[Federal Register Volume 60, Number 202 (Thursday, October 19, 1995)]
[Notices]
[Pages 54144-54150]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25896]



      

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Part VI





Department of Transportation





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Maritime Administration



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Voluntary Intermodal Sealift Agreement; Notice

  Federal Register / Vol. 60, No. 202 / Thursday, October 19, 1995 / 
Notices   

[[Page 54144]]


DEPARTMENT OF TRANSPORTATION

Maritime Administration


Voluntary Intermodal Sealift Agreement

Agency: Maritime Administration, DOT.

Action: Notice of Voluntary Intermodal Sealift Agreement (VISA).

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SUMMARY: The Maritime Administration (MARAD) announces establishment of 
the Voluntary Intermodal Sealift Agreement (VISA), pursuant to 
provision of the Defense Production Act of 1950, as amended. The 
purpose of the VISA is to make intermodal shipping services/systems, 
including ships, ships' space, intermodal equipment and related 
management services, available to the Department of Defense as required 
to support the emergency deployment and sustainment of U.S. military 
forces. This is to be accomplished through cooperation among the 
maritime industry, the Department of Transportation and the Department 
of Defense.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas M.P. Christensen, Director, 
Office of National Security Plans, Room P1-1303, Maritime 
Administration, 400 Seventh Street S.W., Washington, DC 20590, (202) 
366-5900, Fax (202) 488-0941.

SUPPLEMENTARY INFORMATION: Section 708 of the Defense Production Act of 
1950 (50 U.S.C. App. 2158), as implemented by regulations of the 
Federal Emergency Management Agency (44 CFR Part 332), ``Voluntary 
agreements for preparedness programs and expansion of production 
capacity and supply'', authorizes the President, upon a finding that 
conditions exist which may pose a direct threat to the national defense 
or its preparedness programs, ``* * * to consult with representatives 
of industry, business, financing, agriculture, labor and other 
interests * * *'' in order to provide the making of such voluntary 
agreements. It further authorizes the President to delegate that 
authority to individuals who are appointed by and with the advice and 
consent of the Senate, upon the condition that such individuals obtain 
the prior approval of the Attorney General after the Attorney General's 
consultation with the Federal Trade Commission. Section 501 of 
Executive Order 12919, as amended, delegated this authority of the 
President to the Secretary of Transportation, among others. By DOT 
Order 1900.8, the Secretary delegated to the Maritime Administrator the 
authority under which the VISA is sponsored. Through advance 
arrangements in joint planning, it is intended that the participants 
that are party to a VISA will provide capacity to support a significant 
portion of surge and sustainment requirements in the deployment of U.S. 
military forces.
    A proposed draft text of the VISA was published in the Federal 
Register on August 17, 1994 (59 FR 42466), with a notice of a public 
meeting. The meeting was held on August 31, 1994, and a transcript of 
the proceedings was prepared. Another notice, published in the Federal 
Register on August 31, 1994 (59 FR 45061), invited the public to submit 
written comments on the draft VISA text. Several comments were 
received, considered and placed in a public file that also contains the 
above mentioned published notices and transcript. Further discussions 
among MARAD, the United States Transportation Command (USTRANSCOM), and 
representatives of the U.S. intermodal shipping industry have taken 
place, resulting in publication of this text of the VISA in which 
USTRANSCOM, the Department of Justice and the Federal Trade Commission 
have concurred.
    The VISA text being published herein facilitiates the incremental 
activation of resources in staged response to an emergency, i.e., Stage 
I, Stage II, and Stage III. MARAD, USTRANSCOM, and industry 
representatives have recognized that further development is necessary 
before implementation of Stages I and II. Therefore, only contractual 
commitments to Stage III will be implemented at this time.
    Copies of the VISA and the associated application form are being 
sent, unsolicited, to U.S.-owned companies which provide intermodal 
shipping services/systems, accompanied by an invitation to become a 
participant. Copies will also be made available to the public upon 
request.
    Text of the Voluntary Intermodal Sealift Agreement:

Voluntary Intermodal Sealift Agreement (VISA)

Table of Contents

Abbreviations
Definitions
Preface
Voluntary Intermodal Sealift Agreement
I. Purpose
II. Authorities
III. General
    A. Concept
    B. Responsibilities
    C. Modification/Amendment of this Agreement
    D. Administrative Expenses
    E. Record Keeping
    F. MARAD Reporting Requirements
    G. Plan of Action
IV. Joint Planning Advisory Group
V. Activation of this Agreement
    A. Determination of Necessity
    B. Peacetime
    C. Stage I
    D. Stage II
    E. Stage III
    F. Termination of Charters, Leases and Other Contractual 
Arrangements
    G. Voluntary Capacity
VI. Terms and Conditions
    A. Participation
    B. Agreement of Participant
    C. Effective Date and Duration of Participation
    D. Withdrawal from this Agreement
    E. Standby Period
    F. Rules and Regulations
    G. Pooling Resources
    H. Enrollment of Ships and Equipment
    I. War Risk Insurance
    J. Antitrust Defense
    K. Breach of Contract Defense
VII. Plan of Action: Development Meeting
VIII. Application and Agreement

