[Federal Register Volume 62, Number 30 (Thursday, February 13, 1997)]
[Notices]
[Pages 6838-6846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3666]
[[Page 6837]]
_______________________________________________________________________
Part II
Department of Transportation
_______________________________________________________________________
Maritime Administration
_______________________________________________________________________
Voluntary Intermodal Sealift Agreement; Notice
Federal Register / Vol. 62, No. 30 / Thursday, February 13, 1997 /
Notices
[[Page 6838]]
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 SW., 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 participants in
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) and a modified text of VISA
was published in the Federal Register on October 19, 1995 (60 FR
54144). The text published herein will now be implemented.
Copies will be made available to the public upon request.
Text of the Voluntary Intermodal Sealift Agreement:
Voluntary Intermodal Sealift Agreement (VISA)
9 December 1996
Table of Contents
Abbreviations
Definitions
Preface
I. Purpose
II. Authorities
A. MARAD
B. USTRANSCOM
III. General
A. Concept
B. Responsibilities
C. Termination of Charter, Leases and Other Contractual
Arrangements
D. Modification/Amendment of This Agreement
E. Administrative Expenses
F. Record Keeping
G. MARAD Reporting Requirements
IV. Joint Planning Advisory Group
V. Activation of VISA Contingency Provisions
A. General
B. Notification of Activation
C. Voluntary Capacity
D. Stage I
E. Stage II
F. Stage III
G. Partial Activation
VI. Terms and Conditions
A. Participation
B. Agreement of Participant
C. Effective Date and Duration of Participation
D. Participant Termination of VISA
E. Rules and Regulations
F. Carrier Coordination Agreements
G. Enrollment of Capacity (Ships and Equipment)
H. War Risk Insurance
I. Antitrust Defense
J. Breach of Contract Defense
K. Vessel Sharing Agreements
VII. Application and Agreement
Figure 1--VISA Activation Process Diagram
Abbreviations
``AMC''--Air Mobility Command
``CCA''--Carrier Coordination Agreements
``CDS''--Construction Differential Subsidy
``CFR''--Code of Federal Regulations
``CONOPS''--Concept of Operations
``DoD''--Department of Defense
``DOJ''--Department of Justice
``DOT''--Department of Transportation
``DPA''--Defense Production Act
``EUSC''--Effective United States Control
``FAR''--Federal Acquisition Regulations
``FEMA''--Federal Emergency Management Agency
``FTC''--Federal Trade Commission
``JCS''--Joint Chiefs of Staff
``JPAG''--Joint Planning Advisory Group
``MARAD''--Maritime Administration, DOT
``MSP''--Maritime Security Program
``MSC''--Military Sealift Command
``MTMC''--Military Transportation Management Command
``NCA''--National Command Authorities
``NDRF''--National Defense Reserve Fleet maintained by MARAD
``ODS''--Operating Differential Subsidy
``RRF''--Ready Reserve Force component of the NDRF
``SecDef''--Secretary of Defense
``SecTrans''--Secretary of Transportation
``USCINCTRANS''--Commander in Chief, United States Transportation
Command
``USTRANSCOM''--United States Transportation Command (including its
sealift transportation component, Military Sealift Command)
``VISA''--Voluntary Intermodal Sealift Agreement
``VSA''--Vessel Sharing Agreement
Definitions--For purposes of this agreement, the following
definitions apply:
Administrator--Maritime Administrator.
Agreement--Agreement (proper noun) refers to the Voluntary
Intermodal Sealift Agreement (VISA).
Attorney General--Attorney General of the United States.
Broker--A person who arranges for transportation of cargo for a
fee.
Carrier Coordination Agreement (CCA)--An agreement between two
or more Participants or between Participant and non-Participant
carriers to coordinate their services in a Contingency, including
agreements to: (i) charter vessels or portions of the cargo-carrying
capacity of vessels; (ii) share cargo handling equipment, chassis,
containers and ancillary transportation equipment; (iii) share
wharves, warehouse, marshaling yards and other marine terminal
facilities; and (iv) coordinate the movement of vessels.
Chairman--FTC--Chairman of the Federal Trade Commission (FTC).
Charter--Any agreement or commitment by which the possession or
services of a vessel are secured for a period of time, or for one or
more voyages, whether or not a demise of the vessel.
Commercial--Transportation service provided for profit by
privately owned (not government owned) vessels to a private or
government shipper. The type of service may be either common carrier
or contract carriage.
Contingency--Includes, but is not limited to a ``contingency
operation'' as defined at 10 App. U.S.C. 101(a)(13), and a JCS-
directed, NCA-approved action undertaken with military forces in
response to: (i) natural disasters; (ii) terrorists or subversive
activities; or (iii) required military operations, whether or not
there is a declaration of war or national emergency.
