MUTUAL LOGISTICS SUPPORT ARRANGEMENT
(RP-US-01)
BETWEEN
THE DEPARTMENT OF NATIONAL DEFENSE
OF THE REPUBLIC OF THE PHILIPPINES
AND
THE DEPARTMENT OF DEFENSE
OF THE UNITED STATES OF AMERICA

The Department of National Defense of the Republic of the Philippines and the Department of Defense of the United States of America, hereinafter referred to as the Parties, desiring to further the interoperability, readiness and effectiveness of their respective military forces through increased logistics cooperation in pursuance of the Charter of the United Nations, RP-US Mutual Defense Treaty, and the RP-US Military Assistance Agreement and in accordance with their respective national laws and policies, have resolved to conclude this Mutual Logistics Support Arrangement, hereinafter referred to as the Arrangement.

This Arrangement is entered into for the purpose of establishing basic terms, conditions and procedures to facilitate the reciprocal provision of logistics support, supplies and services as said terms are defined in Article III of this Arrangement

1. This Arrangement is designed to facilitate reciprocal logistic support between the Parties whereby one party may request logistics support, supplies and services which the other may provide for the duration of the activity or situation as follows:

a. In times of peace, during combined exercises and training under the Mutual Defense Treaty, operations and deployments outside the purview of the Mutual Defense Treaty but undertaken under the authority of the United Nations, and other cooperative humanitarian efforts such as humanitarian assistance, disaster relief and rescue operations, and maritime anti-pollution operations, within Philippine territory, or outside Philippine territory, in cases where either Party or both, decide to participate,

b. In times of international tension, national emergency of either the Philippines or the United States, or actual hostilities, as a result of which the RP-US Mutual Defense Treaty or Mutual Defense Board Concept Plan (CONPLAN) is jointly put into effect by the Governments of the Republic of the Philippines and the United States; and

c. In operations and deployments not covered in subparagraphs 1a and 1b above undertaken under the authority of the United Nations, in which one of the Parties may have a need of logistics support, supplies and services, such logistics support, supplies and services shall only be provided upon consent of both Parties.

2. This Arrangement applies to the reciprocal provision of logistics support, supplies and services between the military forces of one Party by the other Party in return for either cash payment or the reciprocal provision of logistics support, supplies and services to the military forces of the other Party.

3. Acquisitions and transfer under this Arrangement and any Implementing Arrangements executed hereunder shall be carried out by the Parties in accordance with their relevant laws and regulations. All obligations of the Parties under this Arrangment are subject to the availability of appropriations for such purposes.

4. The following items are not eligible for transfer under this Arrangement and are specifically excluded from its coverage:

a. guided missiles;

b. naval mines and torpedoes;

c. nuclear ammunition and included items such as warheads, warhead sections, projectiles, demolition munitions and training ammunition;

d. cartridge and air crew escape propulsion system (AEPS) components;

e. chaff and chaff dispensers;

f. guidance kits for bombs or other ammunition;

g. chemical ammunition (other than riot-control agents);

h. source, byproduct or special nuclear materials, or any other material, article, data, or thing of value the transfer of which is subject to the Atomic Energy Act of 1954 (Title 42, United States Code, Section 2011, et. Seq.)

1. As used in this Arrangement and in any Implementing Arrangements, which provide specific procedures, the following definitions apply:

a. Logistics supplies, support and services are defined as follows:

1. Supplies-Food, water, petroleum,oils, lubricants, clothing, ammunition, spare parts and components

2. Support and services-billeting, transportation (including airlift), communication services, medical services, base operations support (and construction incident to base operations support), storage services, use of facilities, training services, repair and maintenance services, calibration services and port services, in connection with activities conducted under the Charter of the United Nations, RP-US Mutual Defense Treaty, and the RP-US Military Assistance Agreement.

Logistics supplies, support and services include the temporary use of general purpose vehicles and other nonlethal items of military equipment which are not designated as significant military equipment on the US Munions List.

b. Implementing Arrangement A written supplementary Arrangement which contains additional terms and conditions related to a specific acquisition and/or transfer of logistics support, supplies and services.

c. Order A written request, in an agreed format and signed by a Point of Contact (POC), for the provision of specific logistics support, supplies and services pursuant to this Arrangement and any applicable Implementing Arrangements.

d. Invoice A document from the Supplying Party which requests reimbursement or payment for specific logistics support, supplies and services rendered pursuant to this Arrangement and any applicable Implementing Arrangements.

e. Transfer Selling (whether for payment in currency, replacement-in-kind, exchange of supplies or services of equal value), leasing, loaning, or otherwise temporarily providing logistics support, supplies and services under the terms of this Arrangement and any applicable Implementing Arrangements.