Abbreviations

``USCINCTRANS''--Commander in Chief, United States Transportation 
Command
``DoD''--Department of Defense
``DOT''--Department of Transportation
``FTC''--Federal Trade Commission
``FEMA''--Federal Emergency Management Agency
``JPAG''--Joint Planning Advisory Group
``MARAD''--Maritime Administration, DOT
``MSC''--Military Sealift Command
``NDRF''--National Defense Reserve Fleet maintained by MARAD
``RRF''--Ready Reserve Force component of the NDRF
``SecDef''--Secretary of Defense
``SecTrans''--Secretary of Transportation
``USTRANSCOM''--United States Transportation Command (including its 
sealift transportation component, Military Sealift Command)

Definitions

    ``Administrator''--Maritime Administrator.
    ``Agreement''--Agreement means an understanding, arrangement or 
association (written or oral) and any modification or cancellation 
thereof. For the purpose of this document, Agreement (proper noun) 
refers to this actual agreement, the Voluntary Intermodal Sealift 
Agreement.
    ``Attorney General''--Attorney General of the United States.
    ``Availability''--An asset or service is available if it is both 
suitable and capable of meeting cargo or other requirements within the 
prescribed delivery or performance date. 

[[Page 54145]]

    ``Chairman''--Chairman of the FTC.
    ``Charter''--A contract between a shipper and shipping company for 
the use of the entire vessel that details all aspects of the service, 
including payment, to be performed by each party. Charter contracts may 
be for the entire vessel, for a specific voyage, or for a specific time 
period.
    ``Commercial''--Transportation service provided by a private ocean 
carrier to a private or government shipper. The type of service may be 
either common carrier or contract carriage.
    ``Common carrier''--A person holding itself out to the general 
public to provide transportation by water of passengers or cargo for 
compensation which assumes responsibility for transportation from port 
or point of receipt to port or point of destination, which utilizes a 
vessel operating on the high seas.
    ``Contingency''--An emergency involving military forces caused by 
natural disasters, terrorists, subversives or by required military 
operations whether or not there is a declaration of war or national 
emergency.
    ``Controlling interest''--More than a 50 percent interest by stock 
ownership or otherwise.
    ``Director''--Director of FEMA.
    ``Foreign flag''--A vessel registered and documented under the law 
of a country other than the United States of America.
    ``Intermodal equipment''--Containers (including specialized 
equipment), chassis, trailers, tractors, cranes and other material 
handling equipment, as well as other ancillary items.
    ``Liner''--Type of service offered on a definite advertised 
schedule (i.e., a scheduled common carrier service), given relatively 
frequent sailing between specific U.S. ports or ranges and designated 
foreign ports or ranges. The term includes ocean common carrier 
services within the meaning of the Shipping Act of 1984.
    ``Management services''--Management expertise and experience, 
intermodal terminal management, information resources and control and 
tracking systems.
    ``Non-liner''--Type of service offered by vessels that are 
chartered or otherwise hired for special voyages or period. Sailing 
schedules are not predetermined or fixed.
    ``Organic sealift''--Ships considered to be under government 
control or long-term charter--Fast Sealift Ships, Ready Reserve Force 
and commercial ships under long-term charter to DoD.
    ``Participant''--A signatory party to this Agreement, and otherwise 
as defined in this Agreement, VI.A., sometimes referred to as ``Program 
Participant.''
    ``Person''--Includes individuals, corporations, partnerships, and 
associations existing under or authorized by the laws of the United 
States or of a foreign country.
    ``Pooling''--An agreement among participants to divide cargo 
offerings, revenues, losses, assets (e.g., vessels, facilities, 
material handling equipment, etc.), trade routes, etc., in accordance 
with an established formula or scheme. Any such agreement shall be 
between the participants only, and shall NOT be part of a contract with 
the government. Participants may not discuss their commercial 
commitments or other commercial information such as their rates, 
revenues, losses or tonnage with pool participants.
    ``Prenegotiated Rates''--Rates developed for use during program 
stages. For rates that are not prenegotiated, a prenegotiated rate 
methodology will be developed.
    ``Representative of SecDef''--USCINCTRANS.
    ``Secretary''--Secretary of Transportation.
    ``Service contract''--A contract between a shipper and an ocean 
common carrier or conference in accordance with the provisions of the 
1984 Shipping Act.
    ``Teaming''--A combination of participants to bid and perform under 
a government contract. Similar to a joint venture, wherein two or more 
parties form a partnership and bid on a contract under the name of the 
partnership, vice the name of each individual party. Any teaming 
arrangement between or among ocean common carriers to concertedly offer 
rates to DoD may be regarded as an agreement subject to filing and 
review requirements under the Shipping Act of 1984 or the Shipping Act 
of 1916.
    ``U.S. Flag''--A vessel registered and documented under the law of 
the United States of America.
    ``Volunteers''--Any ocean carrier (liner or non-liner) or vessel 
owner/operator who offers to make capacity, resources or systems 
available under the terms of the Agreement for contract to USTRANSCOM 
to support military requirements sooner than mandatory under the 
Agreement.

