HomeMy WebLinkAbout2003-150 s J ORIGINAL
CONTRACT MODIFICATION AGREEMENT
RECOVERED NEWSPAPER DELIVERED SUPPLY AGREEMENT . 150
This Contract Modification Agreement, bearing an effective date of June 1 , 2003 is by
and between INDIAN RIVER COUNTY SOLID WASTE DISPOSAL DISTRICT, a dependent
special district of Indian River County, Florida, whose address is c/o Indian River County
Utilities Department, 1840 251' Street, Vero Beach, Florida 32960, (" SUPPLIER"), and SP
Recycling Corporation with its office located at 1895 Phoenix Boulevard, Atlanta, Georgia
30349, ("BUYER") .
Background Recitals
I. On August 11 , 1998 BUYER and SUPPLIER entered into the Recovered
Newspaper Delivered Supply Agreement ("Contract").
II. The initial term of the Contract was two (2) years, commencing August 11 , 1998
with continuous optional renewal periods of one ( 1 ) year.
III. The original purchase prices were as follows :
Floor price of $25 . 00/ton delivered to the BUYERS Facility and high side listing
less $20 . 00/ton of the Official Board Markets, Yellow Sheets "Paper Stock Price
List" for #8 old newsprint, listed for the southeast market area.
IV. Paragraph B under General Conditions of the Contract allows for mutually agreed
changes and modifications .
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, the parties agree as follows :
A. The background recitals are true and correct and form a material part of this Contact
Modification Agreement.
B . From and after the effective date of this Contract Modification Agreement, the parties
agree to modify the Contract as set forth herein and in Revised Exhibit A attached to this
Contract Modification Agreement and by this reference incorporated herein in its
entirety.
C . All paragraphs of the Contract starting with the initial paragraph captioned "This
Agreement" through and including the paragraph captioned "Purchase Orders" are
deleted and replaced in their entirety with the following :
1 . Volume : The annual old newsprint (ONP) volume projection is 4, 200 tons, which is
to be shipped in regular weekly releases. A 10% variance of the annual volume, either
over or under will satisfy this Contract . BUYER retains the right to reduce volumes
throughout this Contract due to SUPPLIER' S failure to meet ONP quality requirements.
SUPPLIER reserves the right to terminate this Contract after receipt of the reduced
volume notice from the BUYER. SUPPLIER shall provide fourteen ( 14) calendar days
notice to BUYER of such termination.
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2. ualit : BUYER ' S ONP quality requirements are part of this Contract as Revised
Exhibit A . A representative of the BUYER will inspect incoming deliveries for
compliance with the Revised Exhibit A according to the BUYER ' S ISO-9002 quality
auditing procedure , attached as Exhibit B and by this reference incorporated herein in its
entirety.
3. Price: The monthly base price will be determined by using the current month ' s first
issue of the Official Board Markets , the Yellow Sheets "Paper Stock Price List" for #8
ONP as listed for the southeast market area. Both parties agree to use another mutually
acceptable market price indicator if the Official Board Markets no longer publishes a
paper stock price list for #8 ONP or if this publication no longer accurately represents
local pricing.
4. Term: June 1 , 2003 through December 31 , 2004 , with no option to renew .
5. The current monthly base ONP price shall be paid for each month of the Contract
term. ` Average ' monthly contamination ratio will be determined in accordance with
the following schedule :
% Of Contamination Official Board Markets Price List — Southeast Market
0 , 10 - 1 , 50 % High plus $ 10 .00/ton
1 . 51 — 2 . 50 % High plus $5 . 00/ton
2 , 51 - 4 , 00 % High (The Base Price)
4 .01 — 5 . 00 % High Less $ 5 . 00
BUYER agrees to accept non-conforming deliveries as long as the ` average ' monthly
contamination level is below 2 . 5 % or less than thirty (30) plastic bags per ton . BUYER
retains the right to reject a delivery when the load' s contamination ratio exceeds 6 . 00 %
and/or the plastic bags exceed 80 bags per tons .
6. Floor Price : The monthly shipping period base price will not be less than $40 . 00 per
ton , FOB Vero Beach , FL,
7. Volume Incentives : Supplier will receive a base price bonus incentive of $ 1 . 50 per
ton on all quality tons received in excess of 4620 tons annually.
