June 2, 1994

 NOTICE TO THE TRADE 

TO: ALL STEAMSHIP COMPANIES AND AGENCIES OFFERING OCEAN RATES/SERVICE

 TO THE KANSAS CITY COMMODITY OFFICE 

This notice supersedes the notice issued September 1991 and all 

subsequent revisions concerning procedures for the submission and use of 

information regarding ocean transportation rates and service. 

Regulations of the Department of Agriculture governing the procurement 

of agricultural commodities for the Title II, P.L. 480 program (7 CFR 

Part 1497) set forth the criteria to be considered by the Commodity 

Credit Corporation (CCC) in awarding contracts. In general, procurement 

decisions are based upon the lowest total cost to deliver commodities to 

the foreign discharge port, referred to as the "lowest landed cost." In 

its procurement decisions, however, CCC is also permitted to consider 

other factors which affect service to the program. These factors 

include (1) availability of ocean service, (2) adequacy of service, (3) 

port performance, and (4) transit time. 

The purpose of this notice is to state the policies and standards which 

the Kansas City Commodity Office (KCCO) will use to apply the criteria 

stated in 7 CFR Part 1496. In addition, this notice requires agencies 

which represent steamship companies to submit certain information to 

KCCO and also restates the manner in which carriers should submit rate 

quotations and service offers. 

ELIGIBILITY 

Steamship lines not currently participating in the KCCO export programs 

should notify KCCO, Traffic Management Division, 816-926-6043, a minimum 

of 10 days prior to the submission of an offer. Prior to submitting 

service and tariff rates, first-time offerors must have previously 

submitted a completed "Solicitation Mailing List Application," Standard 

Form 129 (Enclosure 1). KCCO reserves the right to require additional 

evidence of the financial and operational responsibility of an offeror 

before offers are considered. 

CCC will, as a matter of policy, follow the principles of the Federal 

Acquisition Regulation (FAR) to the extent possible and practicable in 

evaluating the offers of rates and service submitted to KCCO. Part 9 of 

the FAR requires a determination that a prospective offeror is 

responsible and meets the minimum standards specified therein. To be 

determined responsible, a prospective offeror must

 have a satisfactory performance record

 have a satisfactory record of integrity and business ethics

 have adequate financial resources

 be able to comply with the required or proposed delivery or

 performance schedule, taking into consideration all existing

 commercial and governmental business commitments. 

For KCCO to make this determination, the steamship company may be 

required to demonstrate the capability to service all trade routes 

offered. That is, the carrier may be requested to provide, for each 

trade route offered, a description of service to include a list of 

assets, the capacities of those assets, the port rotation of those 

assets, the frequency of service, and a history of performance on those 

trade routes. The carrier should note any limitations, and the reasons 

therefor, of the described service assets for each trade route. The 
steamship company may also be required to send KCCO a list of vessel 

names. 

KCCO reserves the right to exclude offers from consideration when it 

determines that the technical capability to serve the route is 

deficient. Failure to comply with any of the requirements will also be 

grounds for a determination of nonresponsiblity. 

The offeror shall, upon request, promptly furnish KCCO with a current, 

certified financial statement and such other data as KCCO may request 

with respect to the offeror's operations. KCCO will use this 

information to determine the offeror's financial responsibility and 

ability to perform. Failure of an offeror to comply with a request for 

such information could render the offeror ineligible on the grounds that 

the responsibility of the offeror has not been established. 

KCCO reserves the right to require an offeror to post financial coverage 

acceptable to KCCO equal to the amount of any cargo loss or damage claim 

settlements which are more than 90 days old and/or claims which have 

been outstanding over six months. Failure to post acceptable financial 

coverage when requested will make the steamship company ineligible for 

the bid evaluation process. 

An offeror which KCCO determines is deficient in contract performance 

shall be presumed to be nonresponsible unless KCCO determines that the 

circumstances were beyond the offeror's control or that the offeror is 

taking appropriate corrective action. 

Agencies representing steamship companies must forward a signed copy of 

the agency agreement with each steamship company which they wish to 

represent in the bid evaluation process. 

Existing or proposed tariff rates will be used in the evaluation 

process. Proposed changes to tariff rates will be accepted by facsimile 

# 816-926-6767 up to the cutoff time stated in the monthly invitation. 

SUBMISSION OF OFFERS 

KCCO has developed a universal form that steamship companies must 

utilize when offering rates and service effective with the next 

invitation. KC-324, Steamship Line Service Offer Form (Enclosure 2) is 

currently available upon request on 3«" or 5¬" diskette for WordPerfect 

5.1 for DOS, WordPerfect 6.0 for Windows, or hard copy. Offers 

submitted using any other format will be considered nonresponsive. 