Preface

    The Administrator, pursuant to the authority contained in Section 
708 of the Defense Production Act of 1950, as amended (50 U.S.C. App. 
2158)(Section 708), in collaboration with representatives of the 
intermodal shipping industry and USTRANSCOM, has developed this 
agreement to provide commercial sealift and intermodal shipping 
services/systems necessary to meet national defense requirements.
    USTRANSCOM through its designee(s) procures commercial shipping 
capacity to meet normal peacetime requirements for ships and intermodal 
shipping services/systems through arrangements with common carriers, 
with contract carriers and by charter. DoD (through USTRANSCOM) and 
MARAD maintain and operate a fleet of ships owned by or under charter 
to the federal government to meet the logistic needs of the military 
services which cannot be met by commercial service. Ships of the Ready 
Reserve Force (RRF) may be selectively activated for peacetime military 
tests and exercises, and to satisfy military operational requirements 
which cannot be met by commercial shipping in time of war, national 
emergency, or military contingency. Foreign-flag shipping is used only 
in accordance with applicable laws and policies.
    This agreement provides DoD a coordinated, seamless transition from 
peacetime to wartime for the acquisition of commercial sealift and 
intermodal capability, as necessary, to augment DoD's organic sealift 
capabilities to meet DoD requirements. It establishes the terms, 
conditions and general procedures by which sealift carriers or asset 
managers may become Participants. This Agreement is designed to create 
close working relationships among MARAD, USTRANSCOM and Participants 
through which military needs and the needs of the civil economy can be 
met by cooperative action. Through advance arrangements in joint 
planning between USTRANSCOM, MARAD and the Participants, it is intended 
that the Participants will provide predetermined capacity in designated 
stages to support DoD contingency surge and sustainment requirements.
    Participants to this program will be afforded first opportunity to 
meet DoD peacetime and wartime requirements. In the event program 
Participants are unable to meet fully the requirements in a 
contingency, the shipping capacity made available under this Agreement 
may be supplemented by ships requisitioned, under Section 902 of 
Merchant Marine Act 1936 (as amended), from non-Participants in this 
Agreement and from Participants. In addition, containers and chassis 
made available under this Agreement may be supplemented by services and 
equipment accessed by the Administrator through the provisions of 46 
CFR Part 340. 

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    SecDef will be asked to approve this Agreement as a sealift 
readiness program for the purpose of Section 909 of the Merchant Marine 
Act, 1936, as amended (46 App. U.S.C. 1248) (Section 909).

Voluntary Intermodal Sealift Agreement

I. Purpose

    A. The Administrator has found, in accordance with Section 
708(c)(1) of the Defense Production Act of 1950, that conditions exist 
which may pose a direct threat to the national defense of the United 
States or its preparedness programs and, under the provisions of 
Section 708, has certified to the Attorney General that a standby 
agreement where eligible carriers agree to become program Participants 
and provide utilization of intermodal shipping services/systems is 
necessary for the national defense. The Attorney General, in 
consultation with the Chairman, has issued a finding that dry cargo 
capacity to meet national defense requirements cannot be provided by 
the industry through a voluntary agreement having less anticompetitive 
effects or without a voluntary agreement.
    B. The purpose of this Agreement is to provide a seamless, time-
phased transition from peace to wartime operations through coordinated, 
prenegotiated contractually assured access to the type and quantity of 
sealift capability, when and where necessary, to deploy and sustain 
U.S. forces. It establishes procedures for the commitment of intermodal 
shipping services/systems to satisfy military requirements. This 
Agreement will change from standby to active status upon activation of 
any of the Stages described in Section V.
    C. The objectives of this Agreement are to promote and facilitate 
DoD's use of existing commercial integrated intermodal transportation 
systems, and to maximize DoD's use of commercial transportation 
resources, while at the same time attempting to minimize disruption to 
commercial operations.
    D. Participants' capacity in this Agreement may include all 
intermodal shipping services/systems and all ship types, including 
container, partial container, container/bulk, container/roll-on/roll-
off, roll-on/roll-off (of all varieties), breakbulk ships, and barge 
carrier (LASH, SeaBee, etc.).
    E. It is intended that Participants in this Agreement will 
contractually provide time-phased, predetermined capacity to support 
military requirements.

II. Authorities

A. MARAD

    1. Sections 101 and 708 of the Defense Production Act, as amended 
(50 U.S.C. App. 2158); Executive Order 12919, 59 FR 29525, June 7, 
1994; Executive Order 12148, 3 CFR 1979 Comp., p. 412, as amended; 44 
CFR Part 332; DOT Order 1900.8; 46 CFR Part 340.
    2. Section 501 of Executive Order 12919, as amended, delegated the 
authority of the President under Section 708 to the Secretary, among 
others. By DOT Order 1900.8, the Secretary delegated to the 
Administrator the authority under which this Agreement is sponsored.

B. USTRANSCOM

    1. Section 113 and Chapter 6 of Title 10 of the United States Code.
    2. DoD Directive 5158.4 designating USCINCTRANS to provide air, 
land, and sea transportation for the DoD.

