DRMS CONTRACT NUMBER 99-4001-0004
Supplemental Agreement 5
Page 5 of 5

vi. Date of removal
vii. Date of destruction

viii. Certifiers Name (GL)
Report shall contain copies of the certificates of destruction. Certificate of

destruction will be provided for every removal.
d. Monthly report identifying contracts with outstanding certificates of

destruction.

9. Calculations for DRMS and Contractor net worth allocations outlined in sections 5
and 6 above shall commence on the 1 day of the month following execution of this

modification.

10. All existing terms and conditions including Supplemental Agreements 1-4 remain in
effect.

//11/11/1/NOTHING FOLLOWS//////////


DRMS CONTRACT NUMBER 99-4001-0004
Supplemental Agreement 5
Page 4 of 5

d. Military markings and data plates identified on residue must be removed and
destroyed beyond recognition.

e. Parts removal to any degree is strictly forbidden.

f. The Purchaser will be required to process 100,000 Ibs of metallic material per
day and 30,000 Ibs of non-metallic material per day or a minimum of 6 hours
of shredding per day as quantities warrant.

g. The processing locations must provide a secure area at their facility in the
event that the property cannot be destroyed the day it arrives.

h. GL will provide an Operational Plan which identifies the capability to
accomplish destruction as described above.

5. Part II, Article Sixteen, Section 3, “Calculate Net Worth Allocations,” shall be
amended as followed:

Section 3(A), “Calculate Contractor Net Worth Allocation,” change to read,

“Purchaser shall calculate the amount of the ‘Contractor Net Worth Allocation’ as
Operating Net Worth multiplied by 23%

6. Section 3(B), “Calculate DRMS Net Worth Allocation,” change to read,

“Purchaser shall calculate the amount of the ‘DRMS Net Worth Allocation’ as
Operating Net Worth multiplied by 75.2%.

Section 3(C), “Calculate KGP Net Worth Allocation,” shall remain the same.
7. Mutilation Timeline:

a. Implement new mutilation requirements in all spot sales and new term
contract offerings — 30 days after effective date of modification

b. Implement new mutilation requirements in all existing term contracts or
offer new term contracts with the mutilation requirements — 120 days after
effective date of modification

8. Reports
a. Provide a monthly report NLT 15 days after the end of the month all
completed certificates of destruction in Microsoft excel format. Separate
worksheets shall be kept for term sales and spot sales.
b. Report shall include the following information:
1 Sale & Lot Number
ii, Buyers name
ii, Property sales location
iv. Type of Property
v. Weight


May 20 07 09:06a p-2
05/18/2007 09:59 FAX 269961528. DRMS @oo2

SALE OF GOVERNMENT PROPERTY
AMENDMENT OF INVITATION FOR BIDS/MODIFICATION OF CONTRACT

7. AMENDMENT TO INVITATION FOR BIDS NO.: 99-4001-0004 2. EFFECTIVE ATE IpaGe 1 OF 5 PAGES
SUPPLEMENTAL AGREEMENT NO? 5 | ?
3 1SSUED BY [Sc NAME AND AGORESS WHERE BIOS ARE RECEIVED
DEFENSE REUTILIZATION AND MARKETING SERVICE DEFENSE REUTILIZATION AND MARKETING SERVICE
ATTN: DRMS-BBS ATTN: DRMS-BBS
74 WASHINGTON AVE. N. 74 WASHINGTON AVE. N,
BATTLE CREEK, MI 49017-3092 i BATTLE CREEK, MI 49017-3092
5. [JAMeNomENT OF INVITATION FOR BIDS NO. (Sse tem /DATED MODIFICATION OF CONTRACT NO. (See /tem 8) DATED
6) }
994001-0004 03/28/07

6. THIS BLOCK APPLIES ONLY TO AMENDMENTS OF INVITATIONS FOR BIDS

The above numbered invitation for bids is amended as st forth in Item 9. Bidders must aknowledge receipt of this amendment
unless indicated otherwise in item 71 prior to the hour and date specified in the invitation for bids, or as amended, by one of the
following msthods:

(a) By signing and returning copies of this amendment: 7

{b) By acknowledging receipt of this amendment on each copy of tha bid submitted; or

ic) 8y separate letter or telegram which Includes a reference to the invitation for bids and emendment number.

FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE ISSUING OFFICE PRIOR TO THE HOUR AND DATE SPECIFIED
MAY RESULT IN REJECTION OF YOUR BID. If by virtue of this amandment you desire to change a bid already submitted, such
change may be made by telegram or letter, provided such telegram or letter makes reference to the invitation for bids and this
amendment, and is received prior to the opening hour and date specified

7. ACCOUNTING AND APPROPRIATION DATA Uf requieal

3. THIS APPLIES ONLY TO MODIFICATION OF CONTRACTS
‘This Suoplemoncel Agreement is entered into pursuant to sutharity of

MUTUAL AGREEMENT

¥. DESCRIPTION OF AMENDMENT MODIFICATION [except as provided below all tems and conditions of the document referenced in Irem 5 remein ta full Yorce and effect)

Whereas Contract 99-4001-0004 was entered into on June 9, 2005 by and between the United States of America, hereinafter referred to as
the Government and Liquidity Services, Inc. hereinafter referred to as the contractor, and DOD Surplus, LLC formed by the contractor to
serve as the entity that processes DRMS assets, bereinafter referred to as the Purchaser, and Whereas the contract involved the follow item
in Invitation for Bid 99-4001:

0001: All serap material located in the continents] United States (other than Tennessee and the Carolinas) and in Alsska that is
demilitarization code A, B, E, or Q or thatis subject to demilitarization as a condition of sale other than material and items in the list of
excluded SCLs and FSCs set forth in Part [V. Contract performance is 7 years with three oue year renewal option periods.

THE HOUR AND DATE FOR SecEIPT a BINS [7] IS NOT EXTENDED, EE] eerrerceo unr. orcLock “
(LOCAL TIME! DATE
10. BIODER/PURCHASE NAWE AND ADDRESS (imchiwe 21> Couey |? EL] sober is NOT REGUiAEO To SIGN THIS COGUMENT
DOD Surplus, LLC |
|

15051 N. Kierland Bivd. Third Floor } v4] PURCHASER |S REQUIRED TO SIGN THIS DOCUMENT AND RETURN
Scottsdale, AZ 85254 | crisivgnano J copies To THs ssuiNG OFFICE

12. SIGNATURE FOR BIDOER/PURCHAS ER

TS. NAME AND TITLE OF SIGNER [Tyne or print) |¥4. DATE SIGNED 16, NAME OF CONTRACTING OFFICER /? ype or print) 717. DATE SIGNED
.
Thy An vA —Qi~o me fe Z
mes B bye, Presiden ex: GREGORY 5. ORTIZ SPape7
AUTHORIZED FOR LOCAL REPROOUCTION -
Prowone edilcn woe Ricctoed by can youn fat Comp To tas.3,


DRMS CONTRACT NUMBER 99-4001-0004
Supplemental Agreement 5
Page 2 of 5

WHEREAS, the Defense Reutilization and Marketing Service (“DRMS”) requires that
property being sold as scrap material receive increased scrutiny to ensure that mutilation is
being performed in accordance with the requirements of this sales contract; and

WHEREAS, in order to effectively scrutinize the mutilation of property that presents a risk
of release in its useable configuration to the public, while maintaining an efficient flow of
saleable scrap material that represents lower risk, and where mutilation is not critical to its

sale;

NOW, THEREFORE, it is mutually agreed between the two parties hereto to this
modification that:

1. Part II, Section V, “Demil “B” and “Q” Property,” shall be amended as follows:

Third paragraph shall be deleted in its entirety and replaced with the following
paragraph:

All Property offered under this contract including DEMIL Code “A” property,
requires Mutilation, (destructively scrapping in a manner that prevents recognition or
reconstruction of the original item and sub components) unless specifically excluded
from Mutilation by the Government. Property generally excluded from Mutilation
requirement includes: Demil code “A” vehicles, tires, lockers, ammunition cans,
production stock/residue (bars, plate rod, wire, borings and turnings), wire and
cable, pipe and tube construction material/residue (lumber, block, brick, windows, I-
beams), wood products, furniture and white goods (appliances, e.g., refrigerators)
The Purchaser may request from the SCO that other property be excluded from the
Mutilation requirement. DRMS will evaluate such requests in the exercise of its sole
discretion. Mutilation is not required for scrap material generated from Puget Sound
Naval Shipyard and CDC Texarkana, TX, as this scrap is already mutilated prior to
referral to the Purchaser. In instances where scrap is not mutilated at these locations
ptior to release under the SV contract, mutilation will be required.

8" paragraph shall be deleted in its entirety and replaced with the following
paragraph:

If the material (Demil “A”, “B” and “Q “ Property) has not been mutilated before
re-sale, the Purchaser will either perform the mutilation at the DRMO or witness
mutilation by the re-sale buyer and attest to the mutilation by signing as a witness to
the mutilation process on the Certificate of Destruction. The Purchaser’s reasonable
costs associated with verifying the destructive scrapping shall be submitted as seller
indirect costs.


DRMS CONTRACT NUMBER 99-4001-0004
Supplemental Agreement 5
Page 3 of 5

2. Part VI, Article Seven, Section 5, Part C(1) shall be amended as follows:
Delete paragraph in its entirety and replace with the following paragraph:

For MLI and CCLI (ie. DEMIL “B” and “Q”) Property not mutilated by the
Purchaser, the Purchaser shall promulgate in all re-sale advertisements and catalogs,
as well as in the terms and conditions of sale, a notice to prospective buyers that the
terms will require export permits. The wording of such notice shall be approved in
advance by DRMS in the exercise of its sole discretions. Before releasing a particular
item of DEMIL “B” or “Q” Property to a prospective re-sale buyer, (i) Purchaser
shall obtain a completed EUC from such buyer for each lot (or group of lots at a
single re-sale event) of such Property and furnish a copy thereof to DRMS, (ii)
Purchaser shall confirm with DRMS through the SCO that such buyer is cleared for
the purchase of DEMIL “B” and “Q” items. Purchaser shall promulgate in all re-sale
advertisements and catalogs, as well as in the terms and conditions of sale, a notice to
prospective buyers that the terms will require mutilation of material not excluded
from the mutilation requirement. The Purchaser will either perform the mutilation
at the DRMO, or witness the re-sale buyet’s mutilation process and attest to the
mutilation by signing as a witness to the mutilation process on the Certificate of
Destruction for every removal.

3, Purchaser shall promulgate in all sales advertisements and catalogs, as well as in the
terms and conditions of sale, a notice to prospective buyers that the Government has
the right to Surveillance to allow Government personnel to accompany GL
personnel in the performance of witnessing and attesting to the mutilation process
performed at the re-sale Buyer’s facility.

4. Government personnel will witness and attest to the Mutilation of all scrap received,
and provided under this contract identified as Standard Waste and Scrap
Classification (SCL) Codes MUT, MFS and CSI. All SCL Codes MUT, MFS, and
CSI will be destroyed at no more than two locations in CONUS with the
requirements listed below. The Government reserves the rights to inspect and
approve the locations identified by GL to process these scrap codes to ensure the
processing requirements can be met. The DRMOs will be provided instructions to

ship this property to the approved locations.

a. Material will be completely destroyed using a process that will input items up
to 8’ foot X 8 foot in size and result in residue not to exceed 4 inches X 4
inches in size. Automated size reduction prior to shredding is allowed.

b. End items whose original size is smaller than 4 inches X 4 inches must be
destroyed beyond recognition and destroyed so that it cannot be used for its
original intended purpose.

c. For special type items (ve., material hardness and thickness) which cannot be
destroyed in the manner prescribed above, the degree and method of
destruction will then be prescribed by a government representative.