SUPPLY OF NO. 2 LAND DIESEL FUEL

Transcription

1 AMERICAN SAMOA POWER AUTHORITY OFFICE OF PROCUREMENT INVITATION FOR BID SUPPLY OF NO. 2 LAND DIESEL FUEL July 24, 2007 IFB NO. 2007GEN1009 ANDRA SAMOA Chief Executive Officer - 1 -

2 SIGNIFICANT DATES The following are the significant dates for the IFB and the Anticipated Contract and Scheduling Dates: July 24, Bid Advertisement August 13, 2007 Deadline for submitting questions/inquiries/clarifications August 24, 2007 Issue addendums to address questions and or clarifications as necessary. September 7, 2007 Closing Date p.m.american Samoa time) September 10, Procurement to review bids for completion & compliance September 11, Source Evaluation Board (SEB) 1 st meeting to review bids September 14, SEB submit recommendations to CEO September 19, CEO submit recommendation to Board for review, approval and final Decision September 24,2007 Inform Successful Bidder September 26, Contract Award September 28, Issue Notice to Proceed (send to Supplier) October 1, Contract commencement and execution - 2 -

3

4 AMERICAN SAMOA POWER AUTHORITY GENERAL TERMS AND CONDITIONS IFB NO. 2007GEN1009 SUPPLY OF NO. 2 LAND DIESEL FUEL I. BACKGROUND: ASPA has five power stations in American Samoa on the Islands of Tutuila, Tau, Ofu and Olosega and Aunu u. Two of the Authority s main power stations are on the island of Tutuila in the villages of Tafuna and Satala. ASPA s main power producer is a BV 12 M640 Deutz diesel engine. Before the installation of the first Deutz model back in 1992, ASPA had other engine types and models that were main power producers, and were all diesel operated, such as EMD, Nordberg, Caterpillar and White Superior units. With the change in modern engine efficiencies, technology and the rising cost of fuel, the old models were gradually replaced with the Deutz engine. The fuel has been the only fuel type used on all these generators. Eight Deutz generators make up both the Tafuna and Satala power plants including four (4) 3516 Caterpillar and 2 EMD engines that are still in operation and used as Black Start and load peaking units. Three (3) Volvo 320KW diesel engines were installed in Manu a (Ta u/faleasao power plant (2006)) and replaced the old White Superior models after the 2005 Hurricane. There are two (2) White Superior diesel engines that provide power for Ofu and Olosega islands. On the island of Aunu u, power is provided by two (2) 3208 Caterpillar diesel generators, 85 Olympian Genset. All heavy equipment, including trucks and machinery, that is diesel operated is fueled from the ASPA Tafuna compound from a 100,000 gallons storage tank. II. AUTHORITY: ASPA Procurement Rules provides that all transactions involving purchases or contracting for materials, supplies, equipment, public works, improvements, and other services where the estimated cost is more than $35,000, shall be made only after issuance of formal specifications and solicitation of sealed bids. III. SCOPE OF WORK: The bidder shall faithfully and competently perform the duties set forth in this section and in the Contract Documents. The fuel shall meet all American Samoa Government ( ASG ) statutory and regulatory standards. In addition, the fuel shall meet all the following specifications: (A) Delivery. The winning supplier (the Supplier ) must supply No. 2 land diesel fuel which shall meet all specifications set forth herein, and deliver the same, using proper fuel tank trucks, to ASPA s power plants in Tafuna and Satala, at all times of the day, every day of the week, on a seven day 24 hour basis as required by ASPA. The Supplier shall also deliver the fuel, using proper fuel tank trucks, to the Fagatogo fuel dock for the purpose of loading the fuel on a vessel or vessels for shipment to the islands of Manu a. (B) Shortfalls. In the event of occasional shortfalls of supplies, even when any other fuel supplier has used good faith efforts to maintain sufficient inventories of their supply, Supplier agrees to supply the difference. (C) API Gravity. The fuel shall contain an API gravity not to exceed 35. In order to verify the API gravity, for each shipment ASPA will either: (1) test the Supplier s delivered fuel, or (2) rely upon the Office of Petroleum Management s ( OPM ) required Supplier certified fuel specifications. In the event that any certified specifications or tests exceed 35, ASPA will assess a penalty to the Supplier (the API Penalty ). The API Penalty methodology is set forth in Attachment B, which is incorporated by reference as if fully set forth herein