[[Page 6839]]
Contingency contracts--DoD contracts in which Participants
implement advance commitments of capacity and services to be
provided in the event of a Contingency.
Contract carrier--A for-hire carrier who does not hold out
regular service to the general public, but instead contracts, for
agreed compensation, with a particular shipper for the carriage of
cargo in all or a particular part of a ship for a specified period
of time or on a specified voyage or voyages.
Controlling interest--More than a 50-percent interest by stock
ownership.
Director--FEMA--Director of Federal Emergency Management Agency
(FEMA).
Effective U.S. Control (EUSC)--U.S. citizen-owned ships which
are registered in certain open registry countries and which the
United States can rely upon for defense in national security
emergencies. The term has no legal or other formal significance.
U.S. citizen-owned ships registered in Liberia, Panama, Honduras,
the Bahamas and the Republic of the Marshall Islands are considered
under effective U.S. control. EUSC registries are recognized by the
Maritime Administration after consultation with the Department of
Defense. (MARAD OPLAN 001A, 17 July 1990)
Enrollment Contract--The document, executed and signed by MSC,
and the individual carrier enrolling that carrier into VISA Stage
III.
Foreign flag vessel--A vessel registered or 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 materiel
handling equipment, as well as other ancillary items.
Liner--Type of service offered on a definite, advertised
schedule and giving relatively frequent sailings at regular
intervals between specific ports or ranges.
Liner throughput capacity--The system/intermodal capacity
available and committed, used or unused, depending on the system
cycle time necessary to move the designated capacity through to
destination. Liner throughput capacity shall be calculated as:
static capacity (outbound from CONUS) X voyage frequency X.5.
Management services--Management expertise and experience,
intermodal terminal management, information resources, and control
and tracking systems.
Ocean Common carrier--An entity 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; and which operates and utilizes a vessel operating on
the high seas for all or part of that transportation. (As defined in
46 App. U.S.C. 1702, 801, and 842 regarding international,
interstate, and intercoastal commerce respectively.)
Operator--An ocean common carrier or contract carrier that owns
or controls or manages vessels by which ocean transportation is
provided.
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 VISA, and otherwise as defined
within Section VI of this document.
Person--Includes individuals and corporations, partnerships, and
associations existing under or authorized by the laws of the United
States or any state, territory, district, or possession thereof, or
of a foreign country.
SecTrans--Secretary of Transportation.
Service contract--A contract between a shipper (or a shipper's
association) and an ocean common carrier (or conference) in which
the shipper makes a commitment to provide a certain minimum quantity
of cargo or freight revenue over a fixed time period, and the ocean
common carrier or conference commits to a certain rate or rate
schedule, as well as a defined service level (such as assured space,
transit time, port rotation, or similar service features), as
defined in the Shipping Act of 1984. The contract may also specify
provisions in the event of nonperformance on the part of either
party.
Standby period--The interval between the effective date of a
Participant's acceptance into the Agreement and the activation of
any stage, and the periods between deactivation of all stages and
any later activation of any stage.
U.S. Flag Vessel--A vessel registered or documented under the
laws of the United States of America.
USTRANSCOM--The United States Transportation Command and its
component commands (AMC, MSC and MTMC).
Vessel Sharing Agreement (VSA) Capacity--Space chartered to a
Participant for carriage of cargo, under its commercial contracts,
service contracts or in common carriage, aboard vessels shared with
another carrier or carriers pursuant to a commercial vessel sharing
agreement under which the carriers may compete with each other for
the carriage of cargo. In U.S. foreign trades the agreement is filed
with the Federal Maritime Commission (FMC) in conformity with the
Shipping Act of 1984 and implementing regulations.
Volunteers--Any vessel owner/operator who is an ocean carrier
and who offers to make capacity, resources or systems available to
support contingency requirements.
Preface
The Administrator, pursuant to the authority contained in Section
708 of the Defense Production Act of 1950, as amended (50 App. U.S.C.
2158)(Section 708)(DPA), in cooperation with the Department of Defense
(DoD), has developed this Agreement [hereafter called the Voluntary
Intermodal Sealift Agreement (VISA)] to provide DoD the commercial
sealift and intermodal shipping services/systems necessary to meet
national defense Contingency requirements.
USTRANSCOM procures commercial shipping capacity to meet
requirements for ships and intermodal shipping services/systems through
arrangements with common carriers, with contract carriers and by
charter. DoD (through USTRANSCOM) and Department of Transportation
(DOT) (through 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 existing commercial
service. Ships of the Ready Reserve Force (RRF) are 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 in accordance with applicable laws,
regulations and policies.
The objective of VISA is to provide DoD a coordinated, seamless
transition from peacetime to wartime for the acquisition of commercial
sealift and intermodal capability to augment DoD's organic sealift
capabilities. This Agreement establishes the terms, conditions and
general procedures by which persons or parties may become VISA
Participants. Through advance joint planning among USTRANSCOM, MARAD
and the Participants, Participants may provide predetermined capacity
in designated stages to support DoD Contingency requirements.