III. General

A. Concept

    1. This Agreement provides arrangements jointly planned by MARAD, 
USTRANSCOM, and Participants and by which MARAD will allocate U.S. Flag 
and/or controlled vessels and intermodal services to meet DoD 
determined requirements. These sealift resources may be incrementally 
activated in staged response. Activation of Stages I and II will be in 
accordance with prenegotiated contractual commitments entered into 
between Participants and USTRANSCOM or its designee. Stage III 
activation will be in accordance with procedures developed by 
USTRANSCOM, MARAD and Participants using pre-approved rate 
methodologies. Stages I and II would require early access to 
Participants' resources, while Stage III would be activated only after 
Stage I and II resources are totally committed and adequate shipping 
services are not available through established transportation 
practices. In addition to vessels and intermodal equipment, USTRANSCOM 
may contract for management expertise to operate more than one 
carrier's resources as complete systems.
    a. Stages I and II will be activated by USCINCTRANS. The 
Administrator will be notified that USTRANSCOM will implement the pre-
approved DoD contracts, as necessary, with the Participant carriers to 
meet the contingency requirements. MARAD will ensure that the necessary 
Defense Production Act procedures and authorities are in place for the 
carriers to immediately implement any pooling agreements they may have 
executed to meet the Program's contract requirements. Arrangements 
comprising Stages I and II will be pre-approved by MARAD. The 
contracts, with agreed terms, conditions and rates or rate methodology, 
will provide guaranteed access to specific carrier capability to be 
provided within specified time frames. The amount of shipping capacity 
to be committed by a Participant under such a contract between 
Participants and USTRANSCOM or its designee will be provided to MARAD 
during peacetime for pre-approval to ensure that the amount of sealift 
assets committed to Stages I and II will not have an adverse, national 
economic impact.
    b. Stage III will be activated by SecTrans, upon request by 
USCINCTRANS (on approval by SecDef), when defense sealift requirements 
exceed the capabilities provided by Stages I and II and cannot be 
obtained through established transportation practices, including 
voluntary commitments outside this Agreement. MARAD will allocate 
Participants' intermodal shipping services/systems to meet Stage III 
requirements. Upon allocation, USTRANSCOM or its designee will execute 
the necessary contracts, using a pre-approved rate methodology, to meet 
DoD requirements established during joint planning.
    2. USTRANSCOM may obtain sealift capacity on a voluntary basis 
prior to activating Stages I and III. Participants will be given first 
opportunity to provide capacity voluntarily to meet DoD requirements. 
If Participant carriers volunteer capacity prior to Stage I, they may 
request DoD to execute Stage I contracts in order to activate requisite 
DPA defense. DoD/USTRANSCOM approval of such requests will not be 
unreasonably withheld. If voluntary capacity from Participants is 
insufficient and/or shortfalls persist prior to activating Stage III 
after exhausting the Participants' Stage I and II contractually 
committed resources, USTRANSCOM may obtain sealift capacity voluntarily 
from non-Participants, without restriction. Following is the sequence 
of actions to obtain sealift capacity:
    a. Use existing DoD contracts for liner and chartered vessels.
    b. Use DoD/DOT organic lift; plus request for shipping capacity 
committed via Treaty agreement and coalition.
    c. Use volunteers from within the Program.
    d. Contract outside the Program without restriction to meet 
specific requirements not contractually 

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committed or not voluntarily offered by Participants within the 
Program.
    e. Activate Stage I.
    f. Activate Stage II.
    g. Use all other established transportation practices.
    h. Activate Stage III.
    3. If sufficient sealift assets are not available through 
established channels, SecTrans, upon declaration of war or Presidential 
declaration of national emergency, will requisition necessary sealift 
capability using the authorities of Section 902, Merchant Marine Act of 
1936.