8. Shippinu/Transportation : BUYER has provided to SUPPLIER a "spotted"
storage/transportation trailer to handle the contracted volume of ONP generated by
SUPPLIER . BUYER agrees to absorb the monthly trailer rental expense .
SUPPLIER will advise BUYER no later than 1 p .m. , Monday through Friday, when a
loaded trailer is available for shipment the next business day. SUPPLIER agrees to
load shipments as follows : load in straight loads of either baled or loose ONP ; bales
shall be the same size per load; shall load to minimum 42 ,000 lbs . , but not to exceed
legal load limits . SUPPLIER will be responsible for loading, for overweight fines
and for needed repairs to trailer if damaged by SUPPLIER, solely to the extent
permitted by Florida Law , and in no event greater than the limits set forth in Florida
Statutes , Section 768 . 28 . Prior to the loaded trailers leaving the SUPPLIER ' S facility
they will be weighed on the landfill ' s outbound scale . Adjustments to the weight will
be performed by SUPPLIER ' S staff. Loads less than 42 ,000 lbs . (21 tons) are subject
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to a freight charge-back adjustment. The SUPPLIER reserves the right to effect
repairs to the BUYER ' S trailers, caused solely by the negligence of the SUPPLIER,
with SUPPLIER' S own work force.
D . Under GENERAL CONDITIONS of the Contract, delete paragraph F in its entirety.
E. Under GENERAL CONDITIONS of the Contract, add new paragraph L to read as follows :
L. Either party' s failure to perform its obligations hereunder (including BUYER ' S
obligation to accept delivery of #8 ONP during the relevant time period) shall be
excused to the extent, and for the period of time such non-performance is caused
by war, invasion , fire, explosion , flood, riot, strikes , acts of God , delays or
defaults of carriers, energy shortages, or other causes beyond such party ' s
reasonable control . The excuse of performance provided herein shall not be
available to a party which fails to employ diligence in removing or curing such
event of force majeure. The party affected by force majeure shall give the other
party prompt written notice of any inability to perform hereunder. In the event
that the SUPPLIER is affected by the BUYER exercising its right to force
majeure, the BUYER will use reasonable efforts to aid in marketing such tons .
F. All terms and conditions of the Contract not amended herein remain in full force and effect.
IN WITNESS WHEREOF, SUPPLIER AND BUYER have caused this Contract Modification
Agreement to be signed by their respective , duly authorized officers as of the day and year first
stated above.
INDIAN RIVER COUNTY, FLORIDA
SOLID WA DISPOSAL DISTRICT
SOLID RECYCLING CORPORATION
By By: ,
R. MACHT THOMAS M. HAHN
Chairman President
Date Approved by SWDD 06 - 24 - 2003 Date Approved by SP R ycling
Corporation 6 6 n
ApF� p VLt7 A TO IR6tM
AND GAL SUFFICIENCY
BY
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MA IA E . j. . 1 . / L
ASS STANT COUNTY ATATORNEY ,moi/l/�`
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REVISED
Exhibit A
SP Newsprint ' s Special News, Deink Quality (#8 ONP)
✓ Contains sorted, fresh, dry, sunburn free newspapers
✓ Contains no more than the normal percentage of inserts, with samples removed
✓ May contain overissue news (polyethylene bags must be removed)
✓ May contain pressroom scrap without heavy ink sheets or overissue inserts
✓ Maximum age : 3 months
✓ Moisture content: 10% (air dry)
✓ Total Contamination : '/z of 1 % (0 . 50%)
✓ Prohibitives : none
✓ Outthrows : '/z of 1 %
Prohibitives are any materials and contaminants other than paper. The following list provides a limited number
of prohibitive examples.
Plastic bags or flexible Synthetic paper (Federal Pressure sensitive tapes, Ropes, strings, twines,
film plastic Express envelopes) labels, etc . strapping
Adhesive tapes Bound books Metals Glass
Plastic containers Glued magazines Dirt Wood
Carbon papers Wax papers Garbage Cloth
Plastic window envelopes Pressroom trash Floor sweepings Beverage cartons
Outthrows are papers other than old newspaper. The following list provides a limited number of outthrow
examples .
