[Federal Register Volume 64, Number 119 (Tuesday, June 22, 1999)]
[Proposed Rules]
[Pages 33238-33239]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15836]


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DEPARTMENT OF DEFENSE

48 CFR Parts 212, 247, and 252

[DFARS Case 98-D014]


Defense Federal Acquisition Regulation Supplement; Cargo 
Preference--Subcontracts for Commercial Items

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: The Director of Defense Procurement is proposing to amend the 
Defense Federal Acquisition Regulation Supplement (DFARS) guidance 
regarding the applicability of statutory requirements for use of U.S. 
vessels in the transportation of DoD supplies by sea. The DFARS 
presently waives these requirements for subcontracts for the 
acquisition of commercial items. This rule would require the use of the 
U.S. vessels under certain subcontracts for commercial items.

DATES: Comments on the proposes rule should be submitted in writing to 
the address specified below on or before August 23, 1999, to be 
considered in the formation of the final rule.

ADDRESSES: Interested parties should submit written comments on the 
proposed rule to: Defense Acquisition Regulations Council, Attn: Ms Amy 
Williams, PDUSD (A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, 
Washington, DC 20301-3062. Telefax (703) 602-0350. Please cite DFARS 
Case 98-D014.
    E-mail comments submitted over the Internet should be addressed to: 
[email protected].
    Please cite DFARS Case 98-D014 in all correspondence related to 
this proposed rule. E-mail correspondence should cite DFARS Case 98-
D014 in the subject line.

FOR FURTHER INFORMATION CONTACT:
Ms. Amy Williams, (703) 602-0131. Please cite DFARS Case 98-D014.

SUPPLEMENTARY INFORMATION: 

A. Background

    10 U.S.C. 2631 provides a preference for use of U.S. vessels for 
ocean transportation of supplies purchased under DoD contracts. DFARS 
Parts 212 and 247 presently waive the requirements of 10 U.S.C. 2631 
for subcontracts for the acquisition of commercial items or commercial 
components. This rule proposes to amend DFARS Parts 212 and 247 and 
corresponding clauses to limit the types of subcontracts for which the 
waiver of 10 U.S.C. 2631 is applicable. The rule is intended to ensure 
compliance with 10 U.S.C. 2631 for ocean cargoes clearly destined for 
DoD cause, while avoiding disruption of commercial delivery systems.

B. Regulatory Flexibility Act

    The proposed rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most 
entities providing ocean transportation of cargo are not small business 
concerns. Therefore, an initial regulatory flexibility analysis has not 
been performed. Comments are invited from small businesses and other 
interested parties. Comments from small entities concerning the 
affected DFARS subparts also will be considered in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 98-D014 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
rule does not impose any information collection requirements that 
require the approval of the Office of Management and Budget under 44 
U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 212, 247, and 252

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, 48 CFR Parts 212, 247, and 252 are proposed to be 
amended as follows:
    1. The authority citation for 48 CFR Parts 212, 247, and 252 
continues to read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

    2. Section 212.504 is amended by revising paragraph (a)(xxii) to 
read as follows:


Sec. 212.504  Applicability of certain laws to subcontracts for the 
acquisition of commercial items.

    (A) * * *
    (xxii) 10 U.S.C. 2631, Transportation of Supplies by sea (except 
for the types of supplies listed at 252.247-7023(b)).
* * * * *

PART 247--TRANSPORTATION


Sec. 247.572-1  [Amended]

    3. Section 247.572-1 is amended in paragraph (a) by removing the 
last sentence.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Section 252.212-7001 is amended by revising the clause date; in 
paragraph (b) by adding in numerical order the entry ``____252.247-7023 
Transportation of Supplies by Sea (10 U.S.C. 2631).''; and by revising 
paragraph (c) to read as follows:


Sec. 252.212-7001  Contract Terms and Conditions Required to Implement 
Statutes or Executive Orders Applicable to Defense Acquisitions of 
Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders Applicable to Defense Acquisitions of Commercial Items 
(XXX 1999)

* * * * *
    (c) In addition to the clauses listed in paragraph (e) of the 
Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders--Commercial Items

[[Page 33239]]

clause of this contract, the Contractor shall include the terms of 
the following clauses, if applicable, in subcontracts for commercial 
items or commercial components, awarded at any tier under this 
contract:
    252.225-7014 Preference for Domestic Specialty Metals, Alternate 
I (10 U.S.C. 2241 note).
    252.247-7023 Transportation of Supplies by Sea (10 U.S.C. 2631).
    252.247-7024 Notification of Transportation of Supplies by Sea 
(10 U.S.C. 2631).

