delivery to SPR](#A8REQALTCOT)                     |     |
+----------------------------------------------------------------+-----+
| > [A.9](#A9NOEmerg) [National and Operational                  | 9   |
| > Emergencies](#A9NOEmerg)                                     |     |
+----------------------------------------------------------------+-----+
| [**SECTION B -- OFFERS**](#BOffers)                            | **  |
|                                                                | 9** |
+----------------------------------------------------------------+-----+
| > [B.1](#B1PrepSubm) [Preparation and Submission of            | 9   |
| > Offers](#B1PrepSubm)                                         |     |
+----------------------------------------------------------------+-----+
| > [B.2](#C2CustTranDXO) [Offer Guarantee](#C2CustTranDXO)      | 12  |
+----------------------------------------------------------------+-----+
| > [B.3](#B3LateSub) [Late Submissions, Modifications, and      | 13  |
| > Withdrawals of Offers](#B3LateSub)                           |     |
+----------------------------------------------------------------+-----+
| > [B.4](#B4Fax) [Facsimile Offers and Modifications](#B4Fax)   | 15  |
+----------------------------------------------------------------+-----+
| > [B.5](#B5Consider) [Consideration of Offers](#B5Consider)    | 16  |
+----------------------------------------------------------------+-----+
| > [B.6](#B6DetermResp) [Determination of                       | 16  |
| > Responsibility](#B6DetermResp)                               |     |
+----------------------------------------------------------------+-----+
| > [B.7](#B7EvalProced) [Evaluation Procedure for               | 16  |
| > Award](#B7EvalProced)                                        |     |
+----------------------------------------------------------------+-----+
| > [B.8](#B8ContrAward) [Contract Award](#B8ContrAward)         | 17  |
+----------------------------------------------------------------+-----+
| > [B.9](#B9LOC) [Performance Letter of Credit](#B9LOC)         | 17  |
+----------------------------------------------------------------+-----+
| [**SECTION C - QUALITY AND QUANTITY DETERMINATION/INSPECTION   | **1 |
| AND ACCEPTANCE**](#CQQDetermination)                           | 8** |
+----------------------------------------------------------------+-----+
| > [C.1](#C1CustodyTrans) [Custody Transfer of Royalty Oil      | 18  |
| > Received by the Contractor](#C1CustodyTrans)                 |     |
+----------------------------------------------------------------+-----+
| > [C.2](#C2CustTranDXO) [Custody Transfer Measurements for     | 18  |
| > Delivery of Exchange Oil to the DOE](#C2CustTranDXO)         |     |
+----------------------------------------------------------------+-----+
| > [C.3](#C3ExchOilQual) [Exchange Oil Quality                  | 19  |
| > Determination](#C3ExchOilQual)                               |     |
+----------------------------------------------------------------+-----+
| > [C.4](#C4EOQDeterm) [Exchange Oil Quantity                   | 20  |
| > Determination](#C4EOQDeterm)                                 |     |
+----------------------------------------------------------------+-----+
| > [C.5](#C5TitleCO) [Title to Crude Oil](#C5TitleCO)           | 21  |
+----------------------------------------------------------------+-----+
| [**SECTION D -- PAYMENT**](#DPayment)                          | **2 |
|                                                                | 1** |
+----------------------------------------------------------------+-----+
| > [D.1](#D1MethodPayment) [Method of                           | 21  |
| > Payments](#D1MethodPayment)                                  |     |
+----------------------------------------------------------------+-----+
| > [D.2](#D2MoneySettle) [Monetary Settlements](#D2MoneySettle) | 21  |
+----------------------------------------------------------------+-----+
| [**SECTION E -- FORCE MAJEURE**](#section-e-force-majeure)     | **2 |
|                                                                | 1** |
+----------------------------------------------------------------+-----+
|                                                                | 1   |
|                                                                | 696 |
+----------------------------------------------------------------+-----+
| [**SECTION F -- SHIPPING**](#FShipping)                        | **2 |
|                                                                | 2** |
+----------------------------------------------------------------+-----+
| > [F.1](#F1SchedulROM) [Scheduling of Royalty Oil              | 22  |
| > Movements](#F1SchedulROM)                                    |     |
+----------------------------------------------------------------+-----+
| > [F.2](#F2ScheduExOM) [Scheduling of Exchange Oil             | 22  |
| > Movements](#F2ScheduExOM)                                    |     |
+----------------------------------------------------------------+-----+
| > [F.3](#F3EnvComplia) [Environmental                          | 24  |
| > Compliance](#F3EnvComplia)                                   |     |
+----------------------------------------------------------------+-----+
| > [F.4](#F4DelRecDocRO) [Delivery and Receipt Documentation of | 24  |
| > Royalty Oil](#F4DelRecDocRO)                                 |     |
+----------------------------------------------------------------+-----+
| > [F.5](#F5DelRecDocEO) [Delivery and Receipt Documentation of | 24  |
| > Exchange Oil](#F5DelRecDocEO)                                |     |
+----------------------------------------------------------------+-----+

####  TABLE OF CONTENTS

(Continued)

+----------------------------------------------------------------+-----+
| [**SECTION G - CONTRACT ADMINISTRATION DATA AND                | **2 |
| PROVISIONS**](#GContAdmin)                                     | 5** |
+----------------------------------------------------------------+-----+
| > [G.1](#G1CorrProced) [DOE SPR Correspondence                 | 25  |
| > Procedures](#G1CorrProced)                                   |     |
+----------------------------------------------------------------+-----+
| > [G.2](#g2contspec) [Department of Energy Contract Specialist | 25  |
| > for Post Award Administration](#g2contspec)                  |     |
+----------------------------------------------------------------+-----+
| > [G.3](#G3ContOfficer) [Contracting Officer's Representative  | 26  |
| > for Post Award Administration](#G3ContOfficer)               |     |
+----------------------------------------------------------------+-----+
| > [G.4](#G4Default) [Default](#G4Default)                      | 26  |
+----------------------------------------------------------------+-----+
| > [G.5](#G5Disputes) [Disputes](#G5Disputes)                   | 26  |
+----------------------------------------------------------------+-----+
| > [G.6](#G6Termination) [Termination for the Convenience of    | 28  |
| > the Government](#G6Termination)                              |     |
+----------------------------------------------------------------+-----+
| > [G.7](#G7ExcuseDelay) [Excusable Delays](#G7ExcuseDelay)     | 28  |
+----------------------------------------------------------------+-----+
| > [G.8](#G8Mod) [Modification](#G8Mod)                         | 28  |
+----------------------------------------------------------------+-----+
| > [G.9](#G9Covenant) [Covenant Against Contingent              | 28  |
| > Fees](#G9Covenant)                                           |     |
+----------------------------------------------------------------+-----+
| > [G.10](#G10Assign) [Assignment](#G10Assign)                  | 29  |
+----------------------------------------------------------------+-----+
| > [G.11](#G11OfficialsNTB) [Officials Not to                   | 29  |
| > Benefit](#G11OfficialsNTB)                                   |     |
+----------------------------------------------------------------+-----+
| > [G.12](#G12Gratuities) [Gratuities](#G12Gratuities)          | 29  |
+----------------------------------------------------------------+-----+
| > [G.13](#G13Notation) [Novation Agreement](#G13Notation)      | 30  |
+----------------------------------------------------------------+-----+
| [**SECTION H -- CERTIFICATIONS**](#HCertifications)            | 31  |
+----------------------------------------------------------------+-----+
| > [H.1](#H1CertofIndep) [Certificate of Independent Value      | 31  |
| > Determination](#H1CertofIndep)                               |     |
+----------------------------------------------------------------+-----+
| > [H.2](#H2ContingFee) [Contingent Fee Representation and      | 32  |
| > Agreement](#H2ContingFee)                                    |     |
+----------------------------------------------------------------+-----+
| > [H.3](#H3CertDebar) [Certification Regarding Debarment,      | 32  |
| > Suspension, Proposed Debarment, and Other Responsibility     |     |
| > Matters](#H3CertDebar)                                       |     |
+----------------------------------------------------------------+-----+
| > [H.4](#H4LOCInfo) [Letter of Credit Information](#H4LOCInfo) | 34  |
+----------------------------------------------------------------+-----+
| > [H.5](#H5BusStatCert) [Business Status                       | 34  |
| > Certification](#H5BusStatCert)                               |     |
+----------------------------------------------------------------+-----+
| [**SECTION I -- EXHIBITS**](#IExhibits)                        | **3 |
|                                                                | 5** |
+----------------------------------------------------------------+-----+
| > [I.1](#IExhibA) [Exhibit A - Market Center                   | 36  |
| > Information](#IExhibA)                                       |     |
+----------------------------------------------------------------+-----+
| > [I.2](#IExhibitB) [Exhibit B - Offer Form](#IExhibitB)       | 37  |
+----------------------------------------------------------------+-----+
| > [I.3](#IExhibC) [Exhibit C - Exchange Oil Delivery Location  | 38  |
| > Information](#IExhibC)                                       |     |
+----------------------------------------------------------------+-----+
| > [I.4](#IExhibitD1) [Exhibit D-1 - Sample Material Inspection | 42  |
| > and Receiving Report](#IExhibitD1)                           |     |
+----------------------------------------------------------------+-----+
| > [Exhibit D-2 - Sample Tanker Barge Material Inspection and   | 43  |
| > Receiving Report](#iexhibitd2)                               |     |
+----------------------------------------------------------------+-----+
| > [I.5](#IExhibitE) [Exhibit E - Contract Form](#IExhibitE)    | 44  |
+----------------------------------------------------------------+-----+
| > [I.6](#iexhibitf) [Exhibit F - DOE Crude Oil                 | 45  |
| > Specifications](#iexhibitf)                                  |     |
+----------------------------------------------------------------+-----+
| > [I.7](#IExhibitG) [Exhibit G - Sample -- Offer Guarantee     | 46  |
| > Irrevocable Standby Letter of Credit](#IExhibitG)            |     |
+----------------------------------------------------------------+-----+
| > [I.8](#IExhibitH) [Exhibit H - Sample -- Performance         | 48  |
| > Irrevocable Standby Letter\                                  |     |
| > of Credit](#IExhibitH)                                       |     |
+----------------------------------------------------------------+-----+
| > [I.9](#IExhibitI) [Exhibit I - Diagrams of DOE               | 50  |
| > Facilities](#IExhibitI)                                      |     |
+----------------------------------------------------------------+-----+
| > [I.10](#IExhibitJ) [Exhibit J - Sample -- Novation           | 51  |
| > Agreement](#IExhibitJ)                                       |     |
+----------------------------------------------------------------+-----+
| > [I.11](#IExhibitK) [Exhibit K - Cargo Preference             | 54  |
| > Act](#IExhibitK)                                             |     |
+----------------------------------------------------------------+-----+

**[SECTION A - SOLICITATION]{.underline}**

[]{#A1Intro .anchor}A.1 [Introduction]{.underline}

a\. The Department of Energy (DOE), Strategic Petroleum Reserve Project
Management Office (SPRPMO) is soliciting written offers for the exchange
of up to 8 million barrels of Royalty Oil produced from Federal offshore
leases in the Gulf of Mexico for Exchange Oil to be delivered to the
DOE. Offers will be accepted on a competitive basis. The closing date
for receipt of offers is August 6, 2002, at 1100 hours (11:00 a.m.)
local New Orleans, LA time. Offerors have the flexibility in structuring
the offer to provide the DOE with domestic and/or foreign crude oil.

b\. The Royalty Oil available to the Contractor will be from the Market
Center(s) described in Exhibit A.

c\. The Exchange Oil delivered to the DOE shall meet the specifications
in Exhibit F. Acceptance of any Exchange Oil offered for delivery will
be subject to the Contracting Officer's approval. Gravity and sulfur
differentials will be used to determine quality adjustments for any
Exchange Oil delivered which varies from the quality specifications of
the Exchange Oil contracted.

d\. The minimum offer quantity of Royalty Oil to be exchanged over the
contract period is three million barrels.

e\. Final reconciliation of contract amounts at the end of the contract
period may require monetary reimbursement due to insignificant
quantities.

f.  Royalty Oil deliveries to the Contractor will commence October
    1, 2002. The Royalty Oil delivery period will be for a term of six
    months ending March 31, 2003. The Contractor's Exchange Oil
    deliveries to the DOE may begin October 1, 2002, and shall be
    completed no later than April 30, 2003.

g\. The DOE does not warrant the quantities or qualities of the streams
at the Market Center(s) described in Exhibit A.

> h\. The contractor may be required to provide assay data for the
> Exchange Oil being offered for delivery under this contract.

[]{#A2Description .anchor}A.2 [Description]{.underline}

Delivery of the Exchange Oil can be made to two DOE sites (Big Hill or
West Hackberry). See Exhibits C and I.

a\. The Big Hill site is connected via a 36-inch pipeline from the Sun
Partners Marketing & Terminals LP (Sun) and Union Oil Company of
California (UNOCAL) terminals and a pipeline connection from Shell
Pipeline Company LP (20-inch pipeline).

b\. The West Hackberry site is connected via a 42-inch pipeline from the
Sun Terminal and by a 36-inch pipeline from Shell Pipeline Company LP
22-inch pipeline at Lake Charles.

[]{#A3Definitions .anchor}A.3 [Definitions]{.underline}

As used throughout this solicitation, the following terms shall have the
meaning set forth below:

a\. "Royalty Oil" means that portion of crude oil to which the
Government is entitled as the royalty percentage of the production from
Federal leases and which is made available at the Market Center(s).

b\. Exchange Oil means that crude oil (domestic or foreign) which is
being provided to the U.S. Department of Energy Strategic Petroleum
Reserve in exchange for the Royalty Oil received from the Government.
Note: Royalty Oil which meets SPR specifications may be provided
directly to the SPR as Exchange Oil.

c\. "Government", unless otherwise indicated in the text, means the
United States Government.

d\. "Strategic Petroleum Reserve" (SPR) means that DOE program
established by Title I, Part B, of the Energy Policy and Conservation
Act, 42 U.S.C. Section 6201, et seq.

e\. "Contracting Officer" means a person with the authority to enter
into, administer, and/or terminate contracts and make related
determinations and findings on behalf of the Government.

f\. "DOE" means the U.S. Department of Energy.

g.  "Offeror" or "Contractor" herein means individuals, corporations,
    partnerships, or governmental entities making written offers under
    this RFO.

h\. "SPRPMO" means the Strategic Petroleum Reserve Project Management
Office.

i\. "API" means the American Petroleum Institute.

j\. "Barrel" means 42 U.S. gallons or 231 cubic inches per gallon
corrected to 60 degrees Fahrenheit.

k\. "Crude Oil" means a mixture of hydrocarbons that existed in the
liquid phase in natural underground reservoirs and remains liquid at
atmospheric pressure after passing through surface separating facilities
and is marketed or used as such.

l\. "Force Majeure" means a failure to perform under the contract due to
factors beyond the control of either party, as further defined in
Section E.

m\. "Irrevocable Standby Letter of Credit" means a written commitment
(by a depository institution located in and authorized to do business in
any state of the United States or the District of Columbia, and
authorized to issue letters of credit by the banking laws of the United
States or any state of the United States or the District of Columbia) to
pay all or part of a stated amount of money until the expiration date of
the letter or upon presentation by the Contracting Officer (the
beneficiary) of a written demand therefor. Neither the financial
institution nor the Offeror/Contractor can revoke or condition the
Letter of Credit.

n.  "Market Center" means the location at which the royalty oil is
    transferred from the DOE to the Contractor.

