[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]
[[Page 54143]]
_______________________________________________________________________
Part VI
Department of Transportation
_______________________________________________________________________
Maritime Administration
_______________________________________________________________________
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).
-----------------------------------------------------------------------
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.
[[Page 54146]]
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
[[Page 54147]]
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