VISA is designed to create close working relationships among MARAD,
USTRANSCOM and Participants through which Contingency needs and the
needs of the civil economy can be met by cooperative action. During
Contingencies, Participants are afforded maximum flexibility to adjust
commercial operations by Carrier Coordination Agreements (CCA), in
accordance with applicable law.
Participants will be afforded the first opportunity to meet DoD
peacetime and Contingency sealift requirements within applicable law
and regulations, to the extent that operational requirements are met.
In the event VISA Participants are unable to fully meet Contingency
requirements, the shipping capacity made available under VISA may be
supplemented by ships/capacity from non-Participants in accordance with
applicable law and by ships requisitioned under Section 902 of the
Merchant Marine Act, 1936 (as amended) (46 App. U.S.C. 1242). In
addition, containers and chassis made available under VISA may be
supplemented by services and equipment acquired by USTRANSCOM or
accessed by the Administrator through the provisions of 46 CFR Part
340.
The Secretary of Defense (SecDef) has approved VISA as a sealift
readiness
[[Page 6840]]
program for the purpose of Section 909 of the Merchant Marine Act,
1936, as amended (46 App. U.S.C. 1248).
Voluntary Intermodal Sealift Agreement
I. Purpose
A. The Administrator has made a determination, in accordance with
Section 708(c)(1) of the Defense Production Act (DPA) 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 for utilization of intermodal shipping services/
systems is necessary for the national defense. The Attorney General, in
consultation with the Chairman of the Federal Trade Commission, has
issued a finding that dry cargo shipping 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 VISA is to provide a responsive transition from
peace to Contingency operations through pre-coordinated agreements for
sealift capacity to support DoD Contingency requirements. VISA
establishes procedures for the commitment of intermodal shipping
services/systems to satisfy such requirements. VISA will change from
standby to active status upon activation by appropriate authority of
any of the Stages, as described in Section V.
C. It is intended that VISA promote and facilitate DoD's use of
existing commercial transportation resources and integrated intermodal
transportation systems, in a manner which minimizes disruption to
commercial operations, whenever possible.
D. Participants' capacity which may be committed pursuant to 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, tug and barge combinations, and barge carrier (LASH,
SeaBee).
II. Authorities
A. MARAD
1. Sections 101 and 708 of the DPA, as amended (50 App. U.S.C.
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 SecTrans, among others.
By DOT Order 1900.8, SecTrans delegated to the Administrator the
authority under which VISA 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. VISA provides for the staged, time-phased availability of
Participants' shipping services/systems to meet NCA-directed DoD
Contingency requirements in the most demanding defense oriented sealift
emergencies and for less demanding defense oriented situations through
prenegotiated Contingency contracts between the government and
Participants (see Figure 1). Such arrangements will be jointly planned
with MARAD, USTRANSCOM, and Participants in peacetime to allow
effective, and efficient and best valued use of commercial sealift
capacity, provide DoD assured Contingency access, and minimize
commercial disruption, whenever possible.
a. Stages I and II provide for prenegotiated contracts between the
DoD and Participants to provide sealift capacity against all projected
DoD Contingency requirements. These agreements will be executed in
accordance with approved DoD contracting methodologies.
b. Stage III will provide for additional capacity to the DoD when
Stages I and II commitments or volunteered capacity are insufficient to
meet Contingency requirements, and adequate shipping services from non-
Participants are not available through established DoD contracting
practices or U.S. Government treaty agreements.
2. Activation will be in accordance with procedures outlined in
Section V of this Agreement.
3. Following is the prioritized order for utilization of commercial
sealift capacity to meet DoD peacetime and Contingency requirements:
a. U.S. Flag vessel capacity operated by a Participant and U.S.
Flag Vessel Sharing Agreement (VSA) capacity of a Participant.
b. U.S. Flag vessel capacity operated by a non-Participant.
c. Combination U.S./foreign flag vessel capacity operated by a
Participant and combination U.S./foreign flag VSA capacity of a
Participant.
d. Combination U.S./foreign flag vessel capacity operated by a non-
Participant.
e. U.S. owned or operated foreign flag vessel capacity and VSA
capacity of a Participant.
f. U.S. owned or operated foreign flag vessel capacity and VSA
capacity of a non-Participant.
g. Foreign-owned or operated foreign flag vessel capacity of a non-
Participant.
4. Under Section VI.F. of this Agreement, Participants may
implement CCAs to fulfill their contractual commitments to meet VISA
requirements.