B. Responsibilities

    1. USTRANSCOM shall:
    a. Define the time-phased requirement for the numbers and types of 
sealift capacity and resources needed in Stages I and II to augment DoD 
sealift resources. Define Stage III requirements.
    b. Advise MARAD annually of the numbers and types of sealift 
capacity and resources needed for all three stages.
    c. Obtain sealift capacity through the implementation of specific 
prenegotiated contracts with Program Participants prior to stage 
activation and/or activate Stages I and II.
    d. Provide notice to the Administrator when USTRANSCOM plans to 
implement the Stage I and II contracts, either in total or as a partial 
activation, and when sealift resources are required for the activation 
of Stage III.
    e. Co-chair (with MARAD) the Joint Planning Advisory Group.
    f. Develop and execute prenegotiated contracts (including rates and 
rate methodology) with Participants for guaranteed access to time-
phased sealift capabilities in Stages I and II. During Stage III, 
implement contracts with Participants for capacity allocated by MARAD.
    2. MARAD shall:
    a. Approve the amount of sealift resources committed to Stages I 
and II and review the information provided by USTRANSCOM stating the 
amount of shipping capacity under contract to ensure there will be no 
adverse national, economic impact. Review, with USTRANSCOM, the Stage 
III requirements, as developed.
    b. Ensure that the necessary Defense Production Act procedures and 
authorities are in place for the carriers to implement any pooling 
arrangements they may have executed to immediately commit their 
predetermined level of assets to meet the Program's contract 
requirements.
    c. After request by USCINCTRANS and upon approval by SecTrans to 
activate Stage III, allocate sealift capacity and intermodal assets to 
Stage III based on USTRANSCOM requirements after having considered 
overall DOT/MARAD administrative and statutory responsibilities. DoD 
shall have priority consideration in any allocation situation.
    d. Co-chair (with USTRANSCOM) the Joint Planning Advisory Group.
C. Modification/Amendment of This Agreement
    The Attorney General may modify this Agreement, in writing, after 
consultation with the Chairman, the Administrator and USCINCTRANS. The 
Administrator, USCINCTRANS and Program Participants (as specified by 
the JPAG) may modify this Agreement at anytime by mutual agreement and 
with the approval of the Attorney General. Participants may propose 
amendments to this Agreement at any time.
D. Administrative Expenses
    Administrative and out-of-pocket expenses incurred by a Participant 
during the standby period shall be borne solely by the Participant. 
Such expenses may include, among other things, traveling to meetings, 
making reports of owned, chartered and leased intermodal ships, and 
equipment.
E. Record Keeping
    1. MARAD has primary responsibility for maintaining records in 
accordance with 44 CFR Part 332.
    2. MARAD shall be the official custodian of records related to the 
carrying out of this Agreement.
    3. USTRANSCOM or its designee shall be the official custodian of 
records related to the contracts to be used under this Agreement.
    4. In accordance with 44 CFR 332.3(d), a Participant shall maintain 
for five (5) years all minutes of meetings, transcripts, records, 
documents and other data, including any communications with other 
Participants or with any other member of the industry or their 
representatives, related to the administration, including planning and 
activation of this Agreement. Each Participant agrees to make records 
available to the Administrator, USCINCTRANS, the Attorney General, and 
the Chairman for inspection and copying at reasonable times and upon 
reasonable notice any time that the Participant is required hereby to 
maintain. Any record maintained by MARAD or USTRANSCOM as discussed in 
this subsection shall be available for public inspection and copying 
unless exempted on the grounds specified in 5 U.S.C 552(b)(1), (3) and 
(4) or identified as privileged and confidential information in 
accordance with Section 708(e).
F. MARAD
    Reporting Requirements--Report to the Director, as required, on the 
status and use of this Agreement.
G. Plan of Action
    1. The Administrator and USCINCTRANS, in coordination with the 
Participants, shall develop plans of action to implement this 
Agreement. The contracts used by USTRANSCOM for carrier commitment of 
intermodal shipping services/systems shall not be plans of action.
    2. If any necessary Plan of Action has not been adopted at the time 
of activation of this Agreement, the Joint Planning Advisory Group 
(JPAG) may be convened to assure completion of such Plan of Action in 
order to meet DoD requirements.
IV. Joint Planning Advisory Group
    A. The JPAG provides USTRANSCOM, MARAD and Program Participants the 
planning process to:
    1. Identify and discuss DoD detailed sealift service and resource 
requirements.
    2. Match peacetime requirements related to exercises and special 
movements with commercial capacity, as a method for testing wartime 
arrangements.
    3. Recommend concepts of operations to meet peacetime and wartime 
requirements for use by contracting officials in developing contracts.
    4. Provide carriers antitrust defense for pooling and teaming 
arrangements developed in support of DoD requirements.
    B. It will be co-chaired by MARAD and USTRANSCOM, and will convene 
quarterly in peacetime, and as necessary after activation of any stage 
of this Agreement as determined by the co-chairs.
    C. The JPAG will consist of a designated representative (plus one 
alternate) from MARAD, USTRANSCOM and each Program Participant 
(including a representative from maritime labor). These representatives 
will provide technical advice and support to ensure maximum 
coordination, efficiency and effectiveness in the use of Participants' 
resources.
    D. The JPAG will not be used for contract negotiations and/or 
discussions between carriers and the DoD; such negotiations and/or 
discussions will be in accordance with applicable DoD contracting 
policies and procedures. However, contracting officials will be guided 
by the recommendations and 

[[Page 54148]]
priorities established by the JPAG's concept of operations (CONOPS).
    E. The JPAG co-chairs shall:
    1. Notify the Attorney General, the Chairman, and all Participants 
of the time, place and nature of the JPAG meeting.
    2. Provide for publication in the Federal Register of a notice of 
the time, place and nature of the JPAG meeting. If the meeting is open, 
a Federal Register notice will be published reasonably in advance of 
the meeting. If a meeting is closed, a Federal Register notice will be 
published within ten (10) days after the meeting and will include the 
reasons for closing the meeting.
    3. Establish the agenda for each JPAG meeting and be responsible 
for adherence to the agenda.
    4. Provide for a full and complete transcript or other record of 
each meeting and provide one copy each of transcript or other record to 
the Attorney General, the Chairman, and all Participants.
    F. Security Measures--The co-chairs will develop and coordinate 
appropriate security measures so that contingency planning information 
can be shared with Participants to enable them to plan their 
commitment.

V. Activation of This Agreement

A. Determination of Necessity

    1. This Agreement shall be activated in up to three time-phased 
stages to satisfy DoD contingency sealift requirements in accordance 
and within the scope of the Agreement.
    2. The Administrator shall notify the Attorney General and the 
Chairman when it has been determined that activation of this Agreement 
is necessary.

B. Peacetime

    1. During peacetime, the Joint Planning Advisory Group (JPAG) will 
discuss requirements, capabilities, shortfalls and coordinate 
recommended courses of action.
    2. DoD peacetime sealift commercial requirements will be executed 
via contracts using Participants' ships, intermodal shipping services/
systems and sealift resources to the maximum extent feasible or other 
resources from non-Participants if Participants cannot meet the 
requirement. Commercial resources owned and operated by U.S. citizens 
will be given first consideration for peacetime cargo.
    3. USTRANSCOM will advise MARAD of agreements and assets under 
contract so that MARAD can monitor sealift asset status.
    4. MARAD will advise USTRANSCOM on industry issues and pre-approve 
the allocation of carrier commitments for Stages I and II of this 
Agreement.

