[Federal Register Volume 67, Number 224 (Wednesday, November 20, 2002)]
[Notices]
[Pages 70110-70112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29441]


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DEPARTMENT OF TRANSPORTATION

Transportation Security Administration

[Docket No. TSA-2002-13827]


Operation Safe Commerce

SUMMARY: The Transportation Security Administration (TSA), working in 
conjunction with an interagency Executive Steering Committee for 
Operation Safe Commerce (OSC), announces a program to identify and fund 
business driven initiatives to enhance security for the movement of 
cargo through the supply chain. The goal of OSC is to explore business 
processes and technology prototypes that protect commercial shipments 
from threats of terrorist attack, illegal immigration, and contraband 
while minimizing the economic impact upon the transportation system. 
The Ports of Los Angeles, Long Beach, Seattle, Tacoma, and the Port 
Authority of New York and New Jersey will be invited to submit 
proposals for funding consideration under this initiative. Persons and 
entities representing components of the supply chain may seek funding 
through these ports. The ports are encouraged to maximize their 
eligibility for funding by including representatives from all 
components of the supply chain, including major and minor load centers 
and feeder locations, their overseas customers and port partners, and 
the shipping lines serving these locations.
    The TSA is requesting comments on the proposed project criteria for 
the selection of candidate projects submitted by the ports noted above 
for funding consideration as Operation Safe Commerce projects.

DATES: Send your comments on or before December 5, 2002.

ADDRESSES: Address your comments to the Docket Management System, U.S. 
Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., 
Washington, DC 20590-0001. You must identify the docket number TSA-
2002-13827 at the beginning of your comments, and you should submit two 
copies of your comments. If you wish to receive confirmation that TSA 
received your comments, include a self-addressed, stamped postcard.
    You may also submit comments through the Internet to http://dms.dot.gov. You may review the public docket containing comments to 
these proposed regulations in person in the Dockets Office between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The 
Dockets Office is on the plaza level of the NASSIF Building at the 
Department of Transportation at the above address. Also, you may review 
public dockets on the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: Walter (Bud) Hunt, Office of Maritime 
and Land Security, Transportation Security Administration, 400 Seventh 
Street, SW., TSA-8, Washington, DC 20590; e-mail: 
[email protected]; telephone: 202-772-1045.

Background

    Over the past several years, the U.S. Department of Transportation 
(DOT) has sponsored numerous studies, conferences, outreach 
initiatives, and operational tests designed to facilitate and improve 
the efficiency of inter-modal freight movement. Much of this work has 
direct applicability to ensuring container cargo security within the 
transportation environment.
    In December 2001, Secretary of Transportation Mineta established 
the Container Working Group (CWG), which is co-chaired by the DOT and 
the U.S. Customs Service (Customs). This group, largely comprised of 
Federal agency representatives and members of the trade and 
transportation communities, has put forth a number of recommendations 
for improving the security of the cargo supply chain that need to be 
operationally tested.
    Building upon the successes of their existing programs, Customs has 
launched two key programs to ensure cargo security: the Customs--Trade 
Partnership Against Terrorism (C-TPAT) and the Container Security 
Initiative (CSI). Under C-TPAT, Customs is working with importers, 
carriers, brokers and other industry sectors in creating a seamless 
security conscious environment throughout the entire international 
commercial process. By providing a forum in which the business 
community and Customs can exchange anti-terrorism ideas, concepts and 
information, C-TPAT allows both the government and the business 
community to increase the security and efficiency of the entire 
commercial process from the point of manufacture through importation 
and distribution. Private sector participants in C-TPAT have made a 
commitment to improve the overall security of their supply chains, and 
communicate their established security procedures, guidelines, and 
expectations to their business partners.
    Through the CSI, Customs is working with the foreign ports that 
send the highest volume of container traffic into the United States, as 
well as the governments in these locations, to facilitate the detection 
of potential problems in the supply chain at the earliest possible 
opportunity. CSI will establish the necessary foundation for a more 
secure international supply chain through the implementation of the 
four core CSI elements: (1) Establishing security criteria to identify 
high-risk containers; (2) pre-screening those containers identified as 
high-risk before they arrive at U.S. ports; (3) using technology to 
quickly pre-screen high-risk containers; and (4) developing and using 
smart and secure containers.
    Operation Safe Commerce (OSC) is an innovative public-private 
partnership dedicated to enhancing security throughout international 
and domestic supply chains while facilitating the efficient cross-
border movement of legitimate commerce. This initiative began in New 
England as a local public-private partnership where Federal, State and 
local law enforcement entities and key private sector entities combined 
efforts to design, develop, and implement a means to test available 
technology and procedures in order to develop secure supply chains. The 
OSC New England initiative analyzed a supply chain shipment between 
Eastern Europe and New Hampshire. The full container shipment was 
fitted with onboard tracking, sensors and door seals. It was constantly 
monitored through the various transportation modes as it traveled 
through numerous countries and government control functions.
    OSC intends to build upon existing freight and information system 
operational tests sponsored by DOT and to support the procedural 
programs sponsored by Customs (e.g. C-TPAT and CSI) and to coordinate 
these efforts with new initiatives brought forward by the partnerships 
that carry out OSC operational testing. The synergies

