[Federal Register Volume 65, Number 216 (Tuesday, November 7, 2000)]
[Proposed Rules]
[Pages 66920-66922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28562]
[[Page 66919]]
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Part V
Department of Defense
General Services Administration
National Aeronautics and Space Administration
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48 CFR Part 2 et al.
Federal Acquisition Regulation; Preference for U.S.-Flag Vessels;
Proposed Rule
Federal Register / Vol. 65, No. 216 / Tuesday, November 7, 2000 /
Proposed Rules
[[Page 66920]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 12, 32, 47, and 52
[FAR Case 1999-024]
RIN 9000-AI97
Federal Acquisition Regulation; Preference for U.S.-Flag Vessels
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) regarding the applicability of
statutory requirements for use of U.S.-flag vessels in the
transportation of supplies by sea. The FAR presently waives these
requirements for subcontracts for the acquisition of commercial items.
DATES: Interested parties should submit comments in writing on or
before January 8, 2001 to be considered in the formulation of a final
rule.
ADDRESSES: Submit written comments to: General Services Administration,
FAR Secretariat (MVRS), 1800 F Street, NW, Room 4035, ATTN: Laurie
Duarte, Washington, DC 20405. Submit electronic comments via the
Internet to: [email protected].
Please submit comments only and cite FAR case 1999-024 in all
correspondence related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, at (202) 501-4755 for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Linda Klein, Procurement Analyst, at (202) 501-
3775. Please cite FAR case 1999-024.
SUPPLEMENTARY INFORMATION:
A. Background
10 U.S.C. 2631 and 46 U.S.C. 1241(b) provide a preference for use
of U.S.-flag vessels for ocean transportation of supplies purchased
under Government contracts. FAR Part 12 presently waives the
requirements of 46 U.S.C. 1241(b) for subcontracts for the acquisition
of commercial items. This rule proposes to amend FAR Part 12 by adding
10 U.S.C. 2631 to the list of laws inapplicable to subcontracts for the
acquisition of commercial items, since civilian agencies may buy
supplies for use of military departments. However, this rule modifies
FAR Parts 12, 47, and associated clauses, to limit the types of
subcontracts for which the waiver of cargo preference statutes is
applicable. The rule is intended to ensure compliance with cargo
preference statutes if ocean cargoes are clearly destined for
Government use, while avoiding disruption of commercial delivery
systems.
This rule also deletes the existing Alternate II of the clause,
52.247-64, as unnecessary and replaces it with a new Alternate II. The
rule adds two definitions, i.e., ``contingency operation'' and
``humanitarian or peacekeeping operation'' to define terms used in the
definition of ``simplified acquisition threshold'', Part 32, Subpart
47.5, and the clause at 52.247-64. These changes are consistent with
previously issued guidance from OFPP.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Councils do not expect this proposed rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because most entities providing ocean transportation are not small
business concerns. An Initial Regulatory Flexibility Analysis has,
therefore, not been performed. We invite comments from small businesses
and other interested parties. The Councils will consider comments from
small entities concerning the affected FAR Parts in accordance with 5
U.S.C. 610. Interested parties must submit such comments separately and
should cite 5 U.S.C. 601, et seq. (FAR case 1999-024), in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) applies because the
proposed rule will increase the flowdown of FAR clause 52.247-64,
Preference for Privately Owned U.S.-Flag Commercial Vessels, to certain
commercial subcontracts. This information collection requirement is
currently approved by the Office of Management and Budget under OMB
Control Number 9000-0061, which also covers other transportation
related information collection requirements. We anticipate an increase
of 9,000 responses per year as a result of this proposed rule, and a
corresponding increase of 900 burden hours per year.
Annual Reporting Burden
Public reporting burden for this collection of information is
estimated to average .05 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
The annual reporting burden is estimated as follows:
Respondents: 65,000.
Responses per respondent: 21.
Total annual responses: 1,385,990.
Preparation hours per response: .05 hours.
Total response burden hours: 65,870.
D. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than January 8, 2001 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035,
Washington, DC 20405.
Public comments are particularly invited on: whether this
collection of information is necessary for the proper performance of
functions of the FAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requester may obtain a copy of the justification from the General
Services Administration, FAR Secretariat (MVR), Room 4035, Washington,
DC 20405, telephone (202) 208-7312. Please cite OMB Control Number
9000-0061, FAR Case 1999-024, Preference for U.S.-Flag Vessels, in all
correspondence.
List of Subjects in 48 CFR Parts 2, 12, 32, 47, and 52
Government procurement.
[[Page 66921]]
Dated: November 2, 2000.
Al Matera,
Acting Director, Federal Acquisition Policy Division.
