[Federal Register Volume 59, Number 81 (Thursday, April 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9961]


[Federal Register: April 28, 1994]


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DEPARTMENT OF DEFENSE
48 CFR Part 5452


DLA Acquisition Regulation; Fuel Allocation Procedures

AGENCY: Defense Logistics Agency, DoD.

ACTION: Proposed rule and request for comments.

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SUMMARY: The Defense Logistics Agency (DLA) proposes to add coverage to 
a proposed to 48 CFR Chapter 54, which is published elsewhere in this 
issue of the Federal Register. The proposed changes affect regulations 
on Solicitation Provisions and Contract Clauses. Comments are hereby 
requested on the proposed changes which implement and supplement the 
Federal Acquisition Regulation 49.504(a)(1) which requires the use of 
FAR Default clause 52.249-8. The changes are required in order to 
incorporate three nonstandard clauses in bulk, bunkers, intoplane, and 
posts, camps, and stations petroleum solicitations and contracts 
concerning fuel allocation procedures. These allocation clauses permit 
DFSC contractors to supply less than the full amount of fuel contracted 
by the government, without being terminated for default, during periods 
of exceptional fuel shortages. The proposed coverage is being published 
in the Federal Register because it is expected to have an effect beyond 
the internal operating procedures of DLA and, in some cases, a 
significant cost or administrative impact on contractors.

DATES: Comments on the proposed DLAR rules must be submitted in writing 
to the address shown below on or before June 27, 1994, to be considered 
in the formulation of the final rules.

ADDRESSES: Interested parties should submit written comments to Defense 
Logistics Agency, Directorate of Procurement, Contract Policy Team 
(AQPLL), Ms. Melody Reardon, Cameron Station, Alexandria, Virginia 
22304-6100 FAX: (703) 274-0130.

FOR FURTHER INFORMATION CONTACT:
Ms. Melody Reardon, Defense Logistics Agency, AQPLL (703) 274-6431.

SUPPLEMENTARY INFORMATION:

A. Background

    Defense Fuel Supply Center has historically utilized deviations to 
FAR termination for default clauses in order to provide for 
contingencies in the case of fuel allocations by contractors. These 
deviations have been approved on an annual basis since 1974. Defense 
Fuel Supply Center proposed incorporating these three nonstandard 
clauses in DLAR to eliminate the need for annual review and approval. 
The clauses are necessary to protect potential contractors from default 
proceedings and ensure the continuance of a competitive procurement 
environment for government petroleum requirements. Allocation of fuel 
to customers on a pro rata basis during periods of extreme shortage is 
a standard practice in the petroleum industry.

B. Regulatory Flexibility Act

    The proposed clauses are not expected to have significant economic 
impacts on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C1 601 et seq. since the clauses 
have been utilized for many years by Defense Fuel Supply Center as 
deviations to FAR. An initial regulatory flexibility analysis has, 
therefore, not been performed. Comments are invited from small 
businesses and other interested parties. Comments from small entities 
concerning the affected FAR sections will also be considered in 
accordance with section 610 of the Act. Such comments must be submitted 
separately and cite this case in correspondence.

C. Paperwork Reduction Act

    The proposed rules do not impose any reporting or record keeping 
requirements which require the approval of OMB under 44 U.S.C. 3501, et 
seq.

List of Subjects in 48 CFR 5452

    Government procurement.

    Therefore, it is proposed that 48 CFR chapter 54 part 5452, which 
is proposed to be added elsewhere in this issue of the Federal 
Register, be amended to add the following coverage:

PART 5452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    1. The authority citation for part 5452 continues to read as 
follows:

    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, 48 CFR part 1, subpart 
1.3 and 48 CFR part 201, subpart 201.3.

    2. Part 5452 is amended by adding sections 5452.249-9 F01, 
5452.249-9F02 and 5452.249-9F04 reading as follows:


5452.249-9F01  Allocation.

    The Defense Fuel Supply Center will use the following clause in 
overseas petroleum solicitations/contracts including those for Canal 
Zone and Puerto Rico when a fixed-price contract is contemplated and 
the contract amount is expected to exceed the small purchase 
limitation.


5452.249-9F01  Allocation (DFSC) (May 1992) (Deviation)