Aged newspapers Commercially printed publications Corrugated boxes
Shredded papers Overissue inserts Kraft bags
Sunburned newspapers Stapled magazines Junk mail
Heavy inked sheets Catalogs Office papers
Colored (dyed) papers Telephone books Computer papers
Folding cartons Treated papers Coated papers
SPECIAL INSTRUCTIONS .
✓ Hogged or shredded ONP is an unacceptable pack.
✓ Bales should be dense, solid, tare-free and be uniform in size within a load.
Inspected loads in excess of allowed tolerances for plastic bags or total contamination quality levels are
subject to a reprocessing charge or rejection.
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Jul , 7 , 1998 4 . 38PM SOUTHF . . " T RECYCLING CORPS , No , 8787 P . 3 / 10
Southeast Paper Recycling Company
ONP QUALITY CERTIFICATION
SUPPLIER ASSISTANCE PROGRAM
Mission
SOUTHEAST PAPER MANUFACTURING COMPANY IS COMMITTED TO
SATISFYING OUR CUSTOMERS BY BEING THE PREMIER SUPPLIER OF
QUALITY RECYCLED CONTENT NEWSPRINT MANUFACTURED FOR THE
PUBLISHING INDUSTRY IN THE UNITED STATES .
Introduc ion
Southeast Paper Manufacturing Company is North America's largest producer of
100% recycled newsprint. The company began operation in 1979 with one
newsprint paper machine ; expanded in 1989 to a two machine operation ; and is
currently producing 1 , 400 tons of newsprint per day at the Dublin , Georgia mill ,
Southeast Paper is committed to satisfying our newsprint customers by being the
premier supplier of quality recycled content newsprint. The key factor in
producing competitive quality newsprint is providing the mill' s deink system with
high quality raw material - in our case, old newspapers (ONP ) .
Southeast Paper Recycling Company , the raw material procurement arm of
Southeast Paper, realizes that its relationship with ONP suppliers is important for
the long term success of the company. A vital part of Southeast Papers .
procurement strategy includes supplier training , assistance and recognition .
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Jul , 7 . 1998 4 ; 38PM SOUTV, 4" T RECYCLING CORPS , No , 8787 P , 5 / 10
Southeast Paper Recycling Company
ONP QUALITY CERTIFICATION
SUPPLIER ASSISTANCE PROGRAM
# 8 ONP Description and Sppelficatio
Southeast Paper's manufacturing process is designed to use and recycle sorted ,
recovered old newspapers. Other materials that are shipped with the ONP and
introduced into the manufacturing process are contaminants that cause
manufacturing problems and finished product defects . There are two categories
of these contaminants :
* Prohlbiitiyes are any materials and contaminants other than paper.
* Outthrows are papers other than old newspaper.
Prohibitives cause our most severe quality problems , Plastics , latex binders ,
pressure sensitive adhesives , hot melt adhesives and other similar materials
cause our most severe product defect - stickies . Other prohibitives cause sheet
defects that substantially reduce the quality of our finished newsprint. String , dirt
and other trash can cause cuts or defects that weaken the finished sheet. All of
these prohibitive contaminants , especially stickies , can cause thin spots ,
pickouts , holes In the sheet, and sheet breaks on our paper machines and on our
customers ' printing presses . While we do screen our ONP pulp to remove
prohibitives , only the larger pieces are removed . The pulping process will
produce many small pieces that escape the screens and end up in the finished
product resulting in problems for our customers . Removing the prohibitives from
the ONP prior to the pulper is a key to producing high quality newsprint.
Outthrows cause different types problems . Coatings and fillers used in
magazines are subject to breakdown during processing and can cause stickies .
Magazines have large amounts of clay fillers that our process is not designed to
handle . Consequently, a large portion of fiber is lost to the sewer which results in
a substantially higher cost of operation . Magazines , commercially printed papers , i
office papers , boxes , etc. , add excessive ink to our process and in many cases
the ink does not deink or bleach out properly. Even if the paper can be deinked ,
this also increases our deinking and bleaching costs . Old cardboard boxes ,
_ magazines , and household mail also cavy prohibitives as pressure sensitive j
labels , sealing tapes and glue .