Therefore, DoD, GSA, and NASA propose that 48 CFR parts 2, 12, 32,
47, and 52 be amended as set forth below:
1. The authority citation for 48 CFR parts 2, 12, 32, 47, and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Amend section 2.101 by adding the definitions ``Contingency
operation'' and ``Humanitarian or peacekeeping operation'', and by
revising the definition ``Simplified acquisition threshold'' to read as
follows:
2.101 Definitions.
* * * * *
Contingency operation means a military operation that--
(1) Is designated by the Secretary of Defense as an operation in
which members of the armed forces are or may become involved in
military actions, operations, or hostilities against an enemy of the
United States or against an opposing military force; or
(2) Results in the call or order to, or retention on, active duty
of members of the uniformed services under 10 U.S.C. 688, 12301(a),
12302, 12304, 12305, or 12406; chapter 15 of 10 U.S.C.; or any other
provision of law during a war or during a national emergency declared
by the President or Congress (10 U.S.C. 101(a)(13)).
* * * * *
Humanitarian or peacekeeping operation means a military operation
in support of the provision of humanitarian or foreign disaster
assistance or in support of a peacekeeping operation under chapter VI
or VII of the Charter of the United Nations. The term does not include
routine training, force rotation, or stationing (10 U.S.C. 2302(8) and
41 U.S.C. 259(d)(2)(B)).
* * * * *
Simplified acquisition threshold means $100,000, except that in the
case of any contract to be awarded and performed, or purchase to be
made, outside the United States in support of a contingency operation
or a humanitarian or peacekeeping operation, the term means $200,000.
* * * * *
PART 12--ACQUISITION OF COMMERCIAL ITEMS
3. Amend section 12.504 by redesignating paragraphs (a)(1) through
(a)(11) as (a)(2) through (a)(12), respectively; by adding a new
paragraph (a)(1); and by revising newly designated paragraph (a)(11) to
read as follows:
12.504 Applicability of certain laws to subcontracts for the
acquisition of commercial items.
(a) * * *
(1) 10 U.S.C. 2631, Transportation of Supplies by Sea (except for
the types of subcontracts listed at 47.504(d)).
* * * * *
(11) 46 U.S.C. 1241(b), Transportation in American Vessels of
Government Personnel and Certain Cargo (see subpart 47.5) (except for
the types of subcontracts listed at 47.504(d)).
* * * * *
PART 32--CONTRACT FINANCING
32.1103 [Amended]
4. Amend section 32.1103 in paragraph (e) by removing ``10 U.S.C.
101(a)(13)'' and adding ``2.101'' in its place.
PART 47--TRANSPORTATION
5. Amend section 47.504 by revising paragraph (d) to read as
follows:
47.504 Exceptions.
* * * * *
(d) Subcontracts for the acquisition of commercial items or
commercial components (see 12.504(a)(1) and (a)(11)). This exception
does not apply to--
(1) Grants-in-aid shipments, such as agricultural and food-aid
shipments;
(2) Shipments covered under 46 App. U.S.C. 1241-1, such as those
generated by Export-Import Bank loans or guarantees;
(3) Subcontracts under--
(i) Government contracts or agreements for ocean transportation
services; or
(ii) Construction contracts; or
(4) Shipments of commercial items that are--
(i) Items the contractor is reselling or distributing to the
Government without adding value (see FAR 12.501(b)). Generally, the
contractor does not add value to the items when it subcontracts items
for f.o.b. destination shipment; or
(ii) Shipped in direct support of U.S. military--
(A) Contingency operations;
(B) Exercises; or
(C) Forces deployed in connection with United Nations or North
Atlantic Treaty Organization humanitarian or peacekeeping operations.
6. Revise section 47.507 to read as follows:
47.507 Contract clauses.
(a)(1) Insert the clause at 52.247-64, Preference for Privately
Owned U.S.-Flag Commercial Vessels, in solicitations and contracts that
may involve ocean transportation of supplies subject to the Cargo
Preference Act of 1954. (For application of the Cargo Preference Act of
1954, see 47.502(a)(3), 47.503(a), and 47.504.)
(2) If an applicable statute requires, or if it has been determined
under agency procedures, that the supplies to be furnished under the
contract must be transported exclusively in privately owned U.S.-flag
commercial vessels (see 47.502(a)(1) and 47.503(b)), use the clause
with its Alternate I.
(3) Except for contracts or agreements for ocean transportation
services or construction contracts, use the clause with its Alternate
II if any of the supplies to be transported are commercial items that
are shipped in direct support of U.S. military--
(i) Contingency operations;
(ii) Exercises; or
(iii) Forces deployed in connection with United Nations or North
Atlantic Treaty Organization humanitarian or peacekeeping operations.