C. Stage I

    1. Stage I may be activated partially, or in total, when DoD 
organic sealift capability, commercial sealift under peacetime 
contract, and voluntary commitments (as specified in Sections III.A.2 
and V.G) do not meet DoD sealift requirements.
    2. Stage I will be activated by USCINCTRANS. USCINCTRANS will 
notify the Administrator that it will implement the pre-approved 
contracts with Participants to meet contingency requirements. MARAD 
will ensure that the necessary Defense Production Act procedures and 
authorities are in place for the carriers to implement any pooling 
arrangements they may have executed to commit their level of assets to 
meet the Program's contract requirements.
    3. USTRANSCOM will implement the prenegotiated contracts with the 
Participants who have agreed, in accordance with Section VI of this 
Agreement, to provide assets to meet the approved Stage I requirements.
    4. Under Section VI of this Agreement, Participants will be allowed 
to substitute and pool/team ship capacity and intermodal shipping 
systems to fulfill their contractual commitments to meet Stage I 
requirements. Substitutions and pooling/team arrangement for capacity 
committed to DoD will be approved by USCINCTRANS or its designee.

D. Stage II

    1. Stage II will be activated, partially or in total, when the DoD 
requirement exceeds the capability of the Stage I resources.
    2. Activation of Stage II will follow the same procedures as Stage 
I.
    3. Paragraphs 3-4 of Stage I also apply to Stage II.
    4. Prior to requesting activation of Stage III, all efforts will be 
made to meet DoD requirements through commercial means outside this 
Agreement.

E. Stage III

    1. Stage III will be activated when the DoD requirements exceed the 
capability of the Stage I and II resources and shipping services are 
not available through established transportation procurement practices.
    2. It will be activated by SecTrans, upon request by USCINCTRANS 
(on approval by SecDef).
    3. All Participants' assets committed to this Agreement are subject 
to use during Stage III. MARAD will allocate sealift resources of 
Participants to meet the DoD requirements in Stage III.
    4. Upon allocation of sealift assets by MARAD, USTRANSCOM will 
implement contracts, using a pre-approved rate methodology established 
in the JPAG, to meet the Stage III requirements.

F. Termination of Charters, Leases and Other Contractual Arrangements

    1. USTRANSCOM will notify the Administrator as far in advance as 
possible of the prospective termination of charters, leases, management 
service contracts or other contractual arrangements under this 
Agreement.
    2. If this Agreement is superseded by the general requisitioning of 
ships, the Administrator, as a matter of discretion, may replace 
charters made under this Agreement with charters under requisitioning.

G. Voluntary Capacity

    1. Prior to the activation of Stage I of this Agreement, DoD will 
seek voluntary commitment of capacity or system to meet movement 
requirements.
    2. Requests for volunteer capacity will be extended simultaneously 
to both Program Participants and other carriers. However, first 
priority for award of this cargo will be to Program Participants, with 
compensation as outlined in the USTRANSCOM Implementation Instructions 
to this Agreement. Program Participants providing voluntary capacity 
may request the activation of prenegotiated contracts. Volunteered 
capacity will be credited against Participants' staged commitments, in 
the event such stages are subsequently activated.
    3. In the event USCINCTRANS determines Program Participants are 
unable, or do not desire, to voluntarily provide required capacity, DoD 
may attempt to contract with non-Program carriers prior to involuntary 
activation of Stage I contracts.
    4. Once Stage I of this Agreement is activated (unless such 
activation is at the request of the Participant) by USTRANSCOM, non-
Program volunteers will not be utilized until all applicable programmed 
capacity in Stages I and II, and any additional Participant voluntary 
capacity, is exhausted.
    5. Prior to requesting activation of Stage III of this Agreement, 
DoD will attempt to obtain capacity from all appropriate sources, to 
include non-Program Participants. 

[[Page 54149]]


VI. Terms and Conditions

A. Participation

    1. A liner or non-liner operator which is organized under the laws 
of a state of the United States, or the District of Columbia, may 
become a Participant by submitting an executed copy of the form 
referenced in VIII below and by entering into a contractual agreement 
with DoD or DOT which establishes a legal obligation to perform and 
which specifies payment or payment methodology for all services 
rendered.
    2. A company which owns, or has obtained through lease, intermodal 
equipment, and is not also a vessel operator under paragraph 1 above, 
may become a Participant by submitting an executed copy of the form 
referenced in VIII below and entering into a contractual agreement 
which establishes a legal obligation to perform and which specifies 
payment or payment methodology for all services rendered. Such a 
company must be organized under the laws of a State of the United 
States or the District of Columbia.
    3. The term ``Participant'' includes the entity signing this 
Agreement and all United States subsidiaries and affiliates of the 
entity which own, operate or charter ships, or own or lease intermodal 
equipment in the regular course of their business and in which the 
entity holds a controlling interest.
    4. The term ``Participant'' also includes specified controlled 
nondomestic subsidiaries and affiliates of the entity signing this 
Agreement; provided, that the Administrator, in coordination with 
USCINCTRANS, grants specific approval for their inclusion.
    5. An entity having an operating agreement (ODS or MSP) with the 
Secretary shall become a ``Participant'' and remain one at all times 
while receiving payment under such.
    6. An ocean carrier participating in the DOT Maritime Security 
Program will be enrolled in the Program for the duration of its 
participation.
    7. An ocean carrier eligible to participate in this Agreement, but 
which elects not to do so, is subject to enrollment in the DoD SRP if 
it: (1) Receives operating-differential subsidy or received 
construction differential subsidy, or (2) enters into contractual 
obligation to carry DoD cargo (e.g., World Wide Rate Agreement).
    8. A Participant in this Agreement will be subject only to the 
provisions of this Agreement and not to the provisions of the SRP.
    9. Periodically, a list of Participants will be published in the 
Federal Register.
    10. When a specific ship covered by this Agreement is removed from 
its regular commercial service to meet a DoD requirement, the 
Participant may replace the ship taken from regular service with a 
foreign flag ship upon notice to the Administrator, and such approval 
of the Administrator as required by law.
    11. The Administrator retains the right under law to requisition 
ships of Participants. A Participant's ships which are directly 
requisitioned by the United States or which are under other U.S. 
Government voluntary arrangements shall be credited against the 
Participant's contribution under this Agreement.