[[Page 70111]]

among these various efforts are critical to the success of OSC.
    Congress, through the 2002 Supplemental Appropriations Act for 
Further Recovery From and Response To Terrorist Attacks on the United 
States, provided funds for OSC to improve the security of international 
and domestic supply chains through discreet pilot projects involving 
the three largest container load centers. See Pub. L. 107-206, 116 
Stat. 820 (Aug. 2, 2002); S. Rep 107-156, 107th Cong., 2nd sess. 84-85 
(May 29, 2002). As a result, the Ports of Los Angeles, Long Beach, 
Seattle, Tacoma, and the Port Authority of New York and New Jersey 
(hereafter referred to as load centers) will be invited to submit 
proposals for funding consideration under this initiative. Persons and 
entities representing components of the supply chain may seek funding 
through these ports. The ports are encouraged to maximize their 
eligibility for funding by including representatives from all 
components of the supply chain, including major and minor ports or port 
authorities and feeder locations, their overseas customers and port 
partners, and the shipping lines serving these locations.
    An Executive Steering Committee (ESC) provides OSC oversight, 
guidance, and support. The ESC is co-chaired by the Associate Deputy 
Secretary of the Department of Transportation and the Deputy 
Commissioner of the U.S. Customs Service, and includes representatives 
of the Transportation Security Administration, the U.S. Coast Guard, 
the Departments of State, Justice, and Commerce, and the Office of 
Homeland Security. Other appropriate government agencies may be invited 
to provide a representative to the ESC.

Goals

    The goal of OSC is to explore commercially viable options that 
support cargo management systems that keep pace with expanding trade 
while protecting commercial shipments from threats of terrorist attack, 
illegal immigration, illegal drugs and other contraband. OSC will 
address three key components to secure the supply chain through pilot 
projects funded by TSA. OSC will demonstrate what is needed to ensure 
that parties associated with commercial shipping exert reasonable care 
and due diligence in packing, securing and manifesting the contents of 
a shipment of goods in a container. OSC will also demonstrate various 
methods to ensure that the information and documentation associated 
with these shipments is complete, accurate and secure from unauthorized 
access. These methods may entail transmitting the associated shipping 
information and documentation in a secure electronic format. OSC will 
also test supply chain security procedures and practices in order to 
determine the impact of these procedures when combined with the 
implementation of enhanced manifest data elements and container sealing 
procedures (including effective intrusion detection). The ESC will 
examine the three components to determine the most effective method to 
lessen the susceptibility of a container shipment to being compromised 
while in transit in the international or domestic supply chain.
    OSC will serve as a technology and business practice ``laboratory'' 
to identify and explore innovative solution sets that support the 
principles and objectives associated with numerous Federal initiatives 
such as the CWG, CSI, C-TPAT, and other ongoing initiatives like the 
DOT Intelligent Transportation System. The ESC believes successful 
operational tests will require innovative public-private partnerships 
that bring all the necessary participants together. Private companies 
will need to join with representatives from key Federal, State, and 
local authorities to support these tests.
    Through these public and private partnerships, OSC requires the use 
of an actual operating environment to assess various prototypes for the 
secure movement of containerized freight. Utilizing these partnerships, 
OSC provides a ``virtual laboratory'' for designing and evaluating 
security and transportation solutions. OSC thus supports identification 
of an appropriate set of standard security practices to govern the 
handling and movement of cargo throughout the supply chain. The results 
of these tests offer decision makers a timely and sound basis for 
developing Federal standards.

Criteria for Operation Safe Commerce Projects

    OSC seeks proposals from the transport sector practioners who can 
recognize and propose projects that will meet these goals. If these 
technologies and procedures are to be successful and minimize the 
impact upon all parties, they must employ efficient and cost effective 
methods of validating the security of processes for stuffing and 
deconsolidating containers, physically securing and monitoring the 
containers throughout the supply chain, and exchanging timely and 
reliable information. These cost effective solutions must have the 
ability to be replicated and scaled for use in commercial shipping 
applications.
    Projects receiving funding under OSC should analyze and prototype a 
secure and efficient supply chain by addressing one or more of the 
following key components to secure the supply chain:
    [sbull] Validate security at the point of origin, to include the 
security of the shipment itself (i.e., the security of the facility and 
the people where the container is stuffed) and the information that 
describes it;
    [sbull] Secure the supply chain from the point of origin of the 
shipment to its final destination, which shall include all waypoints;
    [sbull] Enhance the accuracy and communication of cargo information 
used by Federal agencies, carriers, and shippers;
    [sbull] Monitor the movement and integrity of cargo in transit 
(e.g., pilot the use of commercial-off-the-shelf (COTS) technology and 
emerging technologies such as Global Positioning System (GPS) 
transceivers, sensors, electronic seals, container design, and data 
querying).
    The ESC will provide oversight, guidance and support to OSC 
projects so they can integrate with broader governmental objectives and 
communicate governmental efforts to address container security and 
efficiency. The ESC will review, coordinate, and monitor the projects 
funded by OSC. The ESC is considering adopting the following funding 
criteria which proposed projects must meet for the ESC to recommend the 
project for funding through the TSA:
    (a) A private/public partnership (hereafter referred to as the 
``partnership'') must be established that includes participants in the 
supply chain such as all affected shippers (e.g., exporters, importers, 
manufacturers), carriers (all modes), intermediaries (e.g., freight 
forwarders, freight consolidators, freight brokers), terminal 
operators, labor, local DOT and Customs, and other relevant local and 
State governmental officials as needed, depending on the supply chain 
being proposed. Partnerships requesting funding for projects must be 
sponsored by one of the following U.S. based load centers: Ports of Los 
Angeles, Long Beach, Seattle, Tacoma, and the Port Authority of New 
York and New Jersey
    (b) The partnership's proposal should articulate how the 
operational test will complement and include stakeholders currently 
participating in existing freight and information system operational 
tests sponsored by DOT, and the supply chain security initiatives 
sponsored by Customs (e.g. C-TPAT and CSI).

[[Page 70112]]

    (c) The partnership must obtain signed letters of commitment from 
all members of the partnership that describe and quantify the assets 
they will utilize during the operational tests.
    (d) The partnership must be willing to have all information 
resulting from the analysis available to supply