5 (D) Sulfur Content. The fuel shall not exceed a maximum 12 month rolling average of 0.2% sulfur content, with no single delivery to exceed 0.4% (the Sulfur Maximums ). In order to verify the sulfur content, for each shipment ASPA will either (1) test the Supplier s delivered fuel, or (2) rely upon the OPM required Supplier certified fuel specifications. In the event that the Supplier s fuel exceeds the Sulfur Maximums and as a result, the American Samoa or United States Environmental Protection Agency ( EPA ) assesses a fine or penalty against ASPA, the Supplier agrees that ASPA may deduct the amount of the fine or penalty from the cost of subsequent fuel deliveries at ASPA s sole discretion. (E) Quantity. It is estimated that the Supplier will deliver approximately 12,500,000 gallons of fuel over the term of the Contract. (F) Quantity Measurement. The quantity of fuel delivered shall be determined by the temperature compensated fuel meter at the Gataivai Tank Farm fuel loading bay. Volume and specifications shall be corrected to 60 degrees Fahrenheit in accordance with the latest ASTM IP Petroleum Measurement Tables. Additionally, ASPA may verify the fuel delivered by the Supplier s tank truck to ASPA power plants by ASPA fuel meters installed at the power plants. In the event that the Loading Bay reading materially differs from the power plant reading, the power plant reading shall control for purposes of the Supplier s invoice to ASPA. In the event a control decision is made by ASPA, Supplier is entitled to audit ASPA s measurement system employed in the power plant reading. The temperature compensated fuel meter at the loading bay shall be tested at regular intervals for sustaining specifications pursuant to industry acceptable practices, but not to exceed a one year period between testing. The Supplier and/or Gataivai Tank Farm operator shall provide ASPA with Certification of Accuracy and Proof of Recalibration of meters before this Contract is officially given the authorization to proceed. The failure of Supplier to provide the aforementioned documents constitutes a material breach of this Agreement under the section entitled Termination for Default. ASPA will witness the annual testing of this meter. (G) Random Testing. In addition to the above testing requirements, ASPA reserves the right to test all fuel delivered by the Supplier at random intervals. Such tests may consist of, but are not limited to, a visual examination or other tests upon the time of delivery. (H) Right to Reject. If any ASPA conducted test or Supplier certified specifications evidences that the supplied Fuel does not comply with American Samoa Government statutory and regulatory standards, is contaminated, or otherwise does not meet the specifications above, ASPA has the right to reject or dispose of the fuel in its entirety. If ASPA rejects or disposes of any fuel in accordance with this subsection, ASPA may notify the American Samoa Government Office of Petroleum Management ( OPM ) to conduct an independent, review of the fuel specifications. Should the OPM confirm ASPA s findings, the Supplier shall be responsible for all ASPA related costs, including but not limited to, clean up, damages to equipment, and replacement of sub standard or lost fuel, a cost. The Supplier shall be financially responsible for the proper re cycling of any rejected fuel. ASPA shall have the right to properly dispose of any sub standard fuel in stock and recoup all costs related therewith from the Supplier. (I) Security. If Supplier demands any securities at any time during the course of the Contract, ASPA agrees to pledge, as security for its obligations under the Contract, securities in a manner and form agreed to between ASPA and the Supplier in a separate writing. Security shall not include any fixed assets or equipment of ASPA