B. Responsibilities
1. The SecDef, through USTRANSCOM, shall:
a. Define time-phased requirements for Contingency sealift capacity
and resources required in Stages I, II and III to augment DoD sealift
resources.
b. Keep MARAD and Participants apprised of Contingency sealift
capacity required and resources committed to Stages I and II.
c. Obtain Contingency sealift capacity through the implementation
of specific prenegotiated DoD Contingency contracts with Participants.
d. Notify the Administrator upon activation of any stage of VISA.
e. Co-chair (with MARAD) the Joint Planning Advisory Group (JPAG).
f. Establish procedures, in accordance with applicable law and
regulation, providing Participants with necessary determinations for
use of foreign flag vessels to replace an equivalent U.S. Flag capacity
to transport a Participant's normal peacetime DoD cargo, when
Participant's U.S. Flag assets are removed from regular service to meet
VISA Contingency requirements.
g. Provide a reasonable time to permit an orderly return of a
Participant's vessel(s) to its regular schedule and termination of its
foreign flag capacity arrangements as determined through coordination
between DoD and the Participants.
h. Review and endorse Participants' requests to MARAD for use of
foreign flag replacement capacity for non-DoD government cargo, when
U.S. Flag capacity is required to meet Contingency requirements.
2. The SecTrans, through MARAD, shall:
a. Review the amount of sealift resources committed in DoD
contracts to Stages I and II and notify USTRANSCOM if a particular
level of VISA commitment will have serious adverse impact on the
commercial
[[Page 6841]]
sealift industry's ability to provide essential services. MARAD's
analysis shall be based on the consideration that all VISA Stage I and
II capacity committed will be activated. This notification will occur
on an annual basis upon USCINCTRANS' acceptance of VISA commitments
from the Participants. If so advised by MARAD, USTRANSCOM will adjust
the size of the stages or provide MARAD with justification for
maintaining the size of those stages. USTRANSCOM and MARAD will
coordinate to ensure that the amount of sealift assets committed to
Stages I and II will not have an adverse, national economic impact.
b. Coordinate with DOJ for the expedited approval of CCAs.
c. Upon request by USCINCTRANS and approval by SecDef to activate
Stage III, allocate sealift capacity and intermodal assets to meet DoD
Contingency requirements. DoD shall have priority consideration in any
allocation situation.
d. Establish procedures, pursuant to Section 653(d) of the Maritime
Security Act (MSA), for determinations regarding the equivalency and
duration of the use of foreign flag vessels to replace U.S. Flag vessel
capacity to transport the cargo of a Participant which has entered into
an operating agreement under Section 652 of the MSA and whose U.S. Flag
vessel capacity has been removed from regular service to meet VISA
contingency requirements. Such foreign flag vessels shall be eligible
to transport cargo subject to the Cargo Preference Act of 1904 (10
U.S.C. 2631), P.R. 17 (46 App. U.S.C. 1241-1), and P.L. 664 (46 App.
U.S.C. 1241(b)). However, any procedures regarding the use of such
foreign flag vessels to transport cargo subject to the Cargo Preference
Act of 1904 must have the concurrence of USTRANSCOM before it becomes
effective.
e. Co-chair (with USTRANSCOM) the JPAG.
f. Seek necessary Jones Act waivers as required. To the extent
feasible, participants with Jones Act vessels or vessel capacity will
use CCAs or other arrangements to protect their ability to maintain
services for their commercial customers and to fulfill their commercial
peacetime commitments with U.S. Flag vessels. In situations where the
activation of this Agreement deprives a Participant of all or a portion
of its Jones Act vessels or vessel capacity and, at the same time,
creates a general shortage of Jones Act vessel(s) or vessel capacity on
the market, the Administrator may request that the Secretary of the
Treasury grant a temporary waiver of the provisions of the Jones Act to
permit a Participant to charter or otherwise utilize non-Jones Act
vessel(s) or vessel capacity, with priority consideration recommended
for U.S. crewed vessel(s) or vessel capacity. The vessel(s) or vessel
capacity for which such waivers are requested will be approximately
equal to the Jones Act vessel(s) or vessel capacity chartered or under
contract to the DoD, and any waiver that may be granted will be
effective for the period that the Jones Act vessel(s) or vessel
capacity is on charter or under contract to the DoD plus a reasonable
time for termination of the replacement charters as determined by the
Administrator.
C. Termination of Charters, Leases and Other Contractual Arrangements
1. USTRANSCOM will notify the Administrator as soon as possible of
the prospective termination of charters, leases, management service
contracts or other contractual arrangements made by the DoD under this
Agreement.
2. In the event of general requisitioning of ships under 46 App.
U.S.C. 1242, the Administrator shall consider commitments made with the
DoD under this Agreement.
D. Modification/Amendment of This Agreement
1. The Attorney General may modify this Agreement, in writing,
after consultation with the Chairman-FTC, SecTrans, through his
representative MARAD, and SecDef, through his representative
USCINCTRANS. Although Participants may withdraw from this Agreement
pursuant to Section VI.D, they remain subject to VISA as amended or
modified until such withdrawal.