(End of clause)

    5. Section 252.244-7000 is revised to read as follows:


Sec. 252.244-7000  Subcontracts for Commercial Items and Commercial 
Components (DoD Contracts).

    As prescribed in 244.403, use the following clause:

Subcontracts for Commercial Items and Commercial Components (DOD 
Contracts) (XXX 1999)

    In addition to the clauses listed in paragraph (c) of the 
Subcontracts for Commercial Items and Commercial Components clause 
of this contract, the Contractor shall include the terms of the 
following clauses, if applicable, in subcontracts for commercial 
items or commercial components, awarded at any tier under this 
contract:
    252.225-7014 Preference for Domestic Specialty Metals, Alternate 
I (10 U.S.C. 2241 note).
    252.247-7023 Transportation of Supplies by Sea (10 U.S.C. 2631).
    252.247-7024 Notification of Transportation of Supplies by Sea 
(10 U.S.C. 2631).

(End of clause)

    6. Section 252.247-7023 is amended by revising the clause date; in 
paragraph (a)(5) by removing the last sentence; by redesignating 
paragraphs (b) through (g) as paragraphs (c) through (h) respectively; 
by adding a new paragraph (b); in newly designated paragraph (c) by 
removing the first sentence; and by revising newly designated paragraph 
(h). The added and revised text reads as follows:


Sec. 252.247-7023  Transportation of Supplies by Sea.

* * * * *

Transportation of Supplies by Sea (XXX 1999)

* * * * *
    (b) The Contractor shall use U.S.-flag vessels when transporting 
any supplies by sea under this contract. A subcontractor 
transporting supplies by sea under this contract shall use U.S.-flag 
vessels if--
    (1) This contract is a construction contract; or
    (2) The supplies being transported are--
    (i) Non-commercial items; or
    (ii) Commercial items that are--
    (A) Shipped in direct support of U.S. military contingencies, 
exercises, or forces deployed in peacekeeping missions.
    (B) For commissary or exchange cargoes transported outside of 
the Defense Transportation System in accordance with 10 U.S.C. 2643; 
or
    (C) Items the Contractor is reselling or distributing to the 
Government without adding value. (Generally, the Contractor does not 
add value with it subcontracts items for f.o.b. destination 
shipment.)
* * * * *
    (h) The Contractor shall include this clause, including this 
paragraph (h), in all subcontracts under this contract that--
    (1) Exceed the simplified acquisition threshold in Part 2 of the 
Federal Acquisition Regulation; and
    (2) Are for a type of supplies described in paragraph (b) of 
this clause.

(End of Clause)

    7. Section 252.247-7024 is amended by revising the clause date and 
paragraph (b) to read as follows:


252.247-7024  Notification of Transportation of Supplies By Sea.

* * * * *

Notification of Transportation of Supplies by Sea (XXX 1999)

* * * * *
    (b) The Contractor shall include this clause, including this 
paragraph (b), revised as necessary to reflect the relationship of 
the contracting parties--
    (1) In all subcontracts under this contract, if this contract is 
a construction contract; or
    (2) If this contract is not a construction contract, in all 
subcontracts under this contract that are for--
    (i) Non-commercial items; or
    (ii) Commercial items that are--
    (A) Shipped in direct support of U.S. military contingencies, 
exercises, or forces deployed in peacekeeping missions;
    (B) For commissary or exchange cargoes transported outside of 
the Defense Transportation System in accordance with 10 U.S.C. 2643; 
or
    (C) Items the Contractor is reselling or distributing to the 
Government without adding value. (Generally, the Contractor does not 
add value when it subcontracts items for f.o.b. destination 
shipment.)

(End of clause)

[FR Doc. 99-15836 Filed 6-21-99; 8:45 am]
BILLING CODE 5000-04-M