[Federal Register Volume 60, Number 86 (Thursday, May 4, 1995)]
[Rules and Regulations]
[Pages 21992-21993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10761]



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DEPARTMENT OF DEFENSE

Defense Logistics Agency

48 CFR Part 5452


DLA Acquisition Regulation; Fuel Allocation Procedures

agency: Defense Logistics Agency, DoD.

action: Final rule.

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summary: The Defense Logistics Agency establishes a new 48 CFR Chapter 
54 to contain Defense Logistics Agency acquisition regulations. New 
part 5452 is added to supplement Federal Acquisition Regulation 
49.504(a)(1) and its requirement to use FAR Default clause 52.249-8. 
The Defense Fuel Supply Center (DFSC) proposed three nonstandard 
clauses for bulk, bunkers, into-plane, and posts, camps, and stations 
petroleum solicitations and contracts concerning fuel allocation 
procedures. The three clauses have been incorporated into one clause 
for use by DFSC. This allocation clause permits 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, provided that the shortage is beyond the control and 
without the fault or negligence of the contractor.

effective date: May 4, 1995.

for further information contact: Ms. Melody Reardon, (703) 274-6431.

SUPPLEMENTARY INFORMATION:

A. Background

    On April 28, 1994, DFSC published a proposed rule in the Federal 
Register to incorporate three nonstandard clauses into the DLAR. Public 
comments were requested, received, addressed, and resolved by DFSC. As 
a result, the three nonstandard clauses were consolidated into one 
clause by DFSC, to be used in domestic and overseas petroleum 
solicitations and contracts. DFSC 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. DFSC 
incorporates the nonstandard fuel allocation clause in DLAR in order to 
eliminate the need for annual review and approval. The clause is 
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 final clause is not expected to have 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. since the previous 
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.

C. Paperwork Reduction Act

    The final rule does 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 Part 5452

    Government procurement.

    Accordingly, 48 CFR Chapter 54 is added to read:

CHAPTER 54--DEFENSE LOGISTICS AGENCY, DEPARTMENT OF DEFENSE

PART 5452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 5452.2--Texts of Provisions and Clauses
5452.249  Allocation

    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


5452.249  Allocation

    The Defense Fuel Supply Center is authorized to use the following 
clause in domestic and 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.

Allocation (DFSC 1995) (Deviation) (9F01)

    (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 contractual customers.
    (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 (a);
    (2) Determine that continuance of the contract with the 
quantities as originally stated in the Schedule is in the best 
interests of the Government; or
    (3) Terminate the contract as permitted in (d) 
below. [[Page 21993]] 
    (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 
(a) above. In addition to the criteria in (a) above, the 
Contractor's request shall cite--
    (1) The law, regulation or order, furnishing copies of the same;
    (2) The authority under which 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.

    (e) Except as otherwise stated in (b) above, any volumes omitted 
pursuant to (a) or (b) above 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.

    (f) For Posts, Camps, and Stations contracts, Department of 
Energy priority orders and allocation regulations will take 
precedence over any conflicting provisions of this clause.

    (g) For Bulk Fuels contracts, the provisions contained in (a) 
and (b) above shall be inoperative when 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 pro rata 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% of the 
quantity specified in the Schedule.

[end of clause]

    Dated: April 24, 1995.

Margaret J. Janes,

Assistant Executive Director (Procurement Policy).

[FR Doc. 95-10761 Filed 5-3-95; 8:45 am]

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