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Jul . 7s 1998 4 : 39PM SOUTHEAST RECYCLING CORPS ,
1 fit • No . 8787 P, 6 / 10
Southeast Paper Recycling Company
ONP QUALITY CERTIFICATION
SUPPLIER ASSISTANCE PROGRAM
ONP Quality ea gement
Since the #8 ONP raw material quality Is important to our finished newsprint quality
and manufacturing costs , ONP quality of all Incoming shipments is measured through
contaminant inspections . The results are used to evaluate quality and to provide
performance feedback to the supplier.
Three primary quality measurements are used ;
1 .
Moisture-Content
(tonnage adjustment in excess of 12 % )
silk 2s, Contaminant Percentage (Outthrows and Prohibitives)
(ratio of contaminates sampled)
34 Sheet plastic (bads and films )
(expressed as plastic bag count per 2 , 000 lbs . )
The procedure used to determine the contaminant levels is detailed in the steps
below;
* Randomly sample rail or truck shipments to obtain 300 to 500 pounds to inspect.
* Weigh sample and record exact weights .
MOISTURE I
1 . Randomly collect 10 sections from sample load . Sections should be a minimum of
6 sheets thick.
2 . Place 1 section at a time into moisture tester. Record each result in the computer
system .
3 , Average moisture will be displayed .
4 , If avgrage moisture Is above 25 % , retest with another 10 sections .
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Ju I , 7 . 1998 4 : 39PM SOUTHER-17 RECYCLING CORPS , No , 8787 P , 7 / 10
After second test, or first, if second test is not required , record results into the
computer system .
5 . System will determine correction needed to reduce shipment weight to 12 % .
6 . Communicate results to supplier within 8 hours of the beginning of the next
business day.
CONTAMINANTS :
1 . Hand sort the sample to remove all outthrows and prohibitives , Separate the
sheet plastic (bags and films) from the other contaminants .
2 . Weigh the two contaminant plies collected , Exact weights will be used .
3 . Determine the two major contaminants from the inspection .
4 . Record the information in the computer system ,
..
5 . Communicate summary results to the supplier within 8 hours of beginning
of next business day .
Supplier will be provided statistic data as well as a description of the most obvious
contaminants based on volume .
Moisture% Plastic bags/films Corrugated (OCC )
Excessive inserts Stickies Brown bags
Heavy inked sheets Magazines (OMG) Boxboard
Commercial news Telephone books (OTD) Office papers
Aged ONP Junk mail Containers
Shredded String/twine Other (trash )
Southeast Paper acknowledges that recovered materials graded to meet paper stock
specifications have traditionally given consideration to the fact that paper stock as
such is a@ secondary material produced manually and may not be technically perfect ,
ie ; zero tolerance , therefore, a de minimis amount of prohibitive material is acceptable .
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J,u, l , , 7 . 1998 4 ; 39PM SOUTHI RECYCLING CORPS , No , 8787 P , 8 / 10
Southeast Paper Recycling Company
l ONP QUALITY CERTIFICATION
SUPPLIER ASSISTANCE PROGRAM
Supplier Education . Training and Assistance
Southeast Paper is committed to working with our suppliers to help achieve
common goals . Examples of assistance that Southeast Paper will provide :
• Visit suppliers to educate personnel on paper stock industry standards to
demonstrate mill inspection procedures to identify and define contaminants ,
and to describe the effects of contaminants on finished product ,
• Visit suppliers to provide technical assistance to improve sorting and
processing methods .
• Provide training materials that suppliers may use internally and/or externally .
Assist suppliers in reducing contamination levels of incoming tonnage .
• Accommodate and encourage mill visits by suppliers .
Participate in public forums that address quality issues .
Recognize and reward suppliers meeting quality objectives .
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Jul , 7 . 1998 4 839P SOUTHFoST RECYCLING CORPS , No , 8787 P . 9 / 10
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Southeast Paper Recycling Company
ONP QUALITY CERTIFICATION
SUPPLIER ASSISTANCE PROGRAM
Conclusion
Southeast Paper is dedicated in its effort to produce premium recycled content
newsprint to our mill customers . We cannot do that without solid partnerships
with our raw material suppliers . We believe that we have a support system that
will enable both parties to receive benefits over the long term . We value our
relationships with you .
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