    (a) Reduced supplies.
    If, for any cause beyond the control and without the fault or 
negligence of the Contractor, the total supply of crude oil and/or 
refined petroleum product is reduced below the level that would have 
otherwise been available to the Contractor, the Contractor allocates 
to its regular customers its remaining available supplies of crude 
oil or product, then the Contractor may also allocate to the U.S. 
Government supplies to be delivered under this contract, provided--
    (1) Prompt notice of and evidence substantiating the necessity 
to allocate and describing the allocation rate for all the 
Contractor's customers are submitted to the Contracting Officer;
    (2) Allocation among the Contractor's regular customers is made 
on a fair and reasonable basis (except where allocation on a 
different basis is required by a governmental authority, agency or 
instrumentality); and
    (3) Reduction of the quantity of product due the Government 
under this contract shall not exceed the pro rata amount by which 
the Contractor reduces delivery to its other customers similarly 
situated.
    (b) Additional supplies.
    If, after the event causing the shortage of crude oil and/or 
refined petroleum product as described in (a) above, additional 
supply becomes available to the Contractor, the Contracting Officer 
may choose any one of the following three possible courses of 
action:
    (1) accept an updated pro rata reduction as outlined in 
paragraph (a); or
    (2) Determine that continuance of the contract with the 
quantities as originally stated in the Schedule is in the best 
interests of the Government, in which case negotiations for an 
equitable adjustment in price will be properly undertaken; or
    (3) Terminate the contract as permitted in paragraph (d) below.
    (c) Reduced deliveries.
    If the Contractor believes that a law, regulation, or order of a 
foreign government requires the Contractor to deliver less than the 
quantity set forth in the Schedule for any location within that 
country, the Contractor may request allocation in accordance with 
paragraph (a) of this clause. In addition, to the criteria in 
paragraph (a) above, the Contractor's request shall cite--
    (1) The law, regulation or order, furnishing copies of the same;
    (2) The authority under which it is imposed; and
    (3) The nature of the Government's waiver, exception, and 
enforcement procedure. The Contracting Officer will promptly review 
the matter and advise the Contractor whether or not the need to 
allocate has been substantiated. If the law, regulation, or order 
requiring the Contractor to reduce deliveries ceases to be 
effective, the Contractor shall resume deliveries in accordance with 
the original Schedule.
    (d) If, as a result of reduced deliveries permitted by (a), (b) 
or (c) above, the Contracting Officer decides that continuation of 
this contract is no longer in the best interests of the Government, 
the Government may terminate this contract or any quantity 
thereunder, by written notice, at no cost to the Government. 
However, the Government shall not be relieved of its obligation to 
pay for supplies actually delivered to and accepted by it.
    (d) Except as otherwise stated in paragraph (b), any volumes 
omitted pursuant to paragraphs (a) or (b) of this clause shall be 
deleted from this contract, and the Contractor shall have no 
continuing obligation, so far as this contract is concerned, to make 
up such omitted supplies.
    [End of Clause]


5452.249-9F02  Domestic Allocation.

    The Defense Fuel Supply Center will use the following clause in 
domestic bulk, bunkers, and posts, camps, and stations solicitations/
contracts when a fixed-price contract is contemplated and the contract 
amount is expected to exceed the small purchase limitation.


5452.249-9F02  Domestic Allocation (DFSC) (Jun 1989) (Deviation)

    (a) If the Contractor's total available supply of refined 
petroleum products is reduced due to factors beyond its control and 
without its fault or negligence, and if as a result of this reduced 
supply, the Contractor is forced to allocate remaining supplies 
among its regular customers and does so on a fair and equatable 
basis, then the Contractor may reduce the quantity of product due 
the Government under this contact on a pro rata basis with the 
Contractor's other regular customers.
    (b) The contractor shall provide prompt written notice to the 
Contracting Officer of its intention to allocate, provide evidence 
substantiating the necessity for allocation, and describe the 
allocation rates applicable to all regular customers.
    (c) If, as a result of reduced deliveries permitted by paragraph 
(a) above, the Contracting Officer decides that continuation of this 
contract is no longer in the best interests of the Government, the 
Government may terminate this contract or any quantity thereunder, 
by written notice and at no cost to the Government. However, the 
Government shall pay for supplies actually delivered to and accepted 
by it.
    (d) Department of Energy priority orders and allocation 
regulations will take precedence over any provisions of this clause.
    (e) For domestic bulk and bunkers solicitations/contracts, the 
provisions contained in (a) above shall be inoperative where the 
Secretary of Defense makes a written determination that it is 
essential to the National Defense that the Defense Fuel Supply 
Center be provided contract volumes exceeding the amount of product 
to which it would otherwise be entitled. However, in no case will 
the Contractor be required, under this contract, to supply more than 
100 percent of the quantity specified in the Schedule.
    [End of Clause]


5452.249-9F04  Product Availability.

    The Defense Fuel Supply Center will use the following clause in all 
domestic into-plane solicitations/contracts when a firm fixed-price 
contract is contemplated and the contract amount is expected to exceed 
the small purchase limitation.


5452.249-9F04  Product Availability (DFSC) (Jun 1979) (Deviation)

    (a)(1) If, a result of the actions of the supplier(s) listed by 
reference in the Economic Price Adjustment clause which are beyond 
the control and without the fault or negligence of the Contractor, 
reduced supply of a referenced product is made available to the 
Contractor, and
    (2) If, as a result of this reduced supply the contractor 
allocates its remaining supply among it regular customers on a fair 
and reasonable basis, the contractor may reduce the quantity of 
product due the Government under this contract on a pro rata basis 
with the Contractor's other regular customers.
    (b) The Contractor will provide prompt written notice to the 
Contracting Office of its intention to allocate, provide evidence 
substantiating the necessity for allocation, and describe the 
allocation rates applicable to all regular customers.
    (c) If, as a result of reduced deliveries permitted by (a)(2) 
above, the Contracting Officer decides that continuation of this 
contract is no longer in the best interest of the Government, the 
Government may terminate this contract, or any quantities 
thereunder, by written notice at no cost to the Government.
    [End of Clause]
Marilyn S. Barnett,
Executive Director (Procurement).
[FR Doc. 94-9961 Filed 4-26-94; 8:45 am]
BILLING CODE 3620-01-M