f. Replacement-in-kind (RIK) Payment for a transfer conducted under this Arrangement in which it is agreed that the Receiving Party will replace logistics support, supplies and services that it receives with logistics supplies, support and services of an identical, or substantially identical, nature under agreed conditions.

g. Equal Value Exchange A transfer conducted under this Arrangement in which it is agreed that the Receiving Party will replace logistics support, supplies and services that it receives with logistics supplies, support and services of an equal monetary value.

h. United States Munitions ListUS Defense articles and defense services which are designated by the US President under the Arms Expert Control Act as subject to export controls: The US Munitions List is published in Part 121 of Title 22 of the US Code of Federal Regulations.

i. Receiving Party The Party ordering and receiving support

j. Supplying Party The Party providing support

k. Point of Contact Authorized offices, agencies and/or individuals for coordinated placement and acceptance of orders, as well as receipt and collection of payments.

IV. TERMS AND CONDITIONS

1. Each Party shall exert its best efforts, consistent with national priorities, to satisfy requests from the other Party under this Arrangement for logistics support, supplies and services.

2. Orders may be placed or accepted only by the Points of Contact (POCs), or designees identified by the Parties in Annexes B through N of this Arrangement. When military forces of the Republic of the Philippines require logistics support, supplies and services outside the USPACOM Area of Responsibility (AOR), they may place orders directly with the cognizant POC or may seek assistance of HQ USPACOM or a USPACOM Component Command, to place an order with a non USPACOM POC.

3. An Implementing Arrangement under this Arrangement may be negotiated on behalf of the US Department of Defense by Headquarters, US Pacific Command (USPACOM), the Headquarters of other United States Unified Commands, or their designated subordinate commands. Implementing Arrangements may be negotiated on behalf of the Department of National Defense, Republic of the Philippines, by General Headquarters, Armed Forces of the Philippines or its individual major service headquarters and subject to the approval of appropriate Philippine authority. Implementing Arrangements must identify POCs and their specific authorizations or limitations.

4. Prior to submitting a written order, the Ordering Party shoud initially contact the Supplying Party's POC by telephone, fax or e-mail to ascertain availability, price and desired method of repayment for required material or services. Orders must include all the data elements in Annex A, as well as any other terms and details necessary to carry out the transfer. Instructions and a standard order form are attached at Annex N. The number of this Arrangement, US-RP-01, should be annotated on all Orders and related correspondence.

5. The Receiving Party is responsible for:

a. Arranging pickup and transportation of supplies acquired under this Arrangement. This does not preclude the Supplying Party from assisting with loading supplies acquired under this Arrangement onto the transportation conveyance. The Supplying Party will notify the Receiving Party when and where supplies are available to be picked up.

b. Obtaining the applicable customs clearance and arranging other official actions required by national customs regulations.

6. The individual picking up the supplies or receiving the services on behalf of the Receiving Party will sign the standard order form (Annex N) in Block 20 as evidence of receipt. If the standard order form is not available at the Supplying Party's point of issue, the individual collecting the supplies will sign the receipt document provided by the Supplying Party as a substitute. The number of this Arrangement, US-RP-01, will be entered on the receipt of document. The Supplying Party will forward the signed receipt document to the activity authorized to accept Order under this Arrangement where the signed receipt document will be attached to the original order form by the Receiving Party.

7. Logistics support, supplies and services through this Arrangement will not be retransferred, either temporarily or permanently, to any person other than a member of the forces of the Receiving Party without the prior consent of the Supplying Party.

1. For transfers of logistics support, supplies and services under this Arrangemnet, the Parties shall agree for payment either by cash ("reimbursable transaction"), by replacement-in-kind, or by an equal-value exchange ("exchange transaction"). The Receiving Party shall pay the Supplying Party as provided in either paragraph 1a or paragraph 1b of this Article, as agreed.

a. Reimbursable Transaction The Supplying Party shall submit invoices to the Receiving Party after the delivery or performance of the logistics support, supplies and services. Both Parties shall provide for the payment of all transactions and each Party shall bill the other Party no less frequently than every 3 months. Invoices shall be accompanied by necessary support documentation and will be paid within 60 days from the date of receipt of the invoice. In pricing a reimbursable transaction, the Parties agree to the following reciprocal pricing principles:

(i) In the case of specific acquisition by the Supplying Party from its contractors on behalf of a Receiving Party, the price shall be no less favorable than the price charged the armed forces by the contractor of the Supplying Party for identical items or services, less any amounts excluded by Article VI of this Arrangement. The price charged may take into account differentials due to delivery schedules, points of delivery and other similar considerations.