2. The Administrator, USCINCTRANS and Participants may modify this
Agreement at any time by mutual agreement, but only in writing with the
approval of the Attorney General and the Chairman-FTC.
3. Participants may propose amendments to this Agreement at any
time.
E. Administrative Expenses--Administrative and Out-of-pocket Expenses
Incurred by a Participant Shall Be Borne Solely by the Participant
F. Record Keeping
1. MARAD has primary responsibility for maintaining carrier VISA
application records in connection with this Agreement. Records will be
maintained in accordance with MARAD Regulations. Once a carrier is
selected as a VISA Participant, a copy of the VISA application form
will be forwarded to USTRANSCOM.
2. In accordance with 44 CFR 332.2(c), MARAD is responsible for the
making and record maintenance of a full and verbatim transcript of each
JPAG meeting. MARAD shall send this transcript, and any voluntary
agreement resulting from the meeting, to the Attorney General, the
Chairman-FTC, the Director-FEMA, any other party or repository required
by law and to Participants upon their request.
3. USTRANSCOM shall be the official custodian of records related to
the contracts to be used under this Agreement, to include specific
information on enrollment of a Participant's capacity in VISA.
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
related to and implementation of Stage activations of this Agreement.
Each Participant agrees to make such records available to the
Administrator, USCINCTRANS, the Attorney General, and the Chairman-FTC
for inspection and copying at reasonable times and upon reasonable
notice. Any record maintained by MARAD or USTRANSCOM pursuant to
paragraphs 1, 2, or 3 of this subsection shall be available for public
inspection and copying unless exempted on the grounds specified in 5
U.S.C 552(b) or identified as privileged and confidential information
in accordance with Section 708(e).
G. MARAD Reporting Requirements--MARAD Shall Report to the Director-
FEMA, as Required, on the Status and Use of This Agreement
IV. Joint Planning Advisory Group
A. The JPAG provides USTRANSCOM, MARAD and VISA Participants a
planning forum to:
1. Analyze DoD Contingency sealift/intermodal service and resource
requirements.
2. Identify commercial sealift capacity that may be used to meet
DoD requirements, related to Contingencies and, as requested by
USTRANSCOM, exercises and special movements.
3. Develop and recommend Concepts of Operations (CONOPS) to meet
DoD-approved Contingency requirements and, as requested by USTRANSCOM,
exercises and special movements.
B. The JPAG will be co-chaired by MARAD and USTRANSCOM, and will
[[Page 6842]]
convene as jointly determined by the co-chairs.
C. The JPAG will consist of designated representatives from MARAD,
USTRANSCOM, each Participant, and maritime labor. Other attendees may
be invited at the discretion of the co-chairs as necessary to meet JPAG
requirements. Representatives will provide technical advice and support
to ensure maximum coordination, efficiency and effectiveness in the use
of Participants' resources. All Participants will be invited to all
open JPAG meetings. For selected JPAG meetings, attendance may be
limited to designated Participants to meet specific operational
requirements.
1. The co-chairs may establish working groups within JPAG.
Participants may be assigned to working groups as necessary to develop
specific CONOPS.
2. Each working group will be co-chaired by representatives
designated by MARAD and USTRANSCOM.
D. The JPAG will not be used for contract negotiations and/or
contract discussions between carriers and the DoD; such negotiations
and/or discussions will be in accordance with applicable DoD
contracting policies and procedures.
E. The JPAG co-chairs shall:
1. Notify the Attorney General, the Chairman-FTC, Participants and
the maritime labor representative of the time, place and nature of each
JPAG meeting.
2. Provide for publication in the Federal Register of a notice of
the time, place and nature of each 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-FTC, and to Participants, upon
request.
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
commitments
V. Activation of VISA Contingency Provisions
A. General
VISA may be activated at the request of USCINCTRANS, with approval
of SecDef, as needed to support Contingency operations. Activating
voluntary commitments of capacity to support such operations will be in
accordance with prenegotiated Contingency contracts between DoD and
Participants.
B. Notification of Activation
1. USCINCTRANS will notify the Administrator of the activation of
Stages I, II, and III.
2. The Administrator shall notify the Attorney General and the
Chairman-FTC when it has been determined by DoD that activation of any
Stage of VISA is necessary to meet DoD Contingency requirements.
C. Voluntary Capacity
1. Throughout the activation of any Stages of this Agreement, DoD
may utilize voluntary commitment of sealift capacity or systems.
2. Requests for volunteer capacity will be extended simultaneously
to both Participants and other carriers. First priority for utilization
will be given to Participants who have signed Stage I and/or II
contracts and are capable of meeting the operational requirements.
Participants providing voluntary capacity may request USTRANSCOM to
activate their prenegotiated Contingency contracts; to the maximum
extent possible, USTRANSCOM, where appropriate, shall support such
requests. Volunteered capacity will be credited against Participants'
staged commitments, in the event such stages are subsequently
activated.