6 IV. PRE BID QUESTIONS: Any pre bid questions and/or clarifications shall be submitted to the Procurement Manager in writing (through electronic mail or hard copy) prior to the closing date set forth above. Questions and/or clarifications are welcome and should be submitted ten (10) calendar days prior to the bid closing. ASPA shall issue addenda to address any questions and/or clarifications as necessary. V. CONTRACT TERM: The Supplier shall commence performance of this Contract on October 1, 2007 and complete performance hereunder on September 30, VI. TYPE OF CONTRACT: This IFB may be awarded in two separate contracts, with the winning bidder providing the largest portion of ASPA s fuel requirements and one or more other suppliers providing the remainder, as set forth below. Supplier(s) will be expected to sign a supply contract. ASPA shall award the supply of approximately two thirds (2/3) of ASPA s estimated total annual diesel fuel requirement to the bidder that offers the highest cents per gallon discount from the Office of Petroleum Management ( OPM ) Maximum Allowable Price ( MAP ). ASPA shall award approximately one third (1/3) of ASPA s estimated total annual diesel fuel requirements to the bidder that offers the second highest discount. Said award shall be made based on the discount offered by the bidder with the highest discount. The bidder with the second highest discount shall have forty eight (48) hours upon certified receipt of ASPA s offer to accept or reject ASPA s offer. The failure of the bidder with the second highest discount to respond within the time stipulated herein will be construed as nonacceptance of said offer. In the event that the bidder with the second highest discount does not accept ASPA s offer, ASPA shall make a similar offer to the bidder with the third highest discount, and so forth, if all other responsible bidders do not accept the offer, the bidder that offers the highest discount shall supply one hundred percent (100%) of ASPA s total fuel requirements at its winning bid price. Fuel deliveries under the new fuel supply contract shall commence on October 1, ASPA will accept offers only from official Suppliers of petroleum products to American Samoa as defined in the Amended Court Plan for Sharing the Petroleum Storage Facilities in American Samoa entered December 16, 1994, and modified March 17, 2000 in the United States v. Standard Oil of California, Civil No. C SC (ND Calif.) and the Interim Permit and Agreement. Both Suppliers will submit a proposed schedule of delivery for the one (1) year contract. This is to ensure that each Supplier will not exceed their contract allotment during the year. VII. BASIS FOR SELECTION: Bids will be evaluated by a Source Evaluation Board ( SEB ). SEB members shall be chosen by the Chief Executive Officer. Submission of a restrictive bid shall constitute a waiver of any challenge or dispute of the SEB members, as well as the choice of methodology set forth on the SEB score sheets. The award will be made by ASPA in accordance with the evaluation criteria set forth herein and with ASPA s Procurement Rules. A determination shall be made by the SEB of those responsible bidders whose bids are susceptible of being selected for award. The determination shall be included in the contract file. Discussions may be conducted by the SEB with those responsible bidders whose bids are determined to have reasonable chance of being selected for award. These discussions shall only be conducted for the purpose of obtaining clarification from the bidder on its bid to ensure full understanding of and responsiveness to the IFB requirements. Discussions shall be conducted individually with each bidder and care shall be exercised to ensure that no information derived from competing bidder s bids is disclosed. All bidders with whom discussions are conducted shall be accorded an opportunity to revise their bids in response to specific clarifications based on the discussions. Unless the Procurement Manager - 6 -

7 determines that satisfactory evidence exists that a mistake has been made, as set forth in Procurement Rule 3 114, bidders will not be permitted to revise their bids after bid opening. The results of the evaluation will be documented, and a written recommendation by the SEB will be sent to the Procurement Manager. The Procurement Manager, upon receiving the Source Evaluation Board s written recommendation, shall forward the SEB recommendation to the Board of Directors through the CEO, for final approval. Approval is not final until approved by the Board of Directors. ASPA reserves the right to make the award to the bidder that submits a bid, which meets the requirements set forth herein and is in the best interests of ASPA after taking into consideration the aforementioned factors. ASPA also reserves the right to select portions of a bid, or to reject any and all bids. VIII. EVALUATION CRITERIA: These criteria will be used by the Source Evaluation Board to evaluate bids. Technical: Experience: Discount: Total: 0 10 points 0 10 points 0 80 points 100 points (best possible score) The discount (the Discount ) is the discount from the American Samoa Maximum Allowable Price MAP for one gallon of diesel fuel. The sale price to ASPA shall be the MAP less the discount. The MAP is set according to a set formula and published by the ASG Office of Petroleum Management. The MAP at present changes will on the 1 st day and 16 th day of each month. In such cases, ASPA shall only accept official changes approved by the ASG Office of Petroleum Management. The sale price shall be recalculated with every new MAP approved by ASG Office of Petroleum Management. Suppliers may offer any additional conditions that are not in conflict with the Contract Documents. For example, Supplier may offer an additional payment discount, penalties for late payments of certain periods, or other incentives. If no special conditions or terms are offered, the word None shall be inserted on Attachment A. In determining point values for the Discount offered, ASPA shall take into consideration the estimated value of all additional conditions. ASPA reserves the right not to consider the value of special conditions and based on its sole determination of value thereof, beneficial accordingly to the best interest of ASPA. ASPA may award contract based on just the discount offered below the American Samoa Maximum Allowable Price (MAP). ASPA may elect to purchase in whole or in part its fuel requirements under the terms of this IFB. IX. PROOF OF COMPETENCY OF SUBCONTRACTOR: Any bidder may be required to furnish evidence, satisfactory to ASPA, that proposed subcontractors have sufficient mean, equipment, and experience in the types of work called for to assure completion of the contract in a satisfactory manner. X. QUALIFICATION OF BIDDER: ASPA may make such investigations as it deems necessary to determine the ability of the bidder to perform the work, and the bidder shall furnish to ASPA such information and data for this purpose as ASPA may request, or the bid may be deemed non responsive. The bidder shall submit at least that information required by the section entitled Bidder s Qualification Data