(ii) In the case of transfer from the Supplying Party's own resources, the Supplying Party shall charge the same price it charges its own forces for identical logistics support, supplies and services, as of the date delivery or performance occurs, less amounts excluded by Article VI of this Arrangement. In any case where a price has not been established or charges are not made for one's own forces, the Parties shall agree on a price in advance, excluding charges that are precluded under these reciprocal pricing principles. However, in the case of items, the price will be no less than the Supplying Party's acquisition cost.

b. Exchange Transaction Exchange transactions may be by replacement-in-kind (RIK) or equal-value-exchange (EVE). Both Parties shall maintain records of all transactions. The Receiving Party shall pay by transferring to the Supplying Party logistics support, supplies and services that are agreed between the Parties to be in kind or of equal monetary value to the logistics support, supplies and services delivered or performed by the Supplying Party. If the Receiving Party does not complete the exchange within the terms of replacement schedule agreed to or in effect at the time of the original transaction, the transaction shall be deemed reimbursable and governed by paragraph 1a above, except that the price shall be established using actual or estimated prices in effect on the date payment would otherwise have been due.

c. Establishment of Price or Value. The following reciprocal pricing principles shall apply. The price established for inventory stock material will be the Supplying Party's stock list price. The price for new procurement will be the same price paid to the contractor or vendor by the Supplying Party. The price for in-shop repair or technical assistance services rendered will be based on the Supplying Party's standard price or, if not applicable, a price equal to only the direct costs associated with providing the services, for example, supply stock list prices and actual labor charges. The price for services rendered in a temporary duty (TDY) status will be based on the individual's actual per dien and transportation costs, plus payroll costs for civilian labor.

d. Means of Payment. The following means of payment shall be acceptable.

(i) Payment-in-cash (PIC). Payment will be made in currency of the Supplying Party or as otherwise agreed in the order.

(ii) Replacement-in-kind (RIK). When RIK is used as the method of payment, the Receiving Party will replace or return supplies in the same condition and conforming to the same configuration as the supplies provided by the Supplying Party, or if so agreed, a later configuration within one year of receipt. The Receiving Party is responsible for negotiating return transportation and delivery to the location designated by the Supplying Party at the time of request. If the Receiving Party does not replace or return supplies within one year, payment must be in cash (PIC).

(iii) Equal-value-exchange (EVE). To the extent possible, when EVE is the desired method of payment, prior to the provision of the requested support, both Parties will agree on the goods and services that will be accepted for payment and their value. If the Receiving Party does not provide the agreed goods and services to the Supplying Party within one year of the original transaction, the method of payment will convert to PIC.

(2) When a definitive price for the order is not agreed in advance, the order pending agreement on final price, shall set forth a miximum liability for the Party ordering the logistics support, supplies and services. The Parties shall then promptly enter into negotiation to establish the final price.

(3) The POCs for payments and collections for each Party are identified in annexes to this Arrangement.

(4) The cost of logistics support, supplies and services that are available for a lesser price under any other RP-US agreement will be used under this Arrangement.

Matters regarding customs, duties and taxes shall be dealt with in accordance with the Parties national laws and regulations.

1. Any disagreements regarding the interpretation or application of this Arrangement, any Implementing Arrangements, or transactions executed hereunder shall be resolved through direct consultation between the Parties or through diplomatic channels and shall not be referred to any international tribunal or third party for settlement.

2. Either Party may, at any time, request amendment of this Arrangement by giving the other Party 90 days advance written notice. In the event such a request is made, the two Parties shall promptly enter into negotiations. This Arrangement may only be amended by written agreement between the Parties. Any such amendment shall enter into force in accordance with Article VIII of this Arrangement. The replacement of POCs as listed under Annexes B through N, may be done by the Parties without formal amendment of this Arrangement.

3. Classified information and material provided or generated pursuant to this Arrangement shall be protected in compliance with RP-US Mutual Defense Board Standard Operating Procedures Number 5 dated 9 February 1988.

This Arrangement, which consists of Preamble, Articles I-VIII, and Annexes A through N, shall enter into force on the date of the later written notification by the Parties through diplomatic channels indicating compliance with their respective internal requirements for its entry into force. It shall remain in force for a period of ten (10) years and shall be automatically renewed unless sooner terminated by either Party by giving not less than 180 days notice in writing to the other Party. Notwithstanding termination of this Arrangement, all reimbursement obligations incurred pursuant to its terms shall remain binding on the responsible Party until satisfied.

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective governments, have signed this Arrangement.

DONE, in duplicate, in the English Language, both texts being equally authentic

FOR THE DEPARTMENT OF NATIONAL
DEFENSE OF THE REPUBLIC OF
THE PHILIPPINES

________________________________
Name
Title: Chief of staff, AFP
At:
On:___________________

FOR THE DEPARTMENT OF DEFENSE
OF THE UNITED STATES
OF AMERICA

_______________________________
Name
Title: Commander-in-Chief, USPACOM
At:
On:__________________

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