3. In the event Participants are unable to fully meet Contingency
requirements, or do not voluntarily offer to provide the required
capacity, the shipping capacity made available under VISA may be
supplemented by ships/capacity from non-Participants.
4. When voluntary capacity does not meet DoD Contingency
requirements, DoD will activate the VISA stages as necessary.
D. Stage I
1. Stage I will be activated in whole or in part by USCINCTRANS,
with approval of SecDef, when voluntary capacity commitments are
insufficient to meet DoD Contingency requirements. USCINCTRANS will
notify the Administrator upon activation.
2. USTRANSCOM will implement Stage I Contingency contracts as
needed to meet operational requirements.
E. Stage II
1. Stage II will be activated, in whole or in part, when
Contingency requirements exceed the capability of Stage I and/or
voluntarily committed resources.
2. Stage II will be activated by USCINCTRANS, with approval of
SecDef, following the same procedures discussed in paragraph D above.
F. Stage III
1. Stage III will be activated, in whole or in part, when
Contingency requirements exceed the capability of Stages I and II, and
other shipping services are not available. This stage involves DoD use
of capacity and vessels operated by Participants which will be
furnished to DoD when required in accordance with this Agreement. The
capacity and vessels are allocated by MARAD on behalf of SecTrans to
USCINCTRANS.
2. Stage III will be activated by USCINCTRANS upon approval by
SecDef. Upon activation, DoD SecDef will request SecTrans to allocate
sealift capacity based on DoD requirements, in accordance with Title 1
of DPA, to meet the Contingency requirement. All Participants' capacity
committed to VISA is subject to use during Stage III.
3. Upon allocation of sealift assets by SecTrans, through its
designated representative MARAD, USTRANSCOM will negotiate and execute
Contingency contracts with Participants, using pre-approved rate
methodologies as established jointly by SecTrans and SecDef in
fulfillment of Section 653 of the Maritime Security Act of 1996. Until
execution of such contract, the Participant agrees that the assets
remain subject to the provisions of Section 902 of the Merchant Marine
Act of 1936, Title 46 App. U.S.C. 1242.
4. Simultaneously with activation of Stage III, the DoD Sealift
Readiness Program (SRP) will be activated for those carriers still
under obligation to that program.
G. Partial Activation
As used in this Section V, activation ``in part'' of any Stage
under this Agreement shall mean one of the following:
1. Activation of only a portion of the committed capacity of some,
but not all, of the Participants in any Stage that is activated; or
2. Activation of the entire committed capacity of some, but not
all, of the
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Participants in any Stage that is activated; or
3. Activation of only a portion of the entire committed capacity of
all of the Participants in any Stage that is activated.
VI. Terms and Conditions
A. Participation
1. Any U.S. Flag vessel operator organized under the laws of a
State of the United States, or the District of Columbia, may become a
``Participant'' in this Agreement by submitting an executed copy of the
form referenced in Section VII, and by entering into a VISA Enrollment
Contract with DoD which establishes a legal obligation to perform and
which specifies payment or payment methodology for all services
rendered.
2. The term ``Participant'' includes the entity described in VI.A.1
above, and all United States subsidiaries and affiliates of the entity
which own, operate, charter or lease ships and intermodal equipment in
the regular course of their business and in which the entity holds a
controlling interest.
3. Upon request of the entity executing the form referenced in
Section VII, the term ``Participant'' may include the controlled non-
domestic subsidiaries and affiliates of such entity signing this
Agreement, provided that the Administrator, in coordination with
USCINCTRANS, grants specific approval for their inclusion.
4. Any entity receiving payments under the Maritime Security
Program (MSP), pursuant to the Maritime Security Act of 1996 (MSA)
(P.L. 104-239), shall become a ``Participant'' with respect to all
vessels enrolled in MSP at all times until the date the MSP operating
agreement would have terminated according to its original terms. The
MSP operator shall be enrolled in VISA as a Stage III Participant, at a
minimum. Such participation will satisfy the requirement for an MSP
participant to be enrolled in an emergency preparedness program
approved by SecDef as provided in Section 653 of the MSA.
5. A Participant shall be subject only to the provisions of this
Agreement and not to the provisions of the SRP.
6. MARAD shall publish periodically in the FEDERAL REGISTER a list
of Participants.
B. Agreement of Participant
1. Each Participant agrees to provide commercial sealift and/or
intermodal shipping services/systems in accordance with DoD Contingency
contracts. USTRANSCOM will review and approve each Participant's
commitment to ensure it meets DoD Contingency requirements. A
Participant's capacity commitment to Stages I and II will be one of the
considerations in determining the level of DoD peacetime contracts
awarded with the exception of Jones Act capacity (as discussed in
paragraph 4 below).