8 XI. MULTIPLE BIDS COLLUSION: If more than one bid is offered by any one party or in the name of its clerk, partner or other person, all bids submitted by said party may be rejected by ASPA. This shall not prevent a bidder from submitting alternate bids when called for. A party who has quoted prices on materials is not thereby disqualified from quoting prices to other bidders or from submitting a bid directly to ASPA. If ASPA believes that collusion exists among any bidders, none of the participants in such collusion will be considered. Bids in which the contract prices are unbalanced or unrealistic may be rejected at ASPA s sole discretion. XII. BUSINESS LICENSE: Bidders from off island shall be licensed in accordance with the provisions of its state and country and shall be skilled and regularly engaged in the general type and size of work called for under this IFB. All bidders shall have an American Samoa business license prior to the execution of contract. XIII. ORDER OF PRECEDENCE: The contract documents (the Contract Documents ) governing the work consists of the following, which shall take precedence over each other in the order provided: (A) The written contract and any amendments, then: (B) This IFB and any addenda issued by ASPA, then; (C) Any acknowledgements or clarifications issued by ASPA regarding a submission by a bidder, and finally; (D) The Supplier s bid. In the event that any term, clause or provision of any document above conflicts with a term, clause or provision of any other of the contract documents, the document with greater precedent shall supersede, control and be binding on the parties. XIV. BIDDER S UNDERSTANDING: Each bidder must understand and acknowledge the conditions relating to the execution of the work and it is assumed that it will make itself thoroughly familiar with all the Contract Documents prior to execution of the written contract. Each bidder shall inform itself of, and the Supplier shall comply with, federal and territorial statutes and ordinances relative to the execution of the work. This requirement includes, but is not limited to, applicable regulations concerning wage rates, nondiscrimination in the employment of labor, protection of public and employee safety and health, environmental protection, historic preservation, the protection of natural resources, fire protection, burning and non burning requirements, permits, fees and similar subjects. The bidder agrees to the requirements of Executive Order No , as amended, including specifically the provisions of the equal employment opportunity clause. Additionally, by submitting a bid under this IFB, Bidder understands that a situation or concurrent fuel purchases through non competitive bidding may arise. Bidder understands and agrees that ASPA reserves the right to purchase all or part of its fuel requirements through non competitive bidding, as those procedures are set forth in Section of procurements for fuel that occur concurrently with the advertisement, award and contract execution under this IFB. XV. AMERICAN SAMOA LICENSES, PERMITS, TAXES AND IMPORT DUTY: The Supplier shall be cognizant of and comply with all American Samoa Government ( ASG ) laws and ordinances pertaining to licenses, permits, tax structure and import duties. Additionally, the Supplier shall: (A) American Samoa is a protectorate of the United States located outside the jurisdiction of the U.S. Customs and U.S. Immigration Department. Because of this, the Supplier s equipment that will be returned to the United States will be subjected to customs or import duty unless properly manifested before shipment from the United States. Excise Tax on equipment to be incorporated into the project or used on this project - 8 -