B. Agreement of Participant

    1. Each Participant agrees to provide commercial sealift and/or 
intermodal shipping services/systems in accordance with the 
prenegotiated contracts with USTRANSCOM.
    2. In general, the concept for allocation of a Participant's 
resources to the Agreement's stages is as follows:
    a. Stages I and II: As reflected in the USTRANSCOM Implementation 
Instructions, mobilization commitment is linked to the award of DoD 
peacetime business. Mobilization commitment will be a consideration in 
determining the level of contract award and long-term (i.e., one year 
or longer) contracts will include a requirement for a minimum 
commitment to Stages I and/or II. In addition, a Participating carrier 
may voluntarily offer additional capacity to these stages. Such 
additional commitment will be considered as a factor in determining 
contract award. The level of carrier commitment for each stage will be 
based on the DoD capacity requirement set for those stages. Given that 
Stages II and III requirements are cumulative of Stage I, a carrier's 
capacity committed to Stage I will also be considered contractually 
committed to meet Stage II and Stage III requirements. Capacity 
activated during Stages I and II will be paid at the Program's 
prenegotiated contract rate.
    b. Stage III: Carriers receiving DOT subsidies (and not in the SRP 
program) will have subsidy specified capacity enrolled in Stage III. 
Additional capacity will be as specified in DoD peacetime contracts and 
in the USTRANSCOM Implementation Instructions to this Agreement. 
Carriers utilized during Stage III will be paid based on a pre-approved 
rate methodology developed by MARAD and USTRANSCOM in the JPAG.
    3. Subject to the terms of USTRANSCOM contracts implementing this 
Agreement, the Participant which owns, operates, or controls a ship or 
ship capacity contributed will provide the intermodal equipment and 
management services needed to utilize the ship at Participant's normal 
efficiency.

C. Effective Date and Duration of Participation

    Participation in this Agreement is effective upon execution of the 
Program application form (Sec. VIII) by both the Participant and the 
Administrator, or their designees. Participation remains in effect 
until completion of the agreed upon obligation (Sec. VI.A.) to DoD or 
DOT or both. Termination will be by the Administrator (or USCINCTRANS, 
if appropriate), the Attorney General, the Chairman, or the Director on 
due notice by letter, telegram, publication in the Federal Register, or 
until the Participant withdraws.

D. Withdrawal From this Agreement

    A Participant may withdraw from this Agreement, subject to 
fulfillment of obligations incurred under this Agreement prior to the 
date such withdrawal becomes effective, by giving 30 days written 
notice, or as specified with the Administrator. However, a Participant 
having an MSP operating agreement with SecTrans shall not withdraw from 
this Agreement during the period the operating agreement is in effect. 
Withdrawal from this Agreement will not deprive a Participant of an 
antitrust defense otherwise available to it in accordance with DPA 
Section 708. A Participant otherwise subject to the DoD SRP that 
voluntarily withdraws from this Agreement will become subject again to 
the DoD SRP.

E. Standby Period

    The ``standby period'' is the interval between the effective date 
of a Participant's acceptance into the Agreement and the activation of 
any Stage.

F. Rules and Regulations

    A Participant acknowledges and agrees to abide by all provisions of 
DPA Section 708, and regulations related thereto which are promulgated 
by the Secretary, the Attorney General, and the Chairman. Standards and 
procedures pertaining to voluntary agreements have been promulgated in 
44 CFR Part 332. Note is taken that 46 CFR Part 340 establishes 
procedures for assigning the priority for use and the allocation of 
shipping services, containers and chassis. The JPAG will inform 
Participants of new and amended rules and regulations as they are 
issued. 

[[Page 54150]]


G. Pooling Resources

    When this agreement is activated, Participants may pool their 
assets to meet the needs of the Department of Defense and to minimize 
the assets withdrawn from the civil economy to meet those needs.

H. Enrollment of Ships and Equipment

    1. The Administrator will maintain a record of ships and intermodal 
equipment enrolled under this Agreement according to a Plan of Action. 
A schedule of Participants' ships and intermodal equipment will be 
enrolled on the date the carrier becomes a Participant. Participants 
will notify the Administrator of all changes, as required.
    2. The Administrator will make the enrollment data and all changes 
available to USTRANSCOM.
    3. Information which a Participant identifies as privileged or 
business confidential/proprietary data shall be withheld from public 
disclosure in accordance with Section 708(h)(3) and Section 705(e) of 
the Defense Production Act of 1950, as amended (50 U.S.C. App. 2155), 
and 44 CFR Part 332.
    4. Enrolled ships are required to comply with 46 CFR Part 307, 
Establishment of Mandatory Position Reporting System for Vessels.