2. DoD may also enter into Contingency contracts, not linked to
peacetime contract commitments, with Participants, as required to meet
Stage I and II requirements.
3. Commitment of Participants' resources to VISA is as follows:
a. Stage III: A carrier desiring to participate in DoD peacetime
contracts/traffic must commit no less than 50% of its total U.S. Flag
capacity into Stage III. Carriers receiving DOT payments under the MSP,
or carriers subject to Section 909 of Merchant Marine Act of 1936, as
amended, that are not enrolled in the SRP will have vessels receiving
such assistance enrolled in Stage III. Participants' capacity under
charter to DoD will be considered ``organic'' to DoD, and does not
count towards the Participant's Contingency commitment during the
period of the charter. Participants utilized under Stage III activation
will be compensated based upon a DoD pre-approved rate methodology.
b. Stages I and II: DoD will annually develop and publish minimum
commitment requirements for Stages I and II. Normally, the awarding of
a long-term (i.e., one year or longer) DoD contract, exclusive of
charters, will include the annual predesignated minimum commitment to
Stages I and/or II. Participants desiring to bid on DoD peacetime
contracts will be required to provide commitment levels to meet DoD-
established Stage I and/or II minimums on an annual basis. Participants
may gain additional consideration for peacetime contract cargo
allocation awards by committing capacity to Stages I and II beyond the
specified minimums. If the Participant is awarded a contract reflecting
such a commitment, that commitment shall become the actual amount of a
Participant's U.S. Flag capacity commitment to Stages I and II. A
Participant's Stage III U.S. Flag capacity commitment shall represent
its total minimum VISA commitment. That Participant's Stage I and II
capacity commitments as well as any volunteer capacity contribution by
Participant are portions of Participant's total VISA commitment.
Participants activated during Stages I and II will be compensated in
accordance with prenegotiated Contingency contracts.
4. Participants exclusively operating vessels engaged in domestic
trades will be required to commit 50% of that capacity to Stage III.
Such Participants will not be required to commit capacity to Stages I
and II as a consideration of domestic peacetime traffic and/or contract
award. However, such Participants may voluntarily agree to commit
capacity to Stages I and/or II.
5. The Participant owning, operating, or controlling an activated
ship or ship capacity will provide intermodal equipment and management
services needed to utilize the ship and equipment at not less than the
Participant's normal efficiency, in accordance with the prenegotiated
Contingency contracts implementing this Agreement.
C. Effective Date and Duration of Participation
1. Participation in this Agreement is effective upon execution by
MARAD of the submitted form referenced in Section VII, and approval by
USTRANSCOM by execution of an Enrollment Contract, for Stage III, at a
minimum.
2. VISA participation remains in effect until the Participant
terminates the Agreement in accordance with paragraph D below, or
termination of the Agreement in accordance with 44 CFR Sec. 332.4.
Notwithstanding termination of VISA or participation in VISA,
obligations pursuant to executed DoD peacetime contracts shall remain
in effect for the term of such contracts and are subject to all terms
and conditions thereof.
D. Participant Termination of VISA
1. Except as provided in paragraph 2 below, a Participant may
terminate its participation in VISA upon written notice to the
Administrator. Such termination shall become effective 30 days after
written notice is received, unless obligations incurred under VISA by
virtue of activation of any Contingency contract cannot be fulfilled
prior to the termination date, in which case the Participant shall be
required to complete the performance of such obligations. Voluntary
termination by a carrier of its VISA participation shall not act to
terminate or otherwise mitigate any separate contractual commitment
entered into with DoD.
2. A Participant having an MSP operating agreement with SecTrans
shall not withdraw from this Agreement at any time during the original
term of the MSP operating agreement.
[[Page 6844]]
3. A Participant's withdrawal, or termination of this Agreement,
will not deprive a Participant of an antitrust defense otherwise
available to it in accordance with DPA Section 708 for the fulfillment
of obligations incurred prior to withdrawal or termination.
4. A Participant otherwise subject to the DoD SRP that voluntarily
withdraws from this Agreement will become subject again to the DoD SRP.
E. Rules and Regulations
Each 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-
FTC. Standards and procedures pertaining to voluntary agreements have
been promulgated in 44 CFR Part 332. 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 in accordance with law and administrative due process. Although
Participants may withdraw from VISA, they remain subject to all
authorized rules and regulations while in Participant status.
F. Carrier Coordination Agreements (CCA)
1. When any Stage of VISA is activated or when DoD has requested
volunteer capacity pursuant to Section V.B. of VISA, Participants may
implement approved CCAs to meet the needs of the DoD and to minimize
the disruption of their services to the civil economy.