# A.4 [Receipt of Royalty Oil at the Market Center]{.underline}

> All costs associated with the receipt of Royalty Oil at the Market
> Center will be absorbed by the Contractor, to include, but not be
> limited to, tariffs, intermediate storage, "pump out" and throughput
> charges. Any costs associated with oil accountability standard
> industry practice documentation will also be absorbed by the
> contractor.

# A.5 [Receipt of Exchange Oil at the DOE Sites]{.underline}

a\. Maximum receipt capabilities of Exchange Oil at the DOE sites are as
follows

Note: Receipt capabilities may decline as SPR caverns are filled.

Big Hill 225,000 barrels per day

West Hackberry 225,000 barrels per day

b\. All costs associated with the transportation of the Exchange Oil to
the point at which title is transferred to the DOE will be absorbed by
the Contractor, to include but not be limited to, tariffs, marine
shipment, pipeline shipment, U.S. Customs duties, harbor and
environmental fees (including Texas Coastal protection fees),
terminalling and tankage charges. There are exceptions for Exchange Oil
being delivered to the Big Hill DOE site. Terminalling costs (tankage)
at Sun Terminal for deliveries to Big Hill will be for the DOE account.
[Offerors should not include these costs in their offer(s) for
applicable Big Hill deliveries.]{.underline}

c\. Within 30 days after contract award, the Contractor shall submit a
ratable schedule, for the DOE Contracting Officer's approval, providing
the volume of Exchange Oil to be delivered each month to each DOE
delivery location. The ratable delivery schedule may allow for economic
delivery-size marine cargos and/or commercial pipeline batch shipments
(not less than 50,000 barrels per batch), to be spaced within the
constraints of the DOE site receipt capabilities. The DOE must approve
subsequent changes to the original schedule.

d.  If the Contractor fails to deliver 90 percent of the original
    scheduled volume in any month (see A.5.c.), the under-delivered
    amount below the 90 percent threshold will incur interest payable in
    oil to the DOE. Interest shall be computed on a daily basis. The
    interest rate shall be in accordance with the Current Value of Funds
    rate as established by the Department of the Treasury in accordance
    with the Debt Collection Act of 1982 and published periodically in
    the Bulletins to the Treasury Fiscal Requirements Manual and in the
    Federal Register. The amount of interest will be determined by the
    value of the oil from the end of the month the oil was
    under-delivered until the cumulative amount of delivered oil
    achieves 90 percent of the cumulative scheduled amount through the
    current month or the end of the Exchange Oil delivery period,
    whichever occurs first. The interest owed to the DOE shall be made
    in the form of crude oil meeting the specifications in Exhibit F.
    However, if this is not operationally feasible due to insufficient
    quantities to comprise a normal oil delivery, the DOE may invoice
    the Contractor in accordance with the cost value derived from data
    published in Platt's Oilgram Price Report.

e\. The availability of storage capacity and delivery periods for
Exchange Oil at the DOE sites is as follows:

[Volume (000,000 Barrels)]{.underline} [Delivery Period]{.underline}

[Sweet]{.underline} [Sour]{.underline}

Big Hill 48.3 19.6 10/02-- 04/03\*

West Hackberry 11.5 16.7 10/02- 04/03\*

\*Excluding January 2003

f\. While the SPR can receive the site delivery volumes as stated in
paragraph A.5.a, offerors are cautioned that, due to commercial volumes
at the terminals/pipelines, delivery timeframes may be restricted.
Offerors are responsible for ensuring that deliveries to the SPR can be
accommodated through the applicable commercial terminals/pipelines and
the SPR site(s).

[]{#A5Inventory .anchor}A.6 [Inventory Close-out Reconciliation (if
applicable)]{.underline}

After completion of the final scheduled delivery of Exchange Oil under
the contract, imbalances may exist in the crude oil volumes agreed upon
in the contract. These imbalances will be reconciled in the following
manner:

a.  If the DOE receives an amount of Exchange Oil that exceeds the
    contracted Exchange Oil delivery volume, the Government will
    continue to make Royalty Oil available to the Contractor until the
    additional contract volumes, based on the March 2003 exchange
    ratio(s), are completed. However, if this is not feasible due to
    insufficient quantities, the Contractor may invoice the DOE based on
    the cost value of the Exchange Oil on the date of the last delivery
    or cost value of the Royalty Oil at the end of the contracted
    delivery period, whichever is lowest.

> Note: The cost value is derived from the data published in the Platt's
> Oilgram Price Report. If no published prices are available, a mutually
> agreed upon price will be negotiated. Should the parties fail to reach
> a negotiated price, the Government shall determine a fair and
> reasonable price subject to Provision G.5 entitled "Disputes".

b\. If the Contractor delivers a total volume of Exchange Oil which is
less than the contracted quantity, the DOE will invoice the Contractor
for the undelivered amount based on the cost value of the Exchange Oil
on the date of the last delivery as annotated on the DD250 or cost value
of the Royalty Oil at the end of the contracted delivery period,
whichever is highest. If no payment is received by the due date
specified on the invoice, the applicable amount owed will be drawn
against the Contractor's Letter of Credit. (See Note in Paragraph A.6.a.
above)

# 

[]{#A6Adjustment .anchor}A.7 [Adjustment for Quality Differential for
Exchange Oil]{.underline}

a\. A quality differential shall be computed for each cargo of Exchange
Oil delivered to the DOE as compared to the contracted quality
specifications (American Petroleum Institute (API) Gravity and Sulfur
mass percent listed in Exhibit E) of the Exchange Oil to be delivered.

b\. Laboratory tests for API Gravity and Sulfur mass percent, in
accordance with tests methods listed in Exhibit F, shall be taken when
custody of the Exchange Oil is passed to the DOE.

Note: The quality differential adjustments for the Exchange Crude Oil
delivered by the Contractor to the DOE will only apply in those
instances wherein the quality of the crude oil being returned to the
Government is below that which was listed in the Contractor's offer of
Exchange Crude Oil to be delivered to the Government. Specifically, the
Government shall not be liable for any quality increase of the
Contractor's Exchange Oil that is above the crude oil quality
specifications listed in the contract for the Contractor's return of
Exchange Oil.

c\. The allowable variations from the contracted quality are as follows:

Quality

[Characteristics]{.underline} [Sour]{.underline} [Sweet]{.underline}

API° Gravity - 0.5 - 0.5

Sulfur - Mass, % + 0.20 + 0.10

d\. Where practicable, so as to avoid monetary adjustments, the quality
adjustments shall be paid in crude oil based on the following rates:

\(1\) API Gravity: Adjustment for Sour Crude oil is 1.5¢ per barrel for
each 1/10^th^ degree (0.1°) decrease in API Gravity by which the
allowable variations set forth above is exceeded. Adjustment for Sweet
crude oil is 2¢ per barrel for each degree (1.0°) decrease in (API)
Gravity, or part thereof, by which the allowable variations set forth
above is exceeded.

\(2\) Total Sulfur: 1.0¢ per barrel for each 1/100^th^ percent (0.01%)
increase in total sulfur by which the allowable variations set forth
above are exceeded.

[]{#A8REQALTCOT .anchor}A.8 [Request(s) for Alternate Crude Oil Types
for Delivery to SPR]{.underline}

After award, if the contractor offers a crude oil which is not in its
contract, the Government will evaluate the offer to determine whether
the current price of the crude exceeds the current contracted value of
crude oil (or if a basket of crudes is in the contract whether the
offered crude oil value exceeds the minimum crude oil price of the
lowest crude in the basket). If the crude oil price offered equals or
exceeds the contracted oil price (or the contractor agrees to pay the
price differential to match the current lowest crude price in the
contract) and meets the specifications listed in Exhibit F, it will be
accepted. This evaluation will be done on a case-by-case basis for each
cargo tendered for delivery and will not be added automatically to the
basket of contracted crude oils (or single crude) in the contract for
future deliveries.

[]{#A9NOEmerg .anchor}A.9 [National and Operational
Emergencies]{.underline}

Exchange Oil deliveries to the DOE may be suspended or redirected upon
the determination of a national or DOE operational emergency.

[]{#BOffers .anchor}**[SECTION B ‑ OFFERS]{.underline}**

[]{#B1PrepSubm .anchor}B.1 [Preparation and Submission of
Offers]{.underline}

a\. Offerors may telephone the Contracting Officer at (504) 734-4444
prior to the submission of an offer to clarify issues regarding this
crude oil exchange initiative.

b\. For each line item in Exhibit A for which the Offeror submits an
offer, the offer may be for all or part of the Royalty Oil advertised
but must be for the entire period of this contract. All offers shall be
submitted on the form provided at Exhibit B. For each line item in
Exhibit A for which the Offeror submits an offer, the following
information shall be provided on Exhibit B: (1) Royalty Oil Market
Center/Oil Type, (2) Royalty Oil barrels per day, (3) Royalty Oil total
contract volume, (4) Exchange Oil crude oil type, (5) the "Y" constant
as described below, (6) Exchange Oil API Gravity, (7) Exchange Oil
sulfur % weight, (8) Exchange Oil delivery mode/location and (9) DOE
sites.

For purposes of offer evaluation, the monthly quantity of Exchange Oil
shall be based on the following formula, (A/B) x (monthly quantity of
Royalty Oil), where:

"A" is the value (\$/bbl) of the Royalty Oil at the Market Center where:

Such value is determined as the average of the daily high and low spot
quotes (to the \$0.001) as published in Platt's Oilgram Price Report for
crude oil for the period May 26, 2002 through June 25, 2002, inclusive;
and

"B" is the value of the Exchange Oil (\$/bbl) at the SPR delivery point
as expressed by the formula (WTI + Y), where:

"WTI" is the average of the daily high and low daily spot quotes (to the
\$0.001) for West Texas Intermediate as published in Platt's Oilgram
Price Report for the period May 26, 2002 through June 25, 2002,
inclusive; and

["Y" is a constant specified by the Offeror on Exhibit B]{.underline}
(to the \$0.001) to represent factors, including but not limited to
location, quality, and market factors. If a basket is offered one "y"
value shall be provided per basket.

The ratio A/B will be computed to three decimal places (0.001).

**EXAMPLE**

**Assume monthly LLS Royalty Oil production is 4800 bbls**

**LLS = \$25.435**

**WTI = \$25.260**

**Y = \$1.572**

**A/B = (LLS)/(WTI + Y)**

**A/B = (\$25.435)/(\$25.260 + \$1.572)**

**A/B = \$25.435/\$26.832**

**A/B = 0.948**

**0.948 x 4800 bbls = 4550 bbls of Oil for delivery to the SPR**

For each month beginning with October 2002, a new ratio will be
determined based on the values of WTI and the Market Center crude
effective for the period beginning on the 26^th^ day of the second month
prior to and ending on the 25^th^ day of the month preceding the month
of delivery. This ratio multiplied by the volume of Royalty Oil received
will provide the amount of Exchange Oil due for that month.

To more accurately reflect only those dates on which trading activity
occurred, no weekends or holidays will be used in the computation.

For the purposes of the example above, the following price effective
dates for May 26 through June 25, 2002 were used:

May 28, 29, 30, 31

June 3, 4, 5, 6, 7, 10, 11, 12, 13, 14, 17, 18, 19, 20, 21, 24, 25

The calculated prices for this period were:

LLS = \$25.435

WTI = \$25.260

c\. Each Offeror shall complete and furnish Section H ‑ Certifications
along with its offer. Additionally, each Offeror shall sign and return a
blank Exhibit E - Contract Form. The DOE will complete Exhibit E with
the awarded line item(s) unless otherwise specified by the Offeror (i.e.
"all or none").

d\. Offers and modifications submitted by mail or hand delivered shall
be enclosed in a sealed envelope and addressed to:

ATTN: M. G. Waggoner, FE-4451, Room 100

U.S. Department of Energy

Strategic Petroleum Reserve Project Management Office

900 Commerce Road East

New Orleans, LA 70123

e\. Place the name and address of the Offeror in the upper left corner
and the following information in the lower left corner on the face of
the envelope: Solicitation of Offers: DE-RP96-02PO54300.

f.  Offerors may submit facsimile offers under this solicitation.
    Facsimile offers shall arrive at the place, and by the time,
    specified in the solicitation. This means the submission of a faxed
    offer must be [completely]{.underline} received by the time set for
    closing to be considered timely (see Paragraph B.4). Offerors should
    use facsimile numbers: (504) 734-4947, (504) 734-4672, (504)
    818-5444, or (504) 818-5776.

 

g.  By the submission of an offer, the Offeror agrees to be bound by the
    terms and conditions of this solicitation.

h.  All offers in response to this solicitation and all modifications of
    offers shall be in the English language. All correspondence between
    Offerors and DOE shall be in the English language.

i.  An offer must remain firm for 72 hours from official time for
    receipt of offers unless otherwise indicated on the offer form at
    Exhibit B.