9 may be waived upon written request. Should the Supplier elect to sell the equipment locally upon completion of the contract or uses the equipment for other than this project rather than shipping the equipment away from American Samoa, the equipment will then be subject to the appropriate duty rate. Equipment imported for use other than on this project is also subject to local tax; XVI. WITHWDRAWAL OF BID: Any bid may be withdrawn prior to the scheduled time for the opening of bids by notifying ASPA in a written request. No bid may be withdrawn after the time scheduled for opening of bids. XVII. OPENING AND EVALUATION OF BIDS: In accordance with ASPA Procurement Rule 3 110, bids will be opened and recorded as part of the record for the Source Evaluation Board on the date and at the time indicated above at the Procurement Office in Satala or in another place designated by the ASPA Procurement Manager in writing. XVIII. EXECUTION OF CONTRACT: The Supplier shall, after receiving the Notice of Award, sign and deliver to ASPA the written contract, together with all other documents as required by ASPA. XVIX. ASSIGNMENT: The Supplier or ASPA shall neither assign nor subcontract any portion of this Contract without written approval of the other party. Furthermore, no assignment of any monies due hereunder to the Supplier, either voluntarily or by operation of law, shall be valid without the prior written consent of the Supplier and the Chief Executive Officer of ASPA. XX. TIME IS OF THE ESSENCE: The time is of the essence in completing the work to be performed under the contract. Delays and extensions of time will not be allowed, and a penalty fee of $200 per day shall be assessed for not meeting any of the milestones. XXI. IFB CONDITIONS: This IFB does not commit ASPA to award a contract or to pay any cost incurred in the preparation of a bid. The American Samoa Power Authority reserves the right to: (A) Reject an offer from a bidder that: (1) fails to comply with the requirements set herein; or (2) is not financially responsible; or (3) past history of not being able to perform; or (4) bid is late; (B) Reject all bids and reissue an amended IFB ; (C) Request additional information from any bidder submitting a bid; (D) Select a bidder for award based criteria; (E) Negotiate a contract with the bidder selected for award; and (F) Waive any non material violations of rules contained in this IFB. ASPA reserves the right to issue any addendums to this IFB. Bidders shall send ASPA a signed form confirming receipt of any addendums, and shall submit supporting/additional information as required by any addendums. In the event that a bidder fails to acknowledge receipt of any such Addendum in the space provided, his bid shall be considered irregular and will be accepted by ASPA only if it is in ASPA s best interest. In the event that Addenda are not received until after the bidder has submitted its bid, a supplementary bid may be submitted revising the original bid. Such supplementary bids must be received by ASPA prior to the scheduled time for opening of bids. XXII. BILL OF SALE: Successful Bidder shall render Bill(s) of Sale for each item delivered under this contract. Failure to comply with this requirement will result in rejection of delivery. The Bill(s) of Sale must accompany the items delivered but will not be considered as an invoice for payment. Supplier shall bill the ASPA in accordance with billing instructions as indicated on the Contract. XXIII. INSPECTION: All supplies, materials, equipment, or services delivered under the contract shall be subject to the inspection and/or test conducted by the ASPA at destination. If in any case the supplies, - 9 -

10 materials, equipment, or services are found to be defective in material, workmanship, performance, or otherwise do not conform with the specifications, the ASPA shall have the right to reject the items or require that they be corrected. The number of days required for correction will be determined by the ASPA. XXIV. SELLER S INVOICES: ASPA shall make payment only from official invoices verified by both ASPA and Supplier. (A) Invoices shall be ʺcertified true and correctʺ and shall contain the following information: Contract or Purchase Order number (if any,) item numbers, description of supplies or services, sizes, quantities, unit prices, shipping and handling insurance, extended total, and any other non product costs associated with this order. Bill of lading number and weight of shipment will be shown for shipments made on Government bills of lading. XXV. INDEMNITY PROVISION: The Supplier shall indemnify and hold harmless the American Samoa Power Authority and the American Samoa Government from against any and all claims, damages, losses, and expenses including attorney s fees arising out of or resulting from the performance of the work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease, death or damage to property of whatsoever nature, including the loss of use resulting therefrom, and whether or not is caused in whole or in part by any negligent act or omission of the Supplier, its subcontractors, or anyone employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by the negligence of ASPA and/or the strict liability of ASPA, its agents and employees. XXVI. BIDDER S QUALIFICATION DATA: It is the intention of ASPA to award a contract only to the Supplier who is able to furnish satisfactory evidence that it has the requisite experience and ability and that it has sufficient capital, facilities and plant to enable it to supply the requested items to complete it within the term set forth in the contract. Each bidder shall submit as part of the total bid package, the following information: (A) Name of organization; (B) Address and phone number of home office, principal place of business and locations and contact information for any branch offices; (C) (D) Type of business structure, e.g., corporation, partnership, joint venture, proprietorship; Place of organization or state of incorporation; (E) Names and addresses for all owners for businesses other than corporations; For corporations, list the names and addresses of directors, officers and stockholders with twenty (20) percent ownership interest or greater; American Samoa State Implementation Plan (SIP) Under the Clean Air Act, the Environmental Quality Commission has adopted rules and regulations which limit the emissions of particulates and sulfur dioxide from stationary sources. Sulfur dioxide emissions will be limited by allowing a maximum annual average of 0.2% sulfur content for fossil fuel imported and burned, with no single load to exceed 0.4%. The successful supplier s responsibility are to closely and accurately monitor the diesel fuel sulfur content over the twelve (12) month rolling average to make sure that it does not exceed 0.2% at any time during the contract. Supplier shall provide ASPA with rolling average data monthly