Offers must contain the following information: 

1. Any steamship rates or rate changes must be shown in rates per

 metric ton, carried out to two decimal places (for example,

 $125.00/MT). The commodity will be placed either f.a.s. vessel,

 intermodal vendor's plant, or bridge point in accordance with the

 applicable invitation. All offers must identify the "ocean

 transportation" portion of an all inclusive rate. Any offers

 submitted without the ocean transportation separated from the other

 costs will be considered nonresponsive. 

2. Offerors must certify that each offer or change will be the

 applicable rate in effect at the time of lifting. After cargo is

 booked, rates must be filed in accordance with Federal Maritime

 Commission (FMC) regulations. 

3. Offers must include all destination ports served, including out 
 ports. Offers which designate only the destination country without

 discharge port identification will not be considered. A list of

 destination countries and discharge ports which currently receive

 donated food commodities is enclosed (Enclosure 3). In addition,

 each commodity purchase invitation will list the specific

 destination ports for each request. 

4. Offers must include specific U.S. ports served, including the ports

 through which intermodal shipments will move. 

5. Incremental prices based on quantity will not be accepted. Minimum

 and maximum tonnage requirements will be accepted. Quotations

 should be made only to those load ports, intermodal points, and

 bridge points listed on the enclosed Form KC-362 (Enclosure 4). 

6. Offers combining noncontiguous coastal ranges to achieve a minimum

 tonnage will not be considered. Offers combining trade routes to

 meet a minimum tonnage will not be considered.

 KCCO'S ESTABLISHED TRADE ROUTES ARE 

Red Sea

 Djibouti

 Eritrea

 Ethiopia

 Iraq

 Jordan

 Somalia

 Sudan

 Yeman 

South/East Asia

 Afghanistan

 Bangladesh

 Bhutan

 India

 Mongolia

 Nepal

 Pakistan 

Central America

 Costa Rica

 Dominican Republic

 El Salvador

 Guatemala

 Haiti

 Honduras

 Jamaica

 Mexico

 Nicaragua

 Panama 

South America

 Bolivia

 Brazil

 Colombia

 Ecuador

 Guyana

 Paraguay

 Peru 
East Indies

 Indonesia

 Philippines

 Thailand 

Mediterranean

 Albania

 Azerbaijan

 Balkans

 Bosnia

 Croatia

 Egypt

 Jordan WB

 Macedonia

 Morocco

 Syria

 Tunisia 

Europe

 Armenia

 Belarus

 Bulgaria

 Georgia

 Kazakhstan

 Kyrgyzstan

 Moldova

 Poland

 Romania

 Russia

 Russian Fed

 Slovenia

 Tajikistan

 Turkmenistan

 Ukraine

 Uzbekistan West Africa

 Angola

 Benin

 Burkina

 Faso

 Cameroon

 Cape Verde

 Cen Afr Republic

 Chad

 Congo

 Gambia

 Ghana

 Guinea

 Guinea Bissau

 Ivory Coast

 Liberia

 Mali

 Mauritania

 Namibia

 Niger

 Sao Tome

 Senegal

 Sierra Leone

 Togo 

South/East Africa 
 Botswana

 Burundi

 Comoros

 Kenya

 Lesotho

 Madagascar

 Malawi

 Mauritius

 Mozambique

 Rwanda

 Somalia

 Swaziland

 Tanzania

 Uganda

 Zambia

 Zimbabwe 

7. To be considered, service must be advertised in the Florida

 Shipper, Journal of Commerce, Pacific Shipper, or Shipping Digest.

 Offers received must reference the trade publication in which ocean

 service is advertised, the date of issue, page numbers or ship card

 number. Published service must clearly indicate whether the

 service is direct (U.S. flag or foreign flag). All offers must

 also clearly indicate whether the shipment will be transshipped

 and, if so, whether by U.S. flag or foreign flag vessel.

 Regular sailings will be monitored against published service to

 assure that schedules are met. Failure to maintain stated schedules

 may result in the offeror being determined to be nonresponsible for

 future commodity purchase evaluations. 

Offers must be received in KCCO by the time specified in the invitation. 

Evaluation will be made on the basis of prices offered by commodity 

vendors, plus the applicable ocean rates. Contract awards to suppliers 

of products will be made on the basis of the lowest landed cost at the 

foreign destination, after considering cargo preference and other 

requirements. The use of a specific freight rate in determining 

commodity vendor awards does not constitute a contract with that 

carrier. However, the ocean rates used in the evaluation are given to 

the designated booking agent for use in making ocean transportation 

bookings. 

Any questions may be directed to the Export Operations Management 

Division, 

Branch, Gary Marsden 816-926-6043, or Patty Jennings 816-926-6304. 

Norman D. Houser, Director 

Kansas City Commodity Office 

4 Enclosures: 

Standard Form 129 (Solicitation Mailing List Application) 

KC-324 (Steamship Line Service Offer Form) 

List of Destinations 

KC-362 (Standard Abbreviations)