B.2 [Offer Guarantee]{.underline}

a\. Each offeror must submit an acceptable offer guarantee for each
offer submitted. Each offer guarantee must be received at the place and
time specified for receipt of offers no later than the time and date set
for receipt of offers.

b\. An offeror's failure to submit a timely acceptable guarantee will
result in rejection of its offer.

c\. The amount of each offer guarantee is \$3 million or 5 percent of
the maximum potential contract amount, whichever is less. The maximum
potential contract amount is calculated by multiplying the total amount
of barrels by the average of the quotes for WTI as published in Platt's
Oilgram Price Report for the period July 29, 2002 through August 2,
2002.

d\. Each offeror must submit an irrevocable standby letter of credit
from a U.S. depository institution containing the substantive provisions
set out in Exhibit G, Offer Standby Letter of Credit, all letter of
credit costs to be borne by the offeror. If the letter of credit
contains any provisions at variance with Exhibit G or fails to include
any provisions contained in Exhibit G, nonconforming provisions must be
deleted and missing substantive provisions must be added or the letter
of credit will not be accepted. The depository institution must be
located in and authorized to do business in any state of the United
States or the District of Columbia, and authorized to issue letters of
credit by the banking laws of the United States or any state of the
United States or the District of Columbia. The original letter of credit
must be sent to the Contracting Officer. The issuing bank must provide
documentation indicating that the person signing the letter of credit is
authorized to do so, in the form of corporate minutes, the Authorized
Signature List, or the General Resolution of Signature Authority.

e\. If the offeror or bank forwards the letter of credit separately from
the offer, the envelope shall clearly be marked "Offer Standby Letter of
Credit (Name of Company)" and also marked in accordance with Provisions
B.1.d and e. Offerors are cautioned that if they provide more than one
Offer Standby Letter of Credit for multiple offers and, due to the
absence of clear information from the offeror, the Government is unable
to identify which Letter of Credit applies to which offer, the
Contracting Officer in his sole discretion may assign the Letters of
Credit to specific offers.

f\. The offeror shall be liable for any amount lost by DOE due to the
difference between the offer and exchange quantities received on a
subsequent solicitation, and for any additional costs incurred by the
DOE in the event that the offeror:

\(1\) Withdraws its offer after having agreed to extend its acceptance
period; or

\(2\) Having received a notification of award, fails to furnish an
acceptable performance standby letter of credit (see Provision B.9)
within the time limit specified by the Contracting Officer.

> The offer guarantee shall be used toward offsetting such price
> difference or additional re-exchange costs. Use of the offer guarantee
> for such recovery shall not preclude recovery by DOE of damages in
> excess of the amount of the offer guarantee caused by such failure of
> the offeror.
>
> g\. Letters of Credit furnished as offer guarantees must be valid for
> at least 30 calendar days after the date set for the receipt of
> offers.
>
> h\. If offer(s) are not accepted, the Letters of Credit will be
> returned upon request.
>
> i\. If an offeror defaults on its offer, DOE will hold the offer
> guarantee so that damages can be assessed against it.

[]{#B3LateSub .anchor}B.3 [Late Submissions, Modifications, and
Withdrawals of Offers]{.underline}

a\. Any offer received at the office designated in the solicitation
after the exact time specified for receipt shall not be considered
unless it is received before award is made and it:

\(1\) Was sent by registered or certified mail not later then the fifth
(5^th^) calendar day before the day specified for receipt of offers
(e.g., an offer submitted in response to a solicitation requiring
receipt of offers by the tenth (10^th^) of the month shall have been
mailed by the fifth (5^th^)); or

\(2\) Was sent by mail and it is determined by the Government that the
late receipt was due solely to mishandling by the Government after
receipt at the Government installation; or

\(3\) Was sent by U.S. Postal Service Express Mail Next Day Service-Post
Office to Addressee, not later than 5:00 p.m. at the place of mailing
two working days prior to the date specified for receipt of proposals.
The term working days excludes weekends and U.S. Federal holidays; or

\(4\) Is the only offer received.

b\. Any modification of an offer, except a modification resulting from
the Contracting Officer's request for "best and final" offer, is subject
to the same conditions as in Subparagraphs B.3(a.)(1), (2), and (3) of
this provision.

c\. A modification resulting from the Contracting Officer's request for
best and final offer received after the time and date specified in the
request shall not be considered unless received before award and the
late receipt is due solely to mishandling by the Government after
receipt at the Government installation.

d\. The only acceptable evidence to establish the date of mailing of a
late offer or modification sent either by registered or certified mail
is the U.S. or Canadian Postal Service postmark both on the envelope or
wrapper and on the original receipt from the U.S. or Canadian Postal
Service. Both postmarks shall show a legible date of the offer or
modification shall be processed as if mailed late. Postmark means a
printed, stamped, or otherwise placed impression (exclusive of a postage
meter machine impression) that is readily identifiable without further
action as having been supplied and affixed by employees of the U.S. or
Canadian Postal Service on the date of mailing. Therefore, Offerors
should request the postal clerk to place a legible hand cancellation
bull's eye postmark on both the receipt and the envelope or wrapper.

e\. The only acceptable evidence to establish the time of receipt at the
Government installation is the time/date stamp of that installation on
the proposal wrapper or other documentary evidence of receipt maintained
by the installation.

f\. The only acceptable evidence to establish the date of mailing of a
late offer, modification, or withdrawal sent by Express Mail Next Day
Service‑Post Office to Addressee is the date entered by the Post Office
receiving clerk on the "Express Mail Next Day Service‑Post Office to
Addressee" label and the postmark on both the envelope or wrapper and on
the original receipt from the U.S. Postal Service. "Postmark" has the
same meaning as defined in Paragraph (d) of this provision, excluding
postmarks of the Canadian Postal Service. Therefore, Offerors should
request the postal clerk to place a legible hand cancellation bull's eye
postmark on both the receipt and the envelope or wrapper.

g\. Notwithstanding Paragraph B.3.(a) of this provision, a late
modification of an otherwise successful offer that makes its terms more
favorable to the Government shall be considered at any time it is
received and may be accepted.

[]{#B4Fax .anchor}B.4 [Facsimile Offers and Modifications]{.underline}

a\. Definition: "Facsimile offer/modification," as used in this
solicitation, means an offer, a modification of an offer, or withdrawal
of an offer that is transmitted to and received by the Government via
electronic equipment that communicates and reproduces both printed and
handwritten material.

b\. Offerors may submit facsimile offers under this solicitation.
Facsimile offers shall arrive at the place, and by the time, specified
in the solicitation. This means the submission of a faxed offer must be
[completely]{.underline} received by the time set for closing to be
considered timely. Offerors should use facsimile numbers: (504)
734-4947, (504) 734-4672, (504) 818-5444, or (504) 818-5776.

c\. Facsimile offers/modifications that reject any of the terms,
conditions, and provisions of this solicitation, are otherwise
incomplete, or contain garbled information may be excluded from
consideration.

d\. Facsimile offers/modifications shall contain the required
signatures.

e\. If requested to do so by the Contracting Officer, the Offeror agrees
to promptly submit the complete original signed offer/modification.

f\. If the Offeror chooses to transmit a facsimile offer/modification,
the Government shall not be responsible for any failure attributable to
the transmission or receipt of the facsimile offer/modification,
including, but not limited to, the following:

\(1\) Receipt of garbled or incomplete offer/modification.

\(2\) Availability or condition of the receiving facsimile equipment.

\(3\) Incompatibility between the sending and receiving equipment.

\(4\) Delay in transmission or receipt of the offer/modification.

\(5\) Failure of the Offeror to properly identify the
offer/modification.

\(6\) Illegibility of offer/modification.

\(7\) Security of the data contained in the offer/modification.

[]{#B5Consider .anchor}B.5 [Consideration of Offers]{.underline}

a\. The DOE shall award contract(s) resulting from this solicitation to
those responsible Offeror(s) whose offer(s) conforming to the
solicitation shall in the DOE's judgment be most advantageous to the
Government.

b\. The DOE reserves the right to reject any or all offers, to waive any
informalities and minor irregularities in an offer, and unless otherwise
specified by the Offeror, to accept any one item or group of items in an
offer, as may be in the best interest of the DOE.

c\. The DOE may award a contract on the basis of initial offer(s)
received, without discussions. Accordingly, each initial offer should be
submitted on the most favorable terms. However, the DOE reserves the
right to conduct discussions with any Offeror if it is later determined
by the Contracting Officer to be necessary. In the event the DOE
requests best and final offers, a date and time for receipt of such
offers shall be set forth in the request. Any best and final offers
received after the time and date specified for the receipt of best and
final offers shall not be considered unless they are received before
award and the late receipt is due solely to mishandling by the
Government after receipt at the Government installation.

d\. The DOE reserves the right to award a contract for a quantity of
Royalty Oil that is less than the quantity requested unless the Offeror
specifies otherwise in the offer. (Ref B.1.b.)

[]{#B6DetermResp .anchor}B.6 [Determination of
Responsibility]{.underline}

Offeror(s) shall furnish sufficient information for the Contracting
Officer to make a determination of responsibility. At a minimum,
offerors shall furnish enough data for the Contracting Officer to
determine adequate financial capability. (See Provision H.4).

[]{#B7EvalProced .anchor}B.7 [Evaluation Procedure for
Award]{.underline}

a\. Offers shall be evaluated based on the best value offered to the
DOE. Evaluation of the offers shall consider the Exchange Oil quality,
the ratio of Exchange Oil provided to the DOE in relation to the Royalty
Oil provided to the Contractor, and the market value of the crude oils.
If offers for multiple ("basket") crudes are received, the lowest valued
crude oil within that basket will be used for evaluation purposes. Note:
If a basket is offered, one "y" value shall be provided per basket.

b\. Each offer will be considered on its own merits for comparison with
other offers for that specific line item in Exhibit A.

c\. The requirements of the Cargo Preference Act of 1954, as amended
(Title 46 USC 1241 (b)) (See Exhibit K), apply to marine vessel
deliveries under this program. In order to facilitate and encourage the
participation of U.S.-flag commercial vessels in the marine
transportation of Exchange Oil to the DOE, preference shall be given to
reasonable offers that designate delivery on qualified U.S.-flag
vessels. The Government recognizes the increased transportation costs
incurred in using U.S.-flag vessels and shall consider such costs in its
evaluation of offers. However, this preference does not preclude the
award of contracts using foreign-flag vessels.

[]{#B8ContrAward .anchor}B.8 [Contract Award]{.underline}

A written award or acceptance of offer mailed or otherwise furnished to
the successful Offeror within the time for acceptance specified in the
offer shall result in a binding contract without further action by
either party. Before the offer's specified expiration time, the DOE may
accept an offer (or make an offer) whether or not there are negotiations
after its receipt. Negotiations conducted after receipt of an offer are
not a rejection or counteroffer by the DOE.

[]{#B9LOC .anchor}B.9 [Performance Letter of Credit]{.underline}

a\. Within five business days after receipt of award, the Purchaser must
provide to the Contracting Officer an "Irrevocable Standby Letter of
Credit" established in favor of the United States Department of Energy
equal to 60 percent of the value of the contracted quantity of the
Exchange Oil at the time of contract award, (in accordance with Note in
A.6.a.) and containing the substantive provisions set out in Exhibit H.
If multiple ("basket") crudes are offered, the highest value of the
crudes offered must be used in the calculation of the amount of the
Irrevocable Letter of Credit established. The letter of credit must be
issued by a depository institution located in and authorized to do
business in any state of the United States or the District of Columbia,
and authorized to issue letters of credit by the banking laws of the
United States or any state of the United States or the District of
Columbia. The original of the letter of credit must be sent to the
Contracting Officer at the address specified in Paragraph B.1.d. of this
solicitation. Failure to provide the letter of credit shall constitute
grounds for termination of contract(s) for default.

b\. The letter of credit must be an "Irrevocable Standby Letter of
Credit" and MUST NOT VARY IN SUBSTANCE from the sample in Exhibit H. If
the letter of credit contains any provisions at variance with Exhibit H
or fails to include any provisions contained in Exhibit H, nonconforming
provisions must be deleted and missing substantive provisions must be
added or the letter of credit will not be accepted. The letter of credit
must be effective on or before October 1, 2002 and remain in effect
through May 31, 2003, must permit multiple partial drawings, and must

contain the contract number. The issuing bank must provide documentation
indicating that the person signing the letter of credit is authorized to
do so, in the form of corporate minutes, the Authorized Signature List,
or the General Resolution of Signature Authority.

c\. All wire deposit and letter of credit costs will be borne by the
purchaser.

[]{#CQQDetermination .anchor}**[SECTION C ‑ QUALITY AND QUANTITY
DETERMINATION/INSPECTION AND ACCEPTANCE]{.underline}**

[]{#C1CustodyTrans .anchor}C.1 [Custody Transfer of Royalty Oil Received
by the Contractor]{.underline}

All Royalty Oil contracted for and delivered at the Market Center must
be accepted by the Contractor for the entire Royalty Oil delivery
period. If additional Royalty Oil (over the contracted amount) is made
available, the Contractor is obligated to take delivery of that oil and
the exchange delivery amount will be adjusted accordingly. The
Contractor will take custody of the Royalty Oil at the Market Center.

[]{#C2CustTranDXO .anchor}C.2 [Custody Transfer Measurements for
Delivery of Exchange Oil to the DOE]{.underline}

Custody transfer measurements will be in accordance with established API
standards and will be witnessed by a U.S. Government representative. The
Contractor may witness the measurement and testing of Exchange Oil for
its account and/or may provide, at Contractor's expense, a Contractor's
inspector to witness the measurement and testing process. The custody
transfer measurements of the Exchange Oil to be delivered by the
Contractor to the DOE facilities will be based on the following delivery
locations.

> a\. Sun Partners Marketing & Terminals LP
>
> \(1\) Sun Partners Marketing & Terminals LP, Nederland, TX for
> delivery to the DOE Big Hill Site -- Sun dock meters and Sun dock
> certified in-line sampler or Sun shore tank gauges and Sun shore tank
> composite sample, or certified automatic in-line sampler taken on
> delivery into the Sun tankage to the DOE Big Hill Site. The tests
> specified in Exhibit F shall be performed by the Sun facility
> laboratory.
>
> Note: If the Contractor's delivery of crude oil to DOE at Sun utilizes
> non-static Sun tankage, the custody transfer and quantity measurements
> shall be determined when the crude oil passes through the Sun dock
> meters. A sample collected from the Sun dock certified automatic
> in-line sampler shall be used for quality determination. API gravity,
> S&W, and sulfur will be determined in the Sun facility laboratory. In
> the event the dock meters and/or sampler fail, the backup measurement
> is the vessel discharge volume and vessel composite sample.
>
> \(2\) Sun Partners Marketing & Terminals LP, Nederland, TX for
> delivery to the DOE West Hackberry Site -- Sun shore tank gauges and
> Sun shore tank composite sample or certified automatic in-line sampler
> taken on delivery out of the Sun Partners Marketing & Terminals LP
> tankage to the DOE West Hackberry Site. The tests specified in Exhibit
> F shall be performed by the Sun facility laboratory.
>
> Note: If the Contractor's delivery of crude oil to DOE at Sun utilizes
> non-static Sun tankage, the custody transfer and quantity measurements
> shall be determined when the crude oil passes through the Sun dock
> meters. A sample collected from the Sun dock certified automatic
> in-line sampler shall be used for quality determination. API gravity,
> S&W, and sulfur will be determined in the Sun facility laboratory. In
> the event the dock meters and/or sampler fail, the backup measurement
> is the vessel discharge volume and vessel composite sample.
>
> b\. Union Oil Company of California, Nederland, TX -- UNOCAL shore
> tank gauges and UNOCAL shore tank composite sample or certified
> automatic in-line sampler taken on delivery out of UNOCAL Terminal.
> The tests specified in Exhibit F shall be performed by the DOE or by a
> DOE-contracted laboratory.
>
> c\. Shell Pipeline Company LP 20" pipeline connection to the DOE Big
> Hill 36-inch pipeline - the custody transfer measurements shall be
> taken at the Big Hill custody meter and automatic in-line sampler. The
> tests specified in Exhibit F shall be performed by the DOE or by a
> DOE-contracted laboratory.
>
> d\. DOE Lake Charles Meter Station (LCMS) connection to the Equilon
> Pipeline Company LLC 22" pipeline - the custody transfer measurements
> shall be taken at the DOE LCMS custody transfer meters and automatic
> in-line sampler. The sample analysis shall be performed by the DOE
> West Hackberry facility. The balance of the tests specified in Exhibit
> F shall be performed by the DOE or by a DOE-contracted laboratory.