11 The Total Base Number (TBN) of the lube oil for a particular type of fuel oil is one of the main criteria for comparison. ASPA uses Distillate fuel #2 for Deutz engines. ASPA s current lube oil TBN rating is 15. Therefore, lube oils with TBN of 15 or higher are taken for comparative study. Other oils listed in the Deutz manual have TBN ratings less than

12 ATTACHMENT A BID PROPOSAL OF SUPPLIER PRICES AND SPECIAL CONDITIONS IFB NO. 2007GEN1009 Bidder Supplier s Name: The ASPA Purchase Price shall be the Maximum Allowable Price (MAP) less the Discount offered. It shall be recalculated on the 1 st and 16 th day of each month when the MAP changes. Both the MAP and ASPA s Purchase Price becomes effective on the same day during the term of the contract. Bidder may alter this attachment as necessary to fit its offered bid. Bidder s Discount: US$ per US gallon if invoice paid within days; US$ per US gallon if invoice paid within days; US$ per US gallon if invoice paid within days. The Special Conditions offered or required by Supplier are as follows: (note: if no special conditions or terms are offered, the word none shall be inserted below)

13 Warranty Against Collusion The BIDDER SUPPLIER warrants that neither it nor any of its employees have directly or indirectly entered into any secret or non secret agreement, participated in any collusion, or otherwise taken any action in restraint of competition, including but not limited to, discussion with other Bidder Suppliers of proposed bid prices in connection with the bid or proposal submitted herein. Signed by: Date:

14 ATTACHMENT B METHODOLOGY FOR FUEL ADJUSTMENT FOR API GRAVITY A penalty shall be assessed on No. 2 land diesel fuel with API gravity greater than 35. The penalty shall be determined and applied as follows: Prior to the arrival of each SUPPLIER S shipment of No. 2 land diesel fuel in American Samoa, the SUPPLIER shall notify a designated ASPA representative of the shipment arrival date. Upon the shipment arrival date, an ASPA representative shall measure the API gravity of the fuel at the ship or prior to the discharge of the fuel from the ship. If for any reason an ASPA representative fails to take a measurement, the API gravity of the fuel shall be determined from the SUPPLIER S fuel specifications for each fuel shipment. The API gravity measurement taken by the ASPA representative, or, if for any reason ASPA fails to take a measurement, that measurement for the SUPPLIER S fuel specifications for each fuel shipment shall be utilized to calculate any price adjustment. The adjusted price based upon API gravity will be calculated using the formula and table below. ADJUSTED PRICE FORMULA Adjusted Price per gallon=btu of > 35 API Gravity diesel fuel X (bid price per gallon) BTU of 35 API gravity diesel fuel

15 TABLE A API GRAVITY TOTAL HEAT CONTENT BTU per gallon PRICE ADJUSTMENT RATIO ,720 1, ,130 0, ,540 0, ,350 0, ,760 0, ,170 0, ,680 0, ,680 0,

16 Methodology for fuel Adjustment or Penalty for fuel with API Gravity > than 35 Adjusted Price = BTU of higher API Gravity Diesel Fuel X stated price BTU of lower API Gravity Diesel Fuel Example: Compare delivered No. 2 Diesel Fuel; purchases prices is $1 per gallon; and 38 API gravity with 134, 960 BTU Standard 35 API gravity diesel fuel has a 136,720 BTU Adjusted Price = 134, API x $1.00 = $ Equivalent theoretical 136, API adjusted fuel price of lower Gravity diesel fuel For the above example, the adjusted fuel price per gallon that ASPA shall pay is $ So fuel penalty will be ($1.00 minus $ ) or $ /gallon. Total API penalty per month will be total fuel delivered per month x $ The API gravity measurement taken for each fuel shipment shall be used to calculate any price adjustment on invoices from the date of such measurement, or, in situations where the measurement is derived from the SUPPLIER S fuel specification, from the arrival date of SUPPLIER S fuel shipment into American Samoa. The price adjustment, if any, shall then remain the same for all invoices submitted for said shipment, and will only be recalculated with each new shipment of SUPPLIER S No. 2 land diesel fuel

17 ATTACHMENT C PRODUCT SPECIFICATIONS PRODUCT: No. 2 Land diesel fuel meeting the specifications required by the American Samoa Government, attached hereto and incorporated by reference as part of this Contract, with API gravity not to exceed