I. War Risk Insurance

    1. SecDef will reimburse carriers for additional commercial war 
risk insurance. DOT will provide no-premium government war risk 
insurance, subject to the provisions of Section 1205 of the Merchant 
Marine Act, 1936, as amended [46 App. U.S.C. 1285(1)].
    2. Each ship enrolled under this Agreement shall be eligible for 
U.S. Government war risk insurance and for an interim insurance binder 
under the provisions of 46 CFR Part 308, notwithstanding restrictions 
on eligibility set out in subparts thereof.

J. Antitrust Defense

    1. Under the provisions of DPA Section 708, each Participant in 
this Agreement shall have available as a defense to any civil or 
criminal action brought under the antitrust laws (or any similar law of 
any State) with respect to any action taken to develop or carry out 
this Agreement or a Plan of Action, that such act was taken in the 
course of developing or carrying out this Agreement or a Plan of Action 
and that the Participant complied with the provisions of DPA Section 
708 and any regulation thereunder, and acted in accordance with the 
terms of this Agreement or a Plan of Action.
    2. This defense shall not be available to the Participant for any 
action occurring after termination of this Agreement. Nor shall it be 
available upon the modification of this Agreement with respect to any 
subsequent action that is beyond the scope of the modified text of this 
Agreement, except that no such modification shall be accomplished in a 
way that will deprive the Participant of antitrust defense for the 
fulfillment of obligations incurred.
    3. The defense shall be available only if and to the extent that 
person asserting it demonstrates that the action, which includes a 
discussion or agreement, was within the scope of this Agreement or a 
Plan of Action.
    4. The person asserting the defense bears the burden of proof.
    5. The defense shall not be available if the person against whom it 
is asserted shows that the action was taken for the purpose of 
violating the antitrust laws.
    6. As appropriate, the Administrator will support applications by 
Participants to the Federal Maritime Commission or the Interstate 
Commerce Commission to exempt this Agreement and any Plan of Action 
from the operation of statutes administered by either agency.

K. Breach of Contract Defense

    Under the provisions of DPA Section 708, in any action in any 
Federal or State court for breach of contract, there shall be available 
as defense that the alleged breach of contract was caused predominantly 
by action taken by a Participant during or in imminent anticipation of 
an emergency to carry out this Agreement or a Plan of Action. Such 
defense shall not release the party asserting it from any obligation 
under applicable law to mitigate damages to the greatest extent 
possible.

VII. Plan of Action: Development Meeting

    The Administrator, in coordination with USCINCTRANS shall convene 
the JPAG within 90 days of the effective date of the first 
Participant's application. The purpose shall be to develop Plans of 
Action to implement this Agreement.

VIII. Application and Agreement

    The Administrator, in coordination with USCINCTRANS has adopted a 
form on which intermodal ship operators and intermodal-equipment 
leasing companies may apply to become a Participant in this Agreement 
(``Application and Agreement to Participate in the Voluntary Intermodal 
Sealift Agreement''). The form incorporates, by reference, the terms of 
this Agreement.

United States of America

Department of Transportation

Maritime Administration

Application to Participate in the Voluntary Intermodal Sealift 
Agreement

    The applicant identified below hereby applies to participate in 
the Maritime Administration's agreement entitled ``Voluntary 
Intermodal Sealift Agreement.'' The text of said Agreement is 
published in Federal Register ________, ________, 19____. This 
Agreement is authorized under Section 708 of the Defense Production 
Act of 1950, as amended (50 U.S.C. App. 2158). Regulations governing 
this Agreement appear at 44 CFR Part 332 and are reflected at 49 CFR 
Subtitle A.
    The applicant, if selected, hereby acknowledges and agrees to 
the incorporation by reference into this Application and Agreement 
of the entire text of the Voluntary Intermodal Sealift Agreement 
published in Federal Register ________, ________, 19____, as though 
said text were physically recited herein.
    The Applicant, as a Participant, agrees to comply with the 
provisions of Section 708 of the Defense Production Act of 1950, as 
amended, the regulations of 44 CFR Part 332 and as reflected at 49 
CFR Subtitle A, and the terms of the Voluntary Intermodal Sealift 
Agreement. Further, the applicant, if selected as a Participant, 
hereby agrees to contractually commit to make specifically enrolled 
vessels, intermodal equipment and management of intermodal 
transportation systems available for use by the Department of 
Defense and to other Participants as discussed in this Agreement and 
the subsequent contract for the purpose of meeting national defense 
requirement.
    Attest:

----------------------------------------------------------------------
(Corporate Secretary)

(CORPORATE SEAL)

----------------------------------------------------------------------
(Applicant-Corporate Name)

By:--------------------------------------------------------------------
(Signature)

----------------------------------------------------------------------
(Position Title)
Effective Date:--------------------------------------------------------

----------------------------------------------------------------------
(Secretary)

(SEAL)
UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION MARITIME 
ADMINISTRATION

By:--------------------------------------------------------------------
Maritime Administrator

By Order of the Maritime Administrator:

    Dated: October 13, 1995.
Joel C. Richard,
Secretary.
[FR Doc. 95-25896 Filed 10-18-95; 8:45 am]
BILLING CODE 4910-81-P