[]{#C3ExchOilQual .anchor}C.3 [Exchange Oil Quality
Determination]{.underline}

a\. Upon vessel arrival at a discharge terminal but prior to discharge,
the ship's composite tank sample shall be tested and verified by a DOE
contracted facility for API Gravity, and Sediment and Water tests to
allow commencement of discharge.

b\. The quality of the Exchange Oil that is delivered by the Contractor
to the DOE will be determined from samples taken from the terminal
delivery tanks in accordance with API Manual of Petroleum Measurement
Standards, Chapter 8.1, Manual Sampling of Petroleum and Petroleum
Products (American Society for Testing Materials (ASTM) D4057), latest
edition; or from a representative sample collected

by an automatic sampler whose performance has been proven in accordance
with the API Manual of Petroleum Measurement Standards, Chapter 8.2,
Automatic Sampling of Petroleum and Petroleum Products (ASTM D4177),
latest edition. Preference will be given to samples collected by means
of an automatic sampler when such a system is available and operational.

c\. If the Exchange Oil tendered for delivery to the DOE does not meet
the crude oil specifications as provided in Exhibit F, the Government
reserves the right to refuse the acceptance of the delivery and the
provisions of G.4. [Default]{.underline} may apply.

d\. The Contractor or his representative may, at its option, arrange to
witness and verify testing simultaneously with the Government
Representative. Such services, however, will be for the account of the
Contractor. Any disputes will be settled in accordance with Paragraph
G.5. Should the Contractor opt not to witness the testing, then the
Government findings will be binding on the Contractor.

[]{#C4EOQDeterm .anchor}C.4 [Exchange Oil Quantity
Determination]{.underline}

a\. The quantity of the Exchange Oil that is delivered by the Contractor
to the DOE will be determined by opening and closing tank gauges (with
adjustment for opening and closing free water and Sediment and Water
tests as determined from shore tank samples where an automatic sampler
is not available) or delivery meter reports. All volumetric measurements
will be corrected to net standard volume in barrels at 60°F, using the
API Manual of Petroleum Measurement Standards, Chapter 11.1, Volume 1,
Volume Correction Factors (ASTM D1250) (IP 200); Table 5A-Generalized
Crude Oils, Correction of Observed API Gravity to API Gravity at 60°F;
Table 6A-Generalized Crude Oils, Correction of Volume to 60°F Against
API Gravity at 60°F, latest edition, and by deducting the tank's free
water, and the entrained Sediment and Water as determined by the testing
of composite all levels samples taken from the delivery tanks; or by
deducting the sediment and water as determined by testing a
representative portion of the sample collected by a certified automatic
sampler, and also corrected by the applicable pressure correction factor
and meter factor.

b\. The quantity measurements shall be performed and certified by the
Government's responsible party for delivery operations, and witnessed by
the Government's Representative at the delivery point. The Contractor
may, at its option, have representatives present at the
gauging/metering, sampling, and testing. Should the Contractor arrange
for additional inspection services, such services will be for the
account of the Contractor. Any disputes shall be settled in accordance
with Paragraph G.5. Should the Contractor not arrange for additional
services, then the Government's quantity determination shall be binding
on the Contractor.

## C.5 Title to Crude Oil

[]{#C5TitleCO .anchor}

a\. Title and custody for the Royalty Oil will be transferred to the
contractor at the Market Center custody transfer point.

b\. Title to the Exchange Oil delivered to the SPR will be transferred
to the DOE at the custody transfer measurement locations listed in
Provision C.2.

> c\. The DOE shall have the right to reject any Exchange Oil which,
> when tendered for delivery, may be involved in litigation, or the
> title of which may be in dispute. Also, the DOE may require of the
> Contractor satisfactory evidence of the Contractor's perfect and
> unencumbered title or satisfactory indemnity bond. The Contractor
> warrants and guarantees that it has good title thereto to the Exchange
> Oil being provided to the DOE.

[]{#DPayment .anchor}**[SECTION D ‑ PAYMENT]{.underline}**

[]{#D1MethodPayment .anchor}D.1 [Method of Payments]{.underline}

Payment for Royalty Oil shall be Exchange Oil delivered to the SPR in
accordance with the terms of the contract.

[]{#D2MoneySettle .anchor}D.2 [Monetary Settlements]{.underline}

Amounts due based on imbalances/adjustments as noted in Provisions A.5
and A.6, shall be in U.S. Dollars, by means of electronic transfer of
funds (ACH or Fedwire). Contractors shall provide bank and account
information to the DOE for all amounts due to the Contractor. Amounts
due to the DOE shall be invoiced and will become due and payable upon
receipt of invoice. Nonpayment of the invoice constitutes the condition
under which the invoice will be drawn against the Letter of Credit.

####### SECTION E -- FORCE MAJEURE

Force Majeure means, except for payment due hereunder, either party
hereto shall be relieved from liability for failure to perform hereunder
for the duration and to the extent such failure is occasioned by war,
riots, insurrections, fire, explosions, sabotage, strikes, and other
labor or industrial disturbances, acts of God or the elements,
disruption or breakdown of production or transportation facilities, or
delays of pipeline carrier in receiving and delivering crude oil
tendered. Any such failures to perform shall be remedied with all
reasonable dispatch.

[]{#FShipping .anchor}**[SECTION F ‑ SHIPPING]{.underline}**

[]{#F1SchedulROM .anchor}F.1 [Scheduling of Royalty Oil
Movements]{.underline}

> a\. The Contractor, at its expense, shall make all necessary
> arrangements to receive delivery of Royalty Oil at the Market Center,
> to include all accounting, documentation, and pump through charges at
> the custody transfer point.
>
> b\. The Contractor agrees to take 100 percent of the contracted amount
> of Royalty Oil delivered to it at the Market Center for the entire
> delivery period of this contract and to take additional Royalty Oil if
> made available by the Government. To facilitate timely and accurate
> delivery of Royalty Oil, the Contractor or its agent will communicate
> directly with the Pipeline Operator and make arrangements for the
> delivery and transfer of Royalty Oil from the Market Center
>
> c\. Each month of the Royalty Oil delivery period, the Contractor will
> notify the DOE within 15 days following each monthly delivery period
> regarding the quantities of Royalty Oil received.

[]{#F2ScheduExOM .anchor}F.2 [Scheduling of Exchange Oil
Movements]{.underline}

a\. For marine deliveries, the Contractor shall nominate a delivery
program to the DOE not later than seven days prior to the start of each
month in which deliveries will be made. The nomination will include a
three-day delivery date range for each cargo, the type of oil, and the
approximate delivery volume. The DOE will respond to each Contractor
within five days of receipt of the schedule either confirming the
schedule as originally submitted or proposing alterations. The
Contractor shall be deemed to have agreed to those alterations unless
the Contractor requests the DOE to reconsider its request within two
days. The DOE will use its best efforts to accommodate such requests,
but its decision following any reconsideration shall be final and
binding.

> \(1\) No later than seven days prior to each delivery, the Contractor
> shall nominate the name of the vessel, the expected date of arrival,
> and the volume to be delivered. The DOE will accept or reject the
> nomination, without prejudice, and advise the Contractor within one
> business day of the disposition of vessel nominated.

\(2\) The Contractor, or its designated agent, will provide pre-arrival
notices 72 hours, 48 hours and 24 hours prior to discharge to both the
DOE and the discharge terminal.

b\. For pipeline deliveries, the Contractor will make necessary
arrangements with the commercial pipelines connected to the DOE or its
interconnecting pipelines. Nomination information regarding these
deliveries will be provided to the DOE not later than five days prior to
the month in which deliveries will be made.

c\. The Contractor shall be responsible for meeting all delivery
requirements imposed by the commercial facilities, including complying
with the rules, regulations and procedures contained in applicable
port/terminal manuals, pipeline tariffs, or other applicable documents.

> d\. Whenever an inspector is appointed by the Contractor to witness
> the delivery operation (gauging, sampling, testing, etc.), written
> notification shall be provided to the DOE, no later than 72 hours
> prior to the scheduled date of each applicable cargo delivery to the
> DOE.
>
> e\. Absence of the name(s) of a Contractor's inspector on the delivery
> documentation constitutes acceptance by the Contractor of the delivery
> quantity and quality as determined by the DOE and/or its
> representative(s).

f\. The Contractor is solely responsible for making the necessary
arrangements with terminals and pipeline carriers, including tankage, to
achieve any minimum rate/quantity required by connecting commercial
facilities to ensure Exchange Oil deliveries are made to DOE delivery
location(s).

g\. To assist the DOE's reporting under the Cargo Preference Act, the
Contractor, at the time of delivery, shall provide information regarding
the marine transportation of the Exchange Oil into the DOE. Information
required is the origin port, flag of registry, vessel name, destination
port and transportation costs. If the Contractor acquires non-domestic
Exchange Oil which has already been delivered to a U.S. port,
information is required as to the date acquired by the Contractor and
the oil's location, e.g., name of U.S. terminal or storage facility, at
that time.

h\. Within seven (7) days of award, the Contractor shall provide a copy
of a charter and/or agreement documenting the use of U. S. Flag
Transportation for the contract volumes agreed upon in the award. If
documentation is not received, the conditions listed F.2.i. below will
apply.

i\. If during the performance of a contract awarded on the basis of
foreign flag vessel delivery, U. S.-flag vessel(s) become available for
use by the Contractor, the Contracting Officer will consider a request
for contract modification for use of such vessels.

If U.S. tonnage is offered which requires multiple delivery vessels
(e.g. lightering) the mother vessel, at a minimum, must be of U.S.
registry.

Offerors are cautioned that if U.S. flag tonnage is not secured after it
was agreed upon in the contract it may result, at the Government's
option, in termination by default or the obligation to provide
additional crude oil to the SPR to compensate for the freight
differential of substituting foreign flag tonnage. The calculation of
the freight differential will be determined by the Contracting officer.

j\. The Contractor's vessel agent, who will be nominated for approval by
the DOE, will be responsible for providing the DOE with full delivery
information for all Exchange Oil deliveries, to include load port
quantities, departure timeframes and all pertinent data. Additionally,
pre-arrival information shall be provided regarding delivery volumes,
ETAs and any special delivery requirements that may affect the expedient
discharge of the vessel.

[]{#F3EnvComplia .anchor}F.3 [Environmental Compliance]{.underline}

Failure of the Contractor or the Contractor's subcontractor(s) to comply
with all applicable rules and regulations in the transportation of crude
oil will be considered a failure to comply with the terms of any
contract containing these provisions, and may result in termination for
default, unless, in accordance with Paragraph G.7, such failure was
beyond the control and without the fault or negligence of the
Contractor, its affiliates, its agents or subcontractors at any tier.

[]{#F4DelRecDocRO .anchor}F.4 [Delivery and Receipt Documentation of
Royalty Oil]{.underline}

a\. The Pipeline Operator of the Market Center will provide to the
Contractor a copy of the standard industry practice meter run tickets
documenting the delivery/receipt of Royalty Oil at the Market Center.

b\. Within 15 days after the end of each month, the Contractor shall
provide to the Contracting Officer in a format specified by the
Contracting Officer, a summary by Market Center of the quantity of
Royalty Oil received. The Contractor shall provide the Contracting
Officer the point of contact responsible for this information.

[]{#F5DelRecDocEO .anchor}F.5 [Delivery and Receipt Documentation of
Exchange Oil]{.underline}

The quantity and quality determination of the Exchange Oil provided by
the Contractor shall be documented on the Material Inspection and
Receiving Report (DD Form 250 for pipeline receipts or DD Form 250-1 for
vessel receipts)(see Exhibit D1 and D2 for samples of the forms). Copies
of the completed DD Forms 250 or 250-1, with applicable supporting
documentation (i.e., metering or tank gauging tickets and appropriate
calculation worksheets), will be furnished to the Contractor and/or the
Contractor's authorized representative after completion of delivery.

[]{#GContAdmin .anchor}**[SECTION G - CONTRACT ADMINISTRATION DATA AND
PROVISIONS]{.underline}**

[]{#G1CorrProced .anchor}G.1 [DOE SPR Correspondence
Procedures]{.underline}

> To promote timely and effective administration, correspondence
> submitted under this contract shall be subject to the following
> procedures:
>
> \(a\) Technical Correspondence. Technical correspondence (as used
> herein, this term excludes technical correspondence that proposes or
> otherwise involves waivers, deviations, or modifications to the
> requirements, terms, or conditions, of this contract) shall be
> addressed to the Contracting Officer's Representative (COR). An
> information copy (without enclosures) shall be provided to the
> Contracting Officer.
>
> \(b\) Other Correspondence. All other correspondence shall be
> addressed to the Contracting Officer, with information copies of the
> correspondence to the (COR).
>
> \(c\) Contracting Officer's Address. The Contracting Officer's address
> is as follows:
>
> M. G. Waggoner
>
> Contracting Officer
>
> Department of Energy
>
> Strategic Petroleum Reserve
>
> ATTN: FE-4451
>
> 900 Commerce Road East
>
> New Orleans, LA 70123
>
> \(504\) 734-4444
>
> \(d\) All correspondence shall contain the following information:
>
> Contract Number:
>
> Subject of Correspondence:

G.2 [Department of Energy Contract Specialist for Post Award
Administration]{.underline}

> []{#g2contspec .anchor}The Department of Energy Contract Specialist
> is:
>
> Rose Gaillard
>
> Department of Energy
>
> Strategic Petroleum Reserve
>
> ATTN: FE-4451
>
> 900 Commerce Road East
>
> New Orleans, LA 70123
>
> \(504\) 734-4776

The Contractor shall use the Contract Specialist as the point of contact
on all but technical matters (see Paragraph G.l.(a), above, for
definition).