2. A CCA for which the parties seek the benefit of Section 708(j)
of the DPA shall be identified as such and shall be submitted to the
Administrator for approval and certification in accordance with Section
708(f)(1)(A) of the DPA. Upon approval and certification, the
Administrator shall transmit the Agreement to the Attorney General for
a finding in accordance with Section 708(f)(1)(B) of the DPA. Parties
to approved CCAs may avail themselves of the antitrust defenses set
forth in Section 708(j) of the DPA. Nothing in VISA precludes
Participants from engaging in lawful conduct (including carrier
coordination activities) that lies outside the scope of an approved
Carrier Coordination Agreement; but antitrust defenses will not be
available pursuant to Section 708(j) of the DPA for such conduct.
3. Participants may seek approval for CCAs at any time.
G. Enrollment of Capacity (Ships and Equipment)
1. A list identifying the ships/capacity and intermodal equipment
committed by a Participant to each Stage of VISA will be prepared by
the Participant and submitted to USTRANSCOM within seven days after a
carrier has become a Participant. USTRANSCOM will maintain a record of
all such commitments. Participants will notify USTRANSCOM of any
changes not later than seven days prior to the change.
2. USTRANSCOM will provide a copy of each Participant's VISA
commitment data and all changes to MARAD.
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 DPA, 5 App. U.S.C. 552(b), 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.
H. War Risk Insurance
1. Where commercial war risk insurance is not available on
reasonable terms and conditions, DOT shall provide non-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(a)).
2. Pursuant to 46 CFR 308.1(c), the Administrator (or DOT) will
find each ship enrolled or utilized under this agreement eligible for
U.S. Government war risk insurance.
I. Antitrust Defense
1. Under the provisions of DPA Section 708, each carrier 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, that such act
was taken in the course of developing or carrying out this Agreement
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.
2. This defense shall not be available to the Participant for any
action occurring after termination of this Agreement. This defense
shall not 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. This defense shall be available only if and to the extent that
the Participant asserting it demonstrates that the action, which
includes a discussion or agreement, was within the scope of this
Agreement.
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, on behalf of SecTrans, and
DoD will support agreements filed by Participants with the Federal
Maritime Commission that are related to the standby or Contingency
implementation of VISA.
J. 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 a defense that the alleged breach of contract was caused
predominantly by action taken by a Participant during an emergency
(including action taken in imminent anticipation of an emergency) to
carry out this Agreement. Such defense shall not release the party
asserting it from any obligation under applicable law to mitigate
damages to the greatest extent possible.
K. Vessel Sharing Agreements (VSA)
1. VISA allows Participants the use of a VSA to utilize non-
Participant U.S. Flag or foreign-owned and operated foreign flag vessel
capacity as a substitute for VISA Contingency capability provided:
a. The foreign flag capacity is utilized in accordance with cargo
preference laws and regulations.
b. The use of a VSA, either currently in use or a new proposal, as
a substitution to meet DoD Contingency requirements is agreed upon by
USTRANSCOM and MARAD.
c. The Participant carrier demonstrates adequate control over the
offered VSA capacity during the period of utilization.
d. Service requirements are satisfied.
e. Participant is responsible to DoD for the carriage or services
contracted for. Though VSA capacity may be utilized to fulfill a
Contingency commitment, a Participant's U.S. Flag VSA capacity in
another Participant's vessel shall not act in a manner to increase a
Participant's capacity commitment to VISA.
2. Participants will apprise MARAD and USTRANSCOM in advance of any
[[Page 6845]]
change in a VSA of which it is a member, if such changes reduce the
availability of Participant capacity provided for in any approved and
accepted Contingency Concept of Operations.
3. Participants will not act as a broker for DoD cargo unless
requested by USTRANSCOM.
VII. Application and Agreement
The Administrator, in coordination with USCINCTRANS has adopted the
form on page 31 (``Application to Participate in the Voluntary
Intermodal Sealift Agreement'') on which intermodal ship operators may
apply to become a Participant in this 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 App. U.S.C. 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 or capacity, 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 Department of Defense Voluntary
Intermodal Sealift Agreement Enrollment Contract for the purpose of
meeting national defense requirement.
Attest:
----------------------------------------------------------------------
(Corporate Secretary)
(CORPORATE SEAL)
Effective Date: ------------------------------------------------------
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(Secretary
(SEAL)
----------------------------------------------------------------------
(Applicant-Corporate Name)
----------------------------------------------------------------------
(Signature)
----------------------------------------------------------------------
(Position Title)
United States of America, Department of Transportation, Maritime
Administration
By: ------------------------------------------------------------------
Maritime Administrator
BILLING CODE 4910-81-P
[[Page 6846]]
[GRAPHIC] [TIFF OMITTED] TN13FE97.000
Dated: February 10, 1997.
By Order of the Maritime Administrator.
Joel C. Richard,
Secretary.
[FR Doc. 97-3666 Filed 2-10-97; 4:10 pm]
BILLING CODE 4910-81-C