(b) The contracting officer may insert in solicitations and
contracts, under agency procedures, additional appropriate clauses
concerning the vessels to be used.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
7. Amend section 52.212-5 by revising the date of the clause, the
introductory text of paragraph (e), and paragraph (e)(4) to read as
follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (Date)
* * * * *
(e) Notwithstanding the requirements of the clauses in
paragraphs (a), (b), (c), and (d) of this clause, the Contractor is
not required to include any FAR clause, other than those listed
below (and as may be required by addenda to this paragraph to
establish the reasonableness of prices under part 15), in a
subcontract for commercial items or commercial components--
* * * * *
(4) 52.247-64, Preference for Privately Owned U.S.-Flag
Commercial Vessels (46 U.S.C. 1241 and 10 U.S.C. 2631). (Flowdown
[[Page 66922]]
required in accordance with paragraph (d) of the clause in the
contract entitled ``Preference for Privately Owned U.S.-Flag
Commercial Vessels'' (FAR 52.247-64)); and
* * * * *
(End of clause)
8. Amend section 52.244-6 by revising the date of the clause and
paragraph (c)(4) to read as follows:
52.244-6 Subcontracts for Commercial Items and Commercial Components.
* * * * *
Subcontracts for Commercial Items and Commercial Components (Date)
* * * * *
(c) * * *
(4) 52.247-64, Preference for Privately Owned U.S.-Flag
Commercial Vessels (46 U.S.C. 1241 and 10 U.S.C. 2631). (Flowdown
required in accordance with paragraph (d) of the clause in this
contract entitled ``Preference for Privately Owned U.S.-Flag
Commercial Vessels'' (FAR 52.247-64).)
* * * * *
(End of clause)
9. Amend section 52.247-64 by--
a. Revising the date of the clause;
b. Removing ``The'' from the beginning of the introductory text of
paragraph (a) and adding ``Except as provided in paragraph (e) of this
clause, the'' in its place;
c. Removing the period at the end of paragraph (d) and adding ``,
except those described in paragraph (e)(4).'' in its place;
d. Removing ``and'' at the end of paragraph (e)(2);
e. Removing the period at the end of paragraph (e)(3) and adding
``; and'' in its place;
f. Adding paragraph (e)(4); and
g. Revising Alternates I and II to read as follows:
52.247-64 Preference for Privately Owned U.S.-Flag Commercial Vessels.
* * * * *
Preference for Privately Owned U.S.-Flag Commercial Vessels (Date)
* * * * *
(e) * * *
(4) Subcontracts or purchase orders for the acquisition of
commercial items unless--
(i) This contract is--
(A) A contract or agreement for ocean transportation services;
or
(B) A construction contract; or
(ii) The supplies being transported are--
(A) Items the Contractor is reselling or distributing to the
Government without adding value. (Generally, the Contractor does not
add value to the items when it subcontracts items for f.o.b.
destination shipment); or
(B) Shipped in direct support of U.S. military--
(1) Contingency operations;
(2) Exercises; or
(3) Forces deployed in connection with United Nations or North
Atlantic Treaty Organization humanitarian or peacekeeping
operations.
* * * * *
Alternate I (Date). As prescribed in 47.507(a)(2), substitute
the following paragraphs (a) and (b) for paragraphs (a) and (b) of
the basic clause:
(a) Except as provided in paragraphs (b) and (e) of this clause,
the Contractor shall use privately owned U.S.-flag commercial
vessels, and no others, in the ocean transportation of any supplies
to be furnished under this contract.
(b) If such vessels are not available for timely shipment at
rates that are fair and reasonable for privately owned U.S.-flag
commercial vessels, the Contractor shall notify the Contracting
Officer and request (1) authorization to ship in foreign-flag
vessels, or (2) designation of available U.S.-flag vessels. If the
Contractor is authorized in writing by the Contracting Officer to
ship the supplies in foreign-flag vessels, the contract price shall
be equitably adjusted to reflect the difference in costs of shipping
the supplies in privately owned U.S.-flag commercial vessels and in
foreign-flag vessels.
Alternate II (Date). As prescribed in 47.507(a)(3), substitute
the following paragraph (e) for paragraph (e) of the basic clause:
(e) The requirement in paragraph (a) does not apply to--
(1) Cargoes carried in vessels of the Panama Canal Commission or
as required or authorized by law or treaty;
(2) Ocean transportation between foreign countries of supplies
purchased with foreign currencies made available, or derived from
funds that are made available, under the Foreign Assistance Act of
1961 (22 U.S.C. 2353);
(3) Shipments of classified supplies when the classification
prohibits the use of non-Government vessels; and
(4) Subcontracts or purchase orders under this contract for the
acquisition of commercial items unless the supplies being
transported are--
(i) Items the Contractor is reselling or distributing to the
Government without adding value. (Generally, the Contractor does not
add value to the items when it subcontracts items for f.o.b.
destination shipment); or
(ii) Shipments in direct support of U.S. military--
(A) Contingency operations;
(B) Exercises; or
(C) Forces deployed in connection with United Nations or North
Atlantic Treaty Organization humanitarian or peacekeeping
operations. (Note: This contract requires shipment of commercial
items in direct support of U.S. military contingency operations,
exercises, or forces deployed in connection with United Nations or
North Atlantic Treaty Organization humanitarian or peacekeeping
operations.)
[FR Doc. 00-28562 Filed 11-6-00; 8:45 am]
BILLING CODE 6820-EP-P