[]{#G3ContOfficer .anchor}G.3 [Contracting Officer's Representative for
Post Award Administration]{.underline}

> The Contracting Officer's Representative (COR) is:

Mr. David Callahan

Department of Energy

Strategic Petroleum Reserve

ATTN: FE-4422

# 900 Commerce Road East

New Orleans, LA 70123

\(504\) 734-4327

> The alternate COR is: FE-4422, Mr. Bill A. Shourbaji (504) 734-4637
>
> The Contractor shall use the COR as the point of contact on technical
> matters (see G.1.(a), above, for definition).

[]{#G4Default .anchor}G.4 [Default]{.underline}

a\. The Government may, by written notice of default to the Customer,
terminate this contract in whole or in part if the Customer fails to -

\(1\) Remove the crude oil within the time specified in this contract or
any extension;

\(2\) Make progress in scheduling of contracted deliveries, so as to
endanger performance of this contract; or

\(3\) Perform any of the other provisions of this contract.

b\. The rights and remedies of the Government in this clause are in
addition to any other rights and remedies provided by law or under this
contract.

[]{#G5Disputes .anchor}G.5 [Disputes]{.underline}

a\. This contract is subject to the Contract Disputes Act of 1978, as
amended (41 U.S.C. Section 601 et seq.). If a dispute arises relating to
the contract, the Customer may submit a claim to the Contracting
Officer, who shall issue a written decision on the dispute in the manner
specified in 48 CFR 1-33.211.

b\. "Claim" means:

\(1\) A written request submitted to the Contracting Officer;

\(2\) For payment of money, adjustment of contract terms, or other
relief;

\(3\) Which is in dispute or remains unresolved after a reasonable time
for its review and disposition by the Government; and

\(4\) For which a Contracting Officer's decision is demanded.

c\. In the case of dispute requests or amendments to such requests for
payment exceeding \$100,000, the Customer shall certify at the time of
submission as a claim, as follows:

I certify that the claim is made in good faith, that the supporting data
are current, accurate and complete to the best of my knowledge and
belief and that the amount requested accurately reflects the contract
adjustment for which the Customer believes the Government is liable.

Customer's Name

Signature

Title

d\. The Government shall pay to the Customer interest on the amount
found due to the Customer on claims submitted under this provision at
the rate established by the Department of the Treasury from the date the
amount is due until the Government makes payment. The Contract Disputes
Act of 1978, as amended, and the Prompt Payment Act adopt the interest
rate established by the Secretary of the Treasury under the
Renegotiation Act as the basis for computing interest on money owed by
the Government. This rate is published semi-annually in the Federal
Register.

e\. The Customer shall pay, to the Government, interest on the amount
found due to the Government and unpaid on claims submitted under this
provision at the rate specified in Paragraph d. above from the date the
amount is due until the Customer makes payment.

f\. The decision of the Contracting Officer shall be final and
conclusive and shall not be subject to review by any forum, tribunal, or
Government agency unless an appeal or action is commenced within the
times specified by the Contract Disputes Act of 1978, as amended.

g\. The Customer shall comply with any decision of the Contracting
Officer and at the direction of the Contracting Officer shall proceed
diligently with performance of this contract pending final resolution of
any request for relief, claim, appeal, or action related to this
contract.

[]{#G6Termination .anchor}G.6 [Termination for the Convenience of the
Government]{.underline}

The Contracting Officer, by written notice, may terminate this contract,
in whole or in part, when it is in the Government's interest. If this
contract is terminated, the Government shall be liable only for actual
costs incurred by the Customer before the effective date of termination.

[]{#G7ExcuseDelay .anchor}G.7 [Excusable Delays]{.underline}

a\. In the event either party should be prevented from performing under
this contract by reason of any unforeseeable cause beyond its control
and without its fault or negligence, including, but not restricted to,
acts of God or of the public enemy, sovereign acts of the United States,
acts of a foreign Government, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes and unusually severe weather,
performance under the contract shall be suspended in whole or in part
until such cause ceases to exist and thereafter the time for fulfillment
of the contract shall be extended by the length of time during which
such cause prevented performance under the contract.

b\. In order for this provision to become operative, the party to the
contract affected by the excusable delay condition shall furnish the
other party with written notice of the nature and extent of the
excusable delay condition promptly after the commencement thereof, but
in any event prior to outloading of the crude oil from the exchange
location from which it is to be shipped. Written notice shall be
furnished within ten (10) calendar days to the other party when the
excusable delay condition ceases to exist.

[]{#G8Mod .anchor}G.8 [Modification]{.underline}

No oral statement of any person shall modify or otherwise affect the
terms, conditions, or specifications stated in this contract. All
modifications to the contract shall be made in writing by the
Contracting Officer.

[]{#G9Covenant .anchor}G.9 [Covenant Against Contingent
Fees]{.underline}

a\. The Offeror warrants that no person or agency has been employed or
retained to solicit or obtain this contract upon an agreement or
understanding for a contingent fee, except a bona fide employee or
agency. For breach or violation of this

warranty, the Government shall have the right to annul this contract
without liability or, in its discretion, to add to the contract price or
consideration, or otherwise recover, the full amount of the contingent
fee.

b\. "Bona fide agency," as used in this paragraph, means an established
commercial or selling agency, maintained by a Customer for the purpose
of securing business, that neither exerts nor proposes to exert improper
influence to solicit or obtain Government contracts nor holds itself out
as being able to obtain any Government contract or contracts through
improper influence.

c\. "Bona fide employee," as used in this paragraph, means a person,
employed by a Offeror and subject to the Offeror's supervision and
control as to time, place, and manner of performance, who neither exerts
nor proposes to exert improper influence to solicit or obtain Government
contracts nor holds out as being able to obtain any Government contract
or contracts through improper influence.

d\. "Contingent fee," as used in this paragraph, means any commission,
percentage, brokerage, or other fee that is contingent upon the success
that a person or concern has in securing a Government contract.

e\. "Improper influence," as used in this paragraph, means any influence
that induces or tends to induce a Government employee or officer to give
consideration or to act regarding a Government contract on any basis
other than the merits of the matter.

[]{#G10Assign .anchor}G.10 [Assignment]{.underline}

The Contractor shall not make or attempt to make any assignment of a
contract that incorporates the clauses of this RFP or any interest
therein contrary to the provisions of Federal law, including the
Anti-Assignment Act (41 U.S.C. 15), without first notifying the
Contracting Officer.

[]{#G11OfficialsNTB .anchor}G.11 [Officials Not to Benefit]{.underline}

No member of or delegate to Congress, or Resident Commissioner, shall be
admitted to any share or part of this contract, or to any benefit
arising from it. However, this clause does not apply to this contract to
the extent that this contract is made with a corporation for the
corporation's general benefit.

[]{#G12Gratuities .anchor}G.12 [Gratuities]{.underline}

a\. The Government, by written notice to the Customer, may terminate the
right of the Customer to proceed under this contract if it is found,
after notice and hearing, by the Secretary of Energy or his duly
authorized representative, that gratuities (in the

form of entertainment, gifts, or otherwise) were offered by or given by
the Customer, or any agent or representative of the Customer, to any
officer or employee of the Government with a view toward securing a
contract or securing favorable treatment with respect to the awarding,
amending, or making of any determinations with respect to the performing
of such contract; provided, that the existence of the facts upon which
the Secretary of Energy or his duly authorized representative makes such
findings shall be in issue and may be reviewed in any competent court.

b\. In the event that this contract is terminated as provided in
Paragraph (a) hereof, the Government shall be entitled (1) to pursue the
same remedies against the Customer as it could pursue in the event of a
breach of the contract by Customer, and (2) as a penalty in addition to
any other damages to which it may be entitled by law, to exemplary
damages in an amount (as determined by the Secretary of Energy or his
duly authorized representative) which shall not be less than three nor
more than 10 times the cost incurred by the Customer in providing any
such gratuities to any such officer or employee.

c\. The rights and remedies of the Government provided in this clause
shall not be exclusive and are in addition to any other rights and
remedies provided by law or under this contract.

[]{#G13Notation .anchor}G.13 [Novation Agreement]{.underline}

Notwithstanding the provisions contained in Provision G.10, the
Government shall recognize a third party as the successor in interest to
a Government contract(s) when the third party's interest in the contract
arises out of a transfer of all the Customer assets involved in
performing the contract. This shall be done through the execution of a
Novation Agreement a copy of which shall be provided to the Government.
A sample Novation Agreement is provided as Exhibit I.

[]{#HCertifications .anchor}**[SECTION H - CERTIFICATIONS]{.underline}**

**Please complete and return this section with your offer.**

[]{#H1CertofIndep .anchor}H.1 [Certificate of Independent Value
Determination]{.underline}

a\. The Offeror certifies that -

\(1\) The Exchange Oil offered to Government has been arrived at
independently, without, for the purpose of restricting competition, any
consultation, communication, or agreement with any other Offeror or
competitor relating to (i) those values, (ii) the intention to submit an
offer, or (iii) the methods or factors used to calculate the values
offered;

\(2\) The Exchange Oil offered to Government has not been and shall not
be knowingly disclosed by the Offeror, directly or indirectly, to any
other Offeror or competitor before contract award unless otherwise
required by law; and

\(3\) No attempt has been made or shall 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 in the Offeror's organization responsible for
determining the value being offered in this proposal, and that the
signatory has not participated and shall not participate in any action
contrary to Subparagraphs a.(1) through a.(3) above; or

(2)(i) Has been authorized, in writing, to act as agent for the
following principals in certifying that those principals have not
participated, and shall not participate in any action contrary to
Subparagraphs a.(1) through a.(3) above

(insert full name of person(s) in the Offeror's organization responsible
for determining the quantities offered in this proposal, and the title
of his/her position in the Offeror's organization);

   (ii) As an authorized agent, does certify that the principals named
in subdivision b.(2)(i) above have not participated, and shall not
participate, in any action contrary to Subparagraphs a.(1) through a.(3)
above; and

  (iii) As an agent, has not personally participated, and shall not
participate, in any action contrary to Subparagraphs a.(1) through a.(3)
above.

c\. If the Offeror deletes or modifies Subparagraph a.(2) above, the
Offeror shall furnish with its offer a signed statement setting forth in
detail the circumstances of the disclosure.

[]{#H2ContingFee .anchor}H.2 [Contingent Fee Representation and
Agreement]{.underline}

a\. Representation. The Offeror represents that, except for full-time
bona fide employees working solely for the Offeror, the Offeror: (Note:
The Offeror shall check the appropriate boxes. For interpretation of the
representation, including the term bona fide employee, see Provision
G.9.)

\(1\) \_\_\_\_\_\_ has, \_\_\_\_\_\_ has not employed or retained any
person or company to solicit or obtain this contract; and

\(2\) \_\_\_\_\_\_ has, \_\_\_\_\_\_ has not paid or agreed to pay to
any person or company employed or retained to solicit or obtain this
contract any commission, percentage, brokerage, or other fee contingent
upon or resulting from the award of this contract.

b\. Agreement. The Offeror agrees to provide information relating to the
above Representation as requested by the Contracting Officer and, when
Subparagraph (a)(1) or (a)(2) is answered affirmatively, to promptly
submit to the Contracting Officer-

\(1\) A completed Standard Form 119, Statement of Contingent or Other
Fees, (SF 119); or

\(2\) A signed statement indicating that the SF 119 was previously
submitted to the same Contracting Officer, including the date and
applicable solicitation or contract number, and representing that the
prior SF 119 applies to this offer or quotation.

[]{#H3CertDebar .anchor}H.3 [Certification Regarding Debarment,
Suspension, Proposed Debarment and Other Responsibility
Matters]{.underline}

a\. (1) The Offeror certifies, to the best of its knowledge and belief,
that -

\(i\) The Offeror and/or any of its Principals --

\(A\) Are (\_\_\_\_\_\_) are not (\_\_\_\_\_\_) presently debarred,
suspended, proposed for debarment, or declared ineligible for the award
of contracts by a Federal agency.

\(B\) Have (\_\_\_\_\_\_) have not (\_\_\_\_\_\_), within a 3-year
period preceding this offer, been convicted of or had a civil judgment
rendered against them for: commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing a public
(Federal, state or local) contract or subcontract; violation of Federal
or state antitrust statutes relating to the submission of offers; or
commission of embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements, or receiving stolen
property; and

\(C\) Are (\_\_\_\_\_\_) are not (\_\_\_\_\_\_) presently indicted for,
or otherwise criminally or civilly charged by a Governmental entity
with, commission of any of the offenses enumerated in subdivision
(a)(1)(i)(B) of this provision.

\(ii\) The Offeror has (\_\_\_\_\_\_) has not (\_\_\_\_\_\_) within a
3-year period preceding this offer, had one or more contracts terminated
for default by any Federal agency.

\(2\) "Principals," for the purposes of this certification, means
officers; directors; owners; partners; and, persons having primary
management or supervisory responsibilities within a business entity
(e.g., general manager; plant manager; head of a subsidiary division, or
business segment, and similar positions).

This certification concerns a matter within the jurisdiction of an
agency of the United States and the making of a false, fictitious, or
fraudulent certification may render the maker subject to prosecution
under section 1001, title 18, United States Code.

b\. The Offeror shall provide immediate written notice to the
Contracting Officer if, at any time prior to contract award, the Offeror
learns that its certification was erroneous by reason of changed
circumstances.

c\. A certification that any of the items in Paragraph a. of this
provision exists shall not necessarily result in withholding of an award
under this solicitation. However, the certification shall be considered
in connection with a determination of the Offeror's responsibility.
Failure of the Offeror to furnish a certification or provide such
additional information as requested by the Contracting Officer may
render the Offeror nonresponsive.

d\. Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render, in good faith,
the certification required in Paragraph (a) of this provision. The
knowledge and information of an Offeror is not required to exceed that
which is normally processed by a prudent person in the ordinary course
of business dealings.

e\. The certification in Paragraph a. of this provision is material
representation of fact upon which reliance was placed when making award.
If it is later determined that the Offeror knowingly rendered an
erroneous certification, in addition to the other remedies available to
the Government, the Contracting Officer may terminate the contract
resulting from this solicitation for default.

[]{#H4LOCInfo .anchor}H.4 [Letter of Credit Information]{.underline}

Provide below the name, address, phone number, and point of contact for
the financial institution that will provide the letter of credit
required by Clause B.9 of this solicitation.

Name of Bank Issuing

Letter of Credit

Contact at Bank

(for verification):

[]{#H5BusStatCert .anchor}H.5 [Business Status
Certification]{.underline}

I hereby certify that we are are not a regular seller, purchaser, or
trader of crude oil.

[]{#IExhibits .anchor}**[SECTION I - EXHIBITS]{.underline}**

> I.1 Exhibit A - Market Center Information
>
> I.2 Exhibit B - Offer Form
>
> I.3 Exhibit C -- Exchange Oil Delivery Location Information
>
> I.4 Exhibit D-1 - Sample Material Inspection and Receiving Report
>
> Exhibit D-2 - Sample Tanker Barge Material Inspection and Receiving
> Report
>
> I.5 Exhibit E - Contract Form
>
> I.6 Exhibit F - DOE Crude Oil Specifications
>
> I.7 Exhibit G - Sample -- Offer Guarantee Irrevocable Standby Letter
> of Credit
>
> I.8 Exhibit H - Sample -- Performance Irrevocable Standby Letter of
> Credit
>
> I.9 Exhibit I - Diagrams of DOE Facilities
>
> I.10 Exhibit J - Sample Novation Agreement
>
> I.11 Exhibit K - Cargo Preference Act

[]{#IExhibA .anchor}

**Exhibit A**

### Market Center Information

**(Volumes available are estimates only)**

**[Market Center]{.underline} [Crude Oil Type]{.underline} [QTY (MBD)
Available]{.underline} [Total Royalty Available]{.underline}**

**Clovelly Mars 1,530 278,460**

**St. James EIS 1,125 204,750**

**Bonito 7,865 1,431,430**

**LLS 8,045 1,464,190**

**Empire HLS 22,360 4,069,520**

**Houma Poseidon 3,130 569,660**

## ROYALTY OIL QUANTITIES ARE ESTIMATES ONLY

[]{#IExhibitB .anchor}**Exhibit B**

+--------+--------+--------+-----+----+------+-----+-------+-------+
| ###    |        |        | #   |    |      |     |       |       |
|  ROYAL |        |        | ##  |    |      |     |       |       |
| TY OIL |        |        | EXC |    |      |     |       |       |
|        |        |        | HAN |    |      |     |       |       |
|        |        |        | GE  |    |      |     |       |       |
|        |        |        | OIL |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
| Market | Ba     | Total  | Cr  | "  | API\ | S   | Deli  | DOE   |
| Ce     | rrels\ | Co     | ude | Y" | Gra  | ulf | very\ | Sit   |
| nter/\ | per    | ntract | Oil |    | vity | ur\ | Mode/ | e\*\* |
| Oil    | Day    | Volume | T   |    |      | %   | Locat |       |
| Type   |        |        | ype |    |      | Wei | ion\* |       |
|        |        |        |     |    |      | ght |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+
|        |        |        |     |    |      |     |       |       |
+--------+--------+--------+-----+----+------+-----+-------+-------+

**THIS OFFER SHALL REMAIN VALID UNTIL:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.**

**\*[Delivery Modes]{.underline}: \*[Location]{.underline} \*\*[DOE Site
Code]{.underline}:**

## P/L = Pipeline LCMS Shell Pipeline BH = Big Hill

## US = U.S. Flag Vessel Sun 

**FF = Foreign Flag Vessel UNOCAL WH = West Hackberry**

**NOTE: If multiple ("basket") crudes are used in an offer, each crude
and its API and Sulfur must be listed individually. A single "y" value
shall be used for each basket.**

[]{#IExhibC .anchor}**EXHIBIT C**

#### EXCHANGE OIL DELIVERY LOCATION INFORMATION

+--------------------------+---------+------------+--------------------+
| Contact for delivery     |         |            |                    |
| information              |         |            |                    |
+--------------------------+---------+------------+--------------------+
| Oil Movements Scheduling |         |            |                    |
+--------------------------+---------+------------+--------------------+
| Chuck Costanza           |         |            |                    |
|                          |         |            |                    |
| DynMcDermott Petroleum   |         |            |                    |
|                          |         |            |                    |
|   Operations Company     |         |            |                    |
|                          |         |            |                    |
| 850 S. Clearview Parkway |         |            |                    |
|                          |         |            |                    |
| New Orleans, LA 70123    |         |            |                    |
|                          |         |            |                    |
| Phone: 504-734-4733      |         |            |                    |
|                          |         |            |                    |
| FAX: 504-734-4442        |         |            |                    |
|                          |         |            |                    |
| Alternate: Michael Davis |         |            |                    |
|                          |         |            |                    |
| Phone: 504-734-4417      |         |            |                    |
+--------------------------+---------+------------+--------------------+

######## Shell 20-INCH PIPELINE

(DOE CONNECTION)

[Location]{.underline}: Jefferson County, Texas (near eastside of Hebert
Junction at mile marker 17.40).

[Receiving/Delivery Point]{.underline}: Tie-in connection of Shell
20-inch pipeline and DOE Big Hill pipeline. DOE pipeline is
bi-directional.

[Marine Distribution Facilities]{.underline}: None

**EXHIBIT C**

**(Continued)**

**EXCHANGE OIL DELIVERY LOCATION INFORMATION**

SUN PIPE LINE COMPANY

NEDERLAND TERMINAL

[Location]{.underline}: Nederland, Texas (on the Neches River at Smiths
Bluff in southwest Texas, 47.6 nautical miles from the bar)

[Delivery Points]{.underline}: Sun Terminal marine dock facility and Sun
Terminal connections to local commercial pipelines

[Marine Dock Facilities and Vessel Restrictions:]{.underline}

[Tankship Docks]{.underline}: 5 Docks: Nos. 1, 2, 3, 4 and 5

3 Barge Docks

# [Maximum Length]{.underline}

[Overall (LOA)]{.underline}: 1000 feet

###### [Maximum Beam]{.underline}: 150 feet

[Maximum Draft]{.underline}: 40 feet fresh water

[Maximum Air Draft]{.underline}: 136 feet

[Maximum Deadweight Tons (DWT)]{.underline}: Maximum DWT at Dock No. 1
is 85,000 DWT. Dock Nos. 2, 3, 4 and 5 can accommodate up to 150,000
DWT. Vessels larger than 85,000 DWT, 875 ft LOA and 125 ft beam are
restricted to daylight transit. Maximum DWT is theoretical berth
handling capability; however, Contractors are cautioned that varying
harbor and channel physical constraints are the controlling factors as
to vessel size, and they are responsible for confirming that proposed
vessels can be accommodated.

[Oily Waste Reception Facilities]{.underline}: Facilities are available
for oily bilge water and sludge wastes. Contractors are responsible for
making arrangements with the terminal and for bearing costs associated
with such arrangements.

[Customary Anchorage]{.underline}: South of Sabine Bar Buoy. There is an
additional anchorage at the Sabine Bar for vessels with draft of 39 feet
or less.

**EXHIBIT C**

**(Continued)**

**EXCHANGE OIL DELIVERY LOCATION INFORMATION**

Equilon 22-INCH/DOE LAKE CHARLES PIPELINE CONNECTION

[Location]{.underline}: Lake Charles Upper Junction, located in Section
36, Township 10 South, Range 10 West, Calcasieu Parish, (Lake Charles)
Louisiana

[Delivery Point]{.underline}: Equilon 22-Inch/DOE Lake Charles Pipeline
Connection

[Marine Distribution Facilities]{.underline}: None

####  

#### 

#### EXHIBIT C

**(Continued)**

**EXCHANGE OIL DELIVERY LOCATION INFORMATION**

#### 

#### UNOCAL BEAUMONT TERMINAL

[Location]{.underline}: Beaumont Terminal No. 2 Crude Dock, located
downstream south bank of the Neches River approximately eight miles SE
of Beaumont, Texas.

[Delivery Points]{.underline}: UNOCAL Beaumont Terminal No. 2 Crude Dock

[Marine Dock Facilities and Vessel Restrictions]{.underline}:

[Tankship Docks]{.underline}: No. 2 Crude Dock and Main Dock, No. 3 Spot

###### Maximum Length

[Length Overall (LOA)]{.underline}: 1020 feet

[Maximum Beam]{.underline}: 150 feet

[Maximum Draft]{.underline}: 40 feet fresh water

[Maximum Air Draft]{.underline}: 136 Feet

[Maximum Deadweight Tons {DWT)]{.underline}: Maximum DWT at Dock No. 2
is 150,000 DWT. Vessels larger than 85,000 DWT, 875 ft LOA and 125 ft
beam are restricted to daylight transit. Maximum DWT is theoretical
berth handling capability; however, Contractors are cautioned that
varying harbor and channel physical constraints are the controlling
factors as to vessel size, and they are responsible for confirming that
proposed vessels can be accommodated.

[Oily Waste Reception Facilities]{.underline}: Facilities are available
for oily bilge water and sludge wastes. Contractors are responsible for
making arrangements with the terminal and for bearing costs associated
with such arrangements.

[Vapor Control Capability]{.underline}: Dock 2 is equipped with a crude
oil vapor control system. All vessels loading crude must be outfitted
with vapor control equipment. No vessel will be allowed to load without
this equipment onboard.

[Customary Anchorage]{.underline}: South of Sabine Bar Buoy. There is an
additional anchorage at the Sabine Bar for vessels with draft of 39 feet
or less.

[]{#IExhibitD1 .anchor}**EXHIBIT D-1**

######## SAMPLE MATERIAL INSPECTION AND RECEIVING REPORT

<table>
<colgroup>
<col style="width: 13%" />
<col style="width: 1%" />
<col style="width: 13%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 12%" />
<col style="width: 2%" />
<col style="width: 0%" />
<col style="width: 8%" />
<col style="width: 4%" />
<col style="width: 1%" />
<col style="width: 6%" />
<col style="width: 3%" />
<col style="width: 5%" />
<col style="width: 2%" />
<col style="width: 16%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="13"><strong>MATERIAL INSPECTION AND RECEIVING
REPORT</strong></td>
<td colspan="3"><em>Form Approved<br />
OMB No. 0704-0248</em></td>
</tr>
<tr class="even">
<td colspan="16"><p>Public reporting burden for this collection of
information is estimated to average 35 minutes per response, including
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to Department of
Defense, Washington Headquarters Services, Directorate for Information
Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204,
Arlington, VA 22202-4302, and to the Office of Management and Budget,
Paperwork Reduction Project (0704-0248), Washington, DC 20503.</p>
<p><strong>PLEASE <u>DO NOT</u> RETURN YOUR COMPLETED FORM TO EITHER OF
THESE ADDRESSES.</strong></p></td>
</tr>
<tr class="odd">
<td colspan="5">1. PROC. INSTRUMENT IDEN. (CONTRACT)</td>
<td>(ORDER) NO.</td>
<td colspan="5">6. INVOICE NO./DATE</td>
<td colspan="3">7. PAGE OF</td>
<td colspan="2">8. ACCEPTANCE POINT</td>
</tr>
<tr class="even">
<td colspan="2">2. SHIPMENT NO.</td>
<td>3. DATE SHIPPED</td>
<td colspan="6"><p>4. B/L</p>
<p>TCN</p></td>
<td colspan="7">5. DISCOUNT TERMS</td>
</tr>
<tr class="odd">
<td colspan="7">9. PRIME CONTRACTOR <em>CODE</em></td>
<td colspan="9">10. ADMINISTERED BY <em>CODE</em></td>
</tr>
<tr class="even">
<td colspan="7">11. SHIPPED FROM (if other than 9) <em>CODE</em>
FOB:</td>
<td colspan="9">12. PAYMENT WILL BE MADE BY <em>CODE</em></td>
</tr>
<tr class="odd">
<td colspan="7">13. SHIPPED TO CODE</td>
<td colspan="9">14. MARKED FOR <em>CODE</em></td>
</tr>
<tr class="even">
<td><p><strong>15.</strong></p>
<p><strong>ITEM</strong></p>
<p><strong>NO<em>.</em></strong></p></td>
<td colspan="7"><p><strong>16. STOCK/PART NO. DESCRIPTION</strong></p>
<p><em><strong>(Indicate number of shipping containers - type
of</strong></em></p>
<p><em><strong>container - container number.)</strong></em></p></td>
<td colspan="2"><p><strong>17.</strong></p>
<p><strong>QUANTITY</strong></p>
<p><strong>SHIP / REC’D *</strong></p></td>
<td colspan="2"><p><strong>18.</strong></p>
<p><strong>UNIT</strong></p></td>
<td colspan="3"><p><strong>19.</strong></p>
<p><strong>UNIT PRICE</strong></p></td>
<td><p><strong>20.</strong></p>
<p><strong>AMOUNT</strong></p></td>
</tr>
<tr class="odd">
<td></td>
<td colspan="7"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td></td>
</tr>
<tr class="even">
<td colspan="10"><p><strong>21.</strong></p>
<p><strong>CONTRACT QUALITY ASSURANCE</strong></p></td>
<td colspan="6"><p><strong>22. RECEIVER’S USE</strong></p>
<p>Quantities shown in column 17 were received in</p></td>
</tr>
<tr class="odd">
<td colspan="4"><p>A. ORIGIN</p>
<p> CQA ACCEPTANCE of listed items has been made by me or under my
supervision and they conform to contract, except as noted herein or on
supporting documents.</p>
<p>_________ _________________________</p>
<p>DATE SIGNATURE OF AUTH GOVT REP</p>
<p>TYPED NAME</p>
<p>AND OFFICE</p></td>
<td colspan="6"><p>B. DESTINATION</p>
<p> CQA ACCEPTANCE of listed items has been made by me or under my
supervision and they conform to contract, except as noted herein or on
supporting documents.</p>
<p>_________ _________________________</p>
<p>DATE SIGNATURE OF AUTH GOVT REP</p>
<p>TYPED NAME</p>
<p>AND OFFICE</p></td>
<td colspan="6"><p>apparent good condition except as noted.</p>
<p>____________ _________________________</p>
<p>DATE RECEIVED SIGNATURE OF AUTH GOVT REP</p>
<p>TYPED NAME</p>
<p>AND OFFICE</p>
<p><strong>*</strong> <em>If quantity received by the Government is the
same, as quantity shipped, indicate by ( ) mark, if different, enter
actual quantity received below quantity shipped and
encircle.</em></p></td>
</tr>
<tr class="even">
<td colspan="16">23. CONTRACTOR USE ONLY</td>
</tr>
</tbody>
</table>

**D Form 250, DEC 91 *Previous editions are obsolete.***

**EXHIBIT D-2**

[]{#iexhibitd2 .anchor}SAMPLE TANKER BARGE MATERIAL INSPECTION AND
RECEIVING REPORT

<table style="width:100%;">
<colgroup>
<col style="width: 31%" />
<col style="width: 4%" />
<col style="width: 5%" />
<col style="width: 4%" />
<col style="width: 3%" />
<col style="width: 1%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 0%" />
<col style="width: 2%" />
<col style="width: 4%" />
<col style="width: 8%" />
<col style="width: 5%" />
<col style="width: 12%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="9"><p><strong>TANKER/BARGE MATERIAL INSPECTION</strong></p>
<p><strong>AND RECEIVING REPORT</strong></p></td>
<td colspan="6"><p>Form Approved</p>
<p>OMB No. 0704-0248</p>
<p>Expires Dec 31, 1990</p></td>
</tr>
<tr class="even">
<td colspan="15">Public reporting burden for this collection of
information is estimated to average 35 minutes per response, including
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to Washington
Headquarters Services, Directorate for Information Operations and
Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA
22202-4302, and to the Office of Management and Budget, Paperwork
Reduction Project (0704-0248), Washington, DC 20503.</td>
</tr>
<tr class="odd">
<td colspan="3"><p>1. TANKER/BARGE</p>
<p> LOADING REPORT DISCHARGE REPORT</p></td>
<td colspan="8">2. INSPECTION OFFICE</td>
<td colspan="4">3. REPORT NUMBER</td>
</tr>
<tr class="even">
<td colspan="7">4. AGENCY PLACING ORDER ON SHIPPER, CITY, STATE AND/OR
LOCAL ADDRESS (<em>Loading)</em></td>
<td colspan="4">5. DEPARTMENT</td>
<td colspan="4">6. PRIME CONTRACT OR P.O. NUMBER</td>
</tr>
<tr class="odd">
<td colspan="11">7. NAME OF PRIME CONTRACTOR, CITY, STATE AND/OR LOCAL
ADDRESS <em>(Loading)</em></td>
<td colspan="4">8. STORAGE CONTRACT</td>
</tr>
<tr class="even">
<td colspan="11">9. TERMINAL OR REFINERY SHIPPED FROM, CITY, STATE
AND/OR LOCAL ADDRESS <em>(Loading)</em></td>
<td colspan="4">10. ORDER NUMBER ON SUPPLIER</td>
</tr>
<tr class="odd">
<td colspan="11">11. SHIPPED TO <em>(Receiving Activity, City, State
and/or Local Address)</em></td>
<td colspan="4">12. B/L NUMBER</td>
</tr>
<tr class="even">
<td colspan="11"></td>
<td colspan="3">13. REQN. OR REQUEST NO.</td>
<td>14. CARGO NO.</td>
</tr>
<tr class="odd">
<td colspan="4">15. VESSEL</td>
<td colspan="8"><p>16. DRAFT ARRIVAL</p>
<p>FORE AFT</p></td>
<td colspan="3"><p>17. DRAFT SAILING</p>
<p>FORE AFT</p></td>
</tr>
<tr class="even">
<td colspan="4"><p>18. PREVIOUS TWO CARGOES</p>
<p>FIRST LAST</p></td>
<td colspan="11">19. PRIOR INSPECTION</td>
</tr>
<tr class="odd">
<td colspan="4">20. CONDITION OF SHORE PIPELINE</td>
<td colspan="9">21. APPROPRIATION <em>(Loading)</em></td>
<td colspan="2">22. CONTRACT ITEM NO.</td>
</tr>
<tr class="even">
<td colspan="5">23. PRODUCT</td>
<td colspan="10">24. SPECIFICATIONS</td>
</tr>
<tr class="odd">
<td>25. STATEMENT OF QUANTITY</td>
<td colspan="4">LOADED</td>
<td colspan="5">DISCHARGED</td>
<td colspan="3">LOSS/GAIN</td>
<td colspan="2">PER CENT</td>
</tr>
<tr class="even">
<td>BARRELS <em>(42 Gals) (Net)</em></td>
<td colspan="4"></td>
<td colspan="5"></td>
<td colspan="3"></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>GALLONS <em>(Net)</em></td>
<td colspan="4"></td>
<td colspan="5"></td>
<td colspan="3"></td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>TONS <em>(Long)</em></td>
<td colspan="4"></td>
<td colspan="5"></td>
<td colspan="3"></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td colspan="15">26. STATEMENT OF QUALITY</td>
</tr>
<tr class="even">
<td colspan="15">TESTS SPECIFICATION LIMITS TEST RESULTS</td>
</tr>
<tr class="odd">
<td colspan="15"></td>
</tr>
<tr class="even">
<td colspan="2">27. TIME STATEMENT</td>
<td colspan="4">DATE</td>
<td colspan="2">TIME</td>
<td colspan="7">28. REMARKS <em>(Note in detail cause of delays such as
repairs, breakdown, slow operation, stoppages, etc.)</em></td>
</tr>
<tr class="odd">
<td colspan="2">NOTICE OF READINESS TO LOAD DISCHARGE</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="even">
<td colspan="2">VESSEL ARRIVED IN ROADS</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="odd">
<td colspan="2">MOORED ALONGSIDE</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="even">
<td colspan="2">STARTED BALLAST DISCHARGE</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="odd">
<td colspan="2">FINISHED BALLAST DISCHARGE</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="even">
<td colspan="2">INSPECTED AND READY TO LOAD DISCHARGE</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="odd">
<td colspan="2">CARGO HOSES CONNECTED</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="even">
<td colspan="2">COMMENCED LOADING DISCHARGE</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="odd">
<td colspan="2">STOPPED LOADING DISCHARGING</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="even">
<td colspan="2">RESUMED LOADING DISCHARGING</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="odd">
<td colspan="2">FINISHED LOADING DISCHARGING</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="even">
<td colspan="2">CARGO HOSES REMOVED</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="odd">
<td colspan="2">VESSEL RELEASED BY INSPECTOR</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="even">
<td colspan="2">COMMENCED BUNKERING</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7"></td>
</tr>
<tr class="odd">
<td colspan="2">FINISHED BUNKERING</td>
<td colspan="4"></td>
<td colspan="2"></td>
<td colspan="7">29. COMPANY OR RECEIVING TERMINAL</td>
</tr>
<tr class="even">
<td colspan="2">VESSEL LEFT BERTH <em>(Actual/Estimated)</em></td>
<td colspan="4"></td>
<td colspan="2"></td>
<td
colspan="7"><p>_____________________________________________________</p>
<p><em>(Signature)</em></p></td>
</tr>
<tr class="odd">
<td colspan="6"><p>30. I CERTIFY THAT THE CARGO WAS INSPECTED, ACCEPTED
AND LOADED/ DISCHARGED AS INDICATED HEREON.</p>
<p><em>(Date) (Signature of Authorized Government
Representative)</em></p></td>
<td colspan="9"><p>31. I HEREBY CERTIFY THAT THIS TIME STATEMENT IS
CORRECT.</p>
<p><em>(Master or Agent)</em></p></td>
</tr>
</tbody>
</table>

DD Form 250-1, JAN 90 *Previous editions are obsolete.* 348/051

[]{#IExhibitE .anchor}**EXHIBIT E**

CONTRACT FORM

<table style="width:100%;">
<colgroup>
<col style="width: 11%" />
<col style="width: 12%" />
<col style="width: 6%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 11%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 13%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="3"><strong>ROYALTY OIL EXCHANGE</strong></td>
<td colspan="3"><strong>CONTRACT NUMBER</strong></td>
<td colspan="4" rowspan="2"><p><strong>Page</strong></p>
<p><strong>1 of 1</strong></p></td>
</tr>
<tr class="even">
<td colspan="3"><strong>NEGOTIATED CONTRACT</strong></td>
<td colspan="3"></td>
</tr>
<tr class="odd">
<td colspan="10"><strong>This contract is entered into by and between
the United States of America, hereinafter called the “Government,”
represented by the Contracting Officer executing this contract and the
Contractor below identified. The Government agrees to make available the
Royalty Oil to the Contractor in the location and amount specified below
and the Contractor agrees to provide the Exchange Oil described in
Exhibit B in accordance with the terms and conditions of this
contract.</strong></td>
</tr>
<tr class="even">
<td><p>OIL TYPE/</p>
<p>LOCATION</p></td>
<td>TOTAL BARRELS PER DAY</td>
<td colspan="2">TOTAL CONTRACTED VOLUME</td>
<td>CRUDE OIL Type</td>
<td>“Y”</td>
<td>API GRAVITY</td>
<td>SULFUR % MASS</td>
<td>DELIVERY MODE/ LOCATION</td>
<td>DOE SITES</td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="4"><strong>EXECUTION BY CONTRACTOR</strong></td>
<td colspan="6"><strong>EXECUTION BY GOVERNMENT</strong></td>
</tr>
<tr class="even">
<td colspan="4"><strong>DATE</strong> (Day, Month, Year)</td>
<td colspan="3"><strong>UNITED STATES OF AMERICA</strong></td>
<td colspan="3"><strong>DATE:</strong></td>
</tr>
<tr class="odd">
<td colspan="4"></td>
<td colspan="3"><strong>BY:</strong></td>
<td colspan="3"></td>
</tr>
<tr class="even">
<td colspan="4"></td>
<td colspan="3"></td>
<td colspan="3"></td>
</tr>
<tr class="odd">
<td colspan="4"><strong>NAME OF CONTRACTOR</strong></td>
<td colspan="3"></td>
<td colspan="3"></td>
</tr>
<tr class="even">
<td colspan="4"></td>
<td colspan="3"></td>
<td colspan="3"></td>
</tr>
<tr class="odd">
<td colspan="4"></td>
<td colspan="3"></td>
<td colspan="3"></td>
</tr>
<tr class="even">
<td colspan="4"><strong>ADDRESS</strong> (Street, City, State &amp; Zip
Code) (Type or Print)</td>
<td colspan="3"></td>
<td colspan="3"></td>
</tr>
<tr class="odd">
<td colspan="4"></td>
<td colspan="6" rowspan="13"><p><strong>NAME AND TITLE OF CONTRACTING
OFFICER</strong></p>
<blockquote>
<p><strong><u>______________________________<br />
</u>Contracting Officer<br />
<br />
U. S. Department of Energy<br />
Acquisition and Sales Division</strong></p>
</blockquote></td>
</tr>
<tr class="even">
<td colspan="4"></td>
</tr>
<tr class="odd">
<td colspan="4"></td>
</tr>
<tr class="even">
<td colspan="4"></td>
</tr>
<tr class="odd">
<td colspan="4"><strong>INTERNET ADDRESS</strong></td>
</tr>
<tr class="even">
<td colspan="4"></td>
</tr>
<tr class="odd">
<td colspan="4"></td>
</tr>
<tr class="even">
<td colspan="4"><strong>SIGNATURE AND TITLE OF PERSON AUTHORIZED
TO</strong></td>
</tr>
<tr class="odd">
<td colspan="4"><strong>SIGN THIS CONTRACT</strong> (Type or print name
and title under</td>
</tr>
<tr class="even">
<td colspan="4">Signature)</td>
</tr>
<tr class="odd">
<td colspan="4"></td>
</tr>
<tr class="even">
<td colspan="4"></td>
</tr>
<tr class="odd">
<td colspan="4"></td>
</tr>
</tbody>
</table>

**EXHIBIT F**

[]{#iexhibitf .anchor}**STRATEGIC PETROLEUM RESERVE**

**CRUDE OIL SPECIFICATIONS**

**^(MAY\ 2001)^**a

+-----------------------------+--------+--------+--------------------+
| **CHARACTERISTIC**          | **SOU  | **SWEE | **PRIMARY ASTM**   |
|                             | R^b^** | T^c^** |                    |
|                             |        |        | **TEST METHOD^d^** |
+-----------------------------+--------+--------+--------------------+
| API Gravity \[°API\]        | 30 -   | 30 -   | D 1298 or D 5002   |
|                             | 45     | 45     |                    |
+-----------------------------+--------+--------+--------------------+
| Total Sulfur \[Mass %\],    | 1.99   | 0.50   | D 4294             |
| max.                        |        |        |                    |
+-----------------------------+--------+--------+--------------------+
| Pour Point \[°C\], max.     | 10     | 10     | D 97               |
+-----------------------------+--------+--------+--------------------+
| Salt Content \[Mass %\],    | 0.050  | 0.050  | D 6470             |
| max.                        |        |        |                    |
+-----------------------------+--------+--------+--------------------+
| Viscosity \[cSt @ 15.6°C\], | 32     | 32     | D 445              |
| max.                        |        |        |                    |
|                             | 13     | 13     |                    |
| \[cSt @ 37.8°C\], max.      |        |        |                    |
+-----------------------------+--------+--------+--------------------+
| Reid Vapor Pressure \[kPa @ | 76     | 76     | D 323 or D 5191    |
| 37.8°C\], max.              |        |        |                    |
+-----------------------------+--------+--------+--------------------+
| Total Acid Number \[mg      | 1.00   | 1.00   | D 664              |
| KOH/g\], max.               |        |        |                    |
+-----------------------------+--------+--------+--------------------+
| Water and Sediment \[Vol.   | 1.0    | 1.0    | D 4006 or D4928, & |
| %\], max.                   |        |        | D 473              |
+-----------------------------+--------+--------+--------------------+
| Yields \[Vol. %\]           | 24 -   | 21 -   | D 2892 & D 5236    |
|                             | 30     | 42     |                    |
| Naphtha \[28-191°C\]        |        |        |                    |
|                             | 17 -   | 19 -   |                    |
| Distillate \[191-327°C\]    | 31     | 45     |                    |
|                             |        |        |                    |
| Gas Oil \[327-566°C\]       | 26 -   | 20 -   |                    |
|                             | 38     | 42     |                    |
| Residuum \[\>566°C\]        |        |        |                    |
|                             | 10 -   | 14     |                    |
|                             | 19     | max.   |                    |
+-----------------------------+--------+--------+--------------------+

^3^ This revision changes the primary ASTM methods used for distillation
and determination of sulfur content. It also updates the list of crude
oils meeting these specifications.

^a^Marketable virgin crude petroleum suitable for normal refinery
processing and free of foreign contaminants or chemicals including, but
not limited to, chlorinated and/or oxygenated hydrocarbons, and lead.

^b^ Crude oils that meet these sour specifications include Arabian
Berri, Arabian Light, Bonito Sour, Eugene Island, Flotta, Isthmus,
Lagomedio, Mars, Mesa 30, Olmeca, Oman, Qatar Marine, Russian Export
Blend (Urals), Tia Juana Light, and West Texas Sour.

^c^ Crude oils that meet these sweet specifications include Bonny Light,
Brass River, Brent, Cusiana, Ekofisk, Escravos, Forties, Heavy Louisiana
Sweet, Kole Marine, Light Louisiana Sweet, Nemba, Oseberg, Qua Iboe,
Saharan Blend, Santa Barbara, Statfjord, West Texas Intermediate, and
Zarzaitine.

> NOTE 1: Crude oils other than those listed above may be acceptable.
> The acceptability of any crude oil depends upon an assay typical of
> current production quality of the stream.

NOTE 2: All crude oil shipments received by the SPR are tested to ensure
they meet the above specifications. Should successive shipments fail to
meet these specifications, the stream may be deleted from the list of
approved crude oils.

^d^ Alternate methods may be used if approved by the contracting
officer.

[]{#IExhibitG .anchor}**EXHIBIT G**

**SAMPLE -- OFFER GUARANTEE STANDBY LETTER OF CREDIT**

(NOTE: FORM MAY VARY, SUBSTANCE MAY NOT)

BANK LETTERHEAD

IRREVOCABLE OFFER GUARANTEE STANDBY LETTER OF CREDIT

DATE:

###### TO: Acquisition and Sales Division

**Mail Stop FE-4451**

> **Project Management Office**

**Strategic Petroleum Reserve**

######  U.S. Department of Energy

> **900 Commerce Road East**
>
> **New Orleans, LA 70123**

To the Strategic Petroleum Reserve Exchange Contracting Officer:

By order of our customer we hereby establish in the U.S. Department of
Energy's favor, an irrevocable standby Letter of Credit, Numbered , for
an amount not to exceed U.S. \$ [( )]{.underline} effective immediately
on account of our customer in response to the U.S. Department of
Energy's Solicitation No. [,]{.underline} including any amendments
thereto, for the exchange of Strategic Petroleum Reserve petroleum. This
Letter of Credit expires 30 days from the date of issuance of this
Letter of Credit.

This Letter of Credit is available by wire payment to the U.S.
Department of Energy against presentation of a demand on us of a
manually signed statement (with blanks filled in) containing the
applicable statement:

-   "**This drawing of U.S. \$ [( )]{.underline} against your Letter of
    Credit Numbered dated , is due the U.S. Government because of the
    failure of to honor its offer to enter into a contract for the
    exchange of petroleum from the Strategic Petroleum Reserve, in
    accordance with the U.S. Government's Royalty In Kind Solicitation
    No. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, including any amendments
    thereto.**

-   **This drawing of U.S. \$ [( )]{.underline} against your Letter of
    Credit Numbered\
    dated , is due the U.S. Government because of the failure of\
    to provide acceptable Performance Irrevocable Standby Letter of
    Credit for Contract Number .**

Upon receipt of the U.S. Department of Energy's demand by hand, mail
express delivery, or other means, at our office located at , we will
honor the demand and make payment, by 3 p.m. Eastern Time of the next
business day following receipt of the demand, by either wire transfer of
funds as a deposit to the account of the U.S. treasury over the Fedwire
Deposit System Network, or by electronic funds transfer through the
Automated Clearing House Network, using the Federal Remittance Express
Program. The information to be included in each transfer will be as
provided by the above reference Royalty In Kind Solicitation.

This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision, International Chamber of Commerce
Publication no. 500) and except as may be inconsistent therewith, to the
Uniform Commercial Code in effect on the date of issuance of this Letter
of Credit in the state in which the issuer's head office within the
United States is located.

Address all communications regarding this Letter of Credit to .

Yours truly,

(Authorized Signature)

(Typed Name and Title)

**NOTE: FORM MAY VARY, SUBSTANCE MAY NOT**

[]{#IExhibitH .anchor}**EXHIBIT H**

**SAMPLE -- IRREVOCABLE PERFORMANCE STANDBY LETTER OF CREDIT**

(NOTE: FORM MAY VARY, SUBSTANCE MAY NOT)

BANK LETTERHEAD

IRREVOCABLE PERFORMANCE STANDBY LETTER OF CREDIT

###### TO: U.S. Department of Energy

Strategic Petroleum Reserve

> Project Management Office
>
> 900 Commerce Road East
>
> New Orleans, LA 70123

EFFECTIVE DATE:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

AMOUNT OF LETTER OF CREDIT:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

CONTRACTOR:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

CONTRACT NO:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

LETTER OF CREDIT NO:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Gentlemen:

We hereby establish our "Irrevocable Standby Letter of Credit" in your
favor, available by your draft/s at sight, drawn on ([Name of Bank
issuing this Standby letter of Credit]{.underline}) accompanied by a
manually signed statement that the signer is "an authorized
representative of the Department of Energy", and the following
applicable statement:

-   "I hereby certify that ([Contractor]{.underline}) has failed to
    deliver Exchange Oil in accordance with the terms\
    of Contract Number \_\_\_\_\_\_\_\_\_\_, and as a result owes the
    Government \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

```{=html}
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```
-   "I hereby certify that ([Contractor)]{.underline} has failed to make
    final reconciliation payment in accordance with the terms of
    Contract Number , and as a result owes the Government \$ .

Drafts must be presented for payment on or before the expiration date of
this Letter of Credit, ([Expiration Date]{.underline}), at our bank. The
Government may make multiple drafts against this Letter of Credit.

Upon receipt of the U.S. Department of Energy's demand by hand, mail
express delivery, or other means, at our office located at , we will
honor the demand and make payment, by 3 p.m. Eastern Time of the next
business day following receipt of the demand, by either wire transfer of
funds as a deposit to the account of the U.S. treasury over the Fedwire
Deposit System Network, or by electronic funds transfer through the
Automated Clearing House Network, using the Federal Remittance Express
Program. The information to be included in each transfer will be as
provided by the above reference Royalty In Kind Solicitation.

This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision, International Chamber of Commerce
Publication no. 500) and except as may be inconsistent therewith, to the
Uniform Commercial Code in effect on the date of issuance of this Letter
of Credit in the state in which the issuer's head office within the
United States is located.

We hereby agree with the drawers, endorsers and bona fide holders that
all drafts drawn under and in compliance with the terms of this Letter
of Credit will be duly honored upon presentation and delivery of the
above documents for payment at our bank on or before the expiration
date.

Very truly yours,

(Authorized Signature)

(Typed Name and Title)

**NOTE: FORM MAY VARY, SUBSTANCE MAY NOT**

[]{#IExhibitI .anchor}**EXHIBIT I**

**DIAGRAMS OF DOE FACILITIES**

![](media/image3.jpeg){width="5.995138888888889in"
height="7.684722222222222in"}

[]{#IExhibitJ .anchor}**EXHIBIT J**

**SAMPLE NOVATION AGREEMENT**

The ABC Corporation (Transferor), a corporation duly organized and
existing under the laws of \_\_\_\_\_\_\_\_\_\_ \[insert State\] with
its principal office in \_\_\_\_\_\_\_\_\_\_\_\_ \[insert city\]; the
XYZ Corporation (Transferee), \[if appropriate add "formerly known as \]
a corporation duly organized and existing under the laws of
\_\_\_\_\_\_\_\_\_ \[insert State\] with its principal office in
\_\_\_\_\_\_\_\_\_\_\_\_ \[insert city\]; and the United States of
America (Government) enter into this Agreement as of
\_\_\_\_\_\_\_\_\_\_\_\_ \[insert the date transfer of assets became
effective under applicable State law\].

\(a\) The parties agree to the following facts:

> \(1\) The Government, represented by various Contracting Officers of
> the \_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert name(s) of agency(ies)\],
> has entered into certain contracts with the Transferor, namely:
> \_\_\_\_\_\_\_\_\_\_\_\_ \[insert contract or purchase order
> identifications\]; \[or delete "namely" and insert "as shown in the
> attached list marked \`Exhibit A' and incorporated in this Agreement
> by reference.''\]. The term "the contracts," as used in this
> Agreement, means the above contracts and purchase orders and all other
> contracts and purchase orders, including all modifications, made
> between the Government and the Transferor before the effective date of
> this Agreement (whether or not performance and payment have been
> completed and releases executed if the Government or the Transferor
> has any remaining rights, duties, or obligations under these contracts
> and purchase orders). Included in the term "the contracts" are also
> all modifications made under the terms and conditions of these
> contracts and purchase orders between the Government and the
> Transferee, on or after the effective date of this Agreement.
>
> \(2\) As of \_\_\_\_\_\_\_\_\_\_\_\_, 20\_\_, the Transferor has
> transferred to the Transferee all the assets of the Transferor by
> virtue of a \_\_\_\_\_\_\_\_\_\_ \[insert term descriptive of the
> legal transaction involved\] between the Transferor and the
> Transferee.
>
> \(3\) The Transferee has acquired all the assets of the Transferor by
> virtue of the above transfer.
>
> \(4\) The Transferee has assumed all obligations and liabilities of
> the Transferor under the contracts by virtue of the above transfer.
>
> \(5\) The Transferee is in a position to fully perform all obligations
> that may exist under the contracts.
>
> \(6\) It is consistent with the Government's interest to recognize the
> Transferee as the successor party to the contracts.
>
> \(7\) Evidence of the above transfer has been filed with the
> Government.

\(b\) In consideration of these facts, the parties agree that by this
Agreement\--

> \(1\) The Transferor confirms the transfer to the Transferee, and
> waives any claims and rights against the Government that it now has or
> may have in the future in connection with the contracts.
>
> \(2\) The Transferee agrees to be bound by and to perform each
> contract in accordance with the conditions contained in the contracts.
> The Transferee also assumes all obligations and liabilities of, and
> all claims against, the Transferor under the contracts as if the
> Transferee were the original party to the contracts.
>
> \(3\) The Transferee ratifies all previous actions taken by the
> Transferor with respect to the contracts, with the same force and
> effect as if the action had been taken by the Transferee.
>
> \(4\) The Government recognizes the Transferee as the Transferor's
> successor in interest in and to the contracts. The Transferee by this
> Agreement becomes entitled to all rights, titles, and interests of the
> Transferor in and to the contracts as if the Transferee were the
> original party to the contracts. Following the effective date of this
> Agreement, the term "Contractor," as used in the contracts, shall
> refer to the Transferee.
>
> \(5\) Except as expressly provided in this Agreement, nothing in it
> shall be construed as a waiver of any rights of the Government against
> the Transferor.
>
> \(6\) All payments and reimbursements previously made by the
> Government to the Transferor, and all other previous actions taken by
> the Government under the contracts, shall be considered to have
> discharged those parts of the Government's obligations under the
> contracts. All payments and reimbursements made by the Government
> after the date of this Agreement in the name of or to the Transferor
> shall have the same force and effect as if made to the Transferee, and
> shall constitute a complete discharge of the Government's obligations
> under the contracts, to the extent of the amounts paid or reimbursed.
>
> \(7\) The Transferor and the Transferee agree that the Government is
> not obligated to pay or reimburse either of them for, or otherwise
> give effect to, any costs, taxes, or other expenses, or any related
> increases, directly or indirectly arising out of or resulting from the
> transfer or this Agreement, other than those that the Government in
> the absence of this transfer or Agreement would have been obligated to
> pay or reimburse under the terms of the contracts.
>
> \(8\) The Transferor guarantees payment of all liabilities and the
> performance of all obligations that the Transferee\--
>
> \(i\) Assumes under this Agreement; or
>
> \(ii\) May undertake in the future should these contracts be modified
> under their terms and conditions. The Transferor waives notice of, and
> consents to, any such future modifications.
>
> \(9\) The contracts shall remain in full force and effect, except as
> modified by this Agreement. Each party has executed this Agreement as
> of the day and year first above written.

ABC Corporation,

By
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Corporate Seal\]

XYZ Corporation,

By\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Corporate Seal\]

Certificate

I, \_\_\_\_\_\_\_\_\_\_\_, certify that I am the Secretary of ABC
Corporation, that \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, who signed this
Agreement for this corporation, was then \_\_\_\_\_\_\_\_\_\_\_\_\_ of
this corporation; and that this Agreement was duly signed for and on
behalf of this corporation by authority of its governing body and within
the scope of its corporate powers. Witness my hand and the seal of this
corporation this day of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 20
\_\_\_\_.

By
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Corporate Seal\]

Certificate

I, \_\_\_\_\_\_\_\_\_\_\_\_, certify that I am the Secretary of XYZ
Corporation, that \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, who signed this
Agreement for this corporation, was then \_\_\_\_\_\_\_\_\_\_\_\_\_ of
this corporation; and that this Agreement was duly signed for and on
behalf of this corporation by authority of its governing body and within
the scope of its corporate powers. Witness my hand and the seal of this
corporation this day of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_20\_\_\_.

By
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

[]{#IExhibitK .anchor}**EXHIBIT K**

CARGO PREFERENCE ACT

Ocean shipments of crude oil for the SPR are generally subject to the
requirements of the Cargo Preference Act, [as amended,]{.underline} Pub.
L. No. 83-664, 68 Stat. 832, 46 U.S.C. § 1241(b). The Act provides in
pertinent part that:

> Whenever the United States shall procure, contract for, or otherwise
> obtain for its own account, or shall furnish to or for the account of
> any foreign nation without provision for reimbursement, any equipment,
> materials, or commodities, within or without the United States, or
> shall advance funds or credits or guarantee the convertibility of
> foreign currencies in connection with the furnishing of such
> equipment, materials, or commodities, the appropriate agency or
> agencies shall take such steps as may be necessary and practicable to
> assure that at least 50 percentum of the gross tonnage of such
> equipment, materials, or commodities . . . which may be transported on
> ocean vessels shall be transported on privately owned United
> States-flag commercial vessels, to the extent such vessels are
> available at fair and reasonable rates for United States-flag
> commercial vessels, in such manner as will insure a fair and
> reasonable participation of United States-flag commercial vessels in
> such cargoes by geographic areas.

# Thus, the Cargo Preference Act requires DOE to take "such steps as may be necessary and practicable to assure that at least 50%" of oil for the SPR that is transported on ocean vessels be transported on United States flag-commercial *(sic)* vessels, if such vessels are available at fair and reasonable rates for United States-flag commercial vessels.

[Source]{.underline}: U.S. Department of Justice, Office of Legal
Counsel, Office of the Assistant Attorney General, "MEMORANDUM FOR
ELIZABETH H. DOLE Secretary of Transportation and DONALD P. HODEL
Secretary of Energy, Re: Applicability of the Cargo Preference Act to
the Transportation of Alaskan Oil to the Strategic Petroleum Reserve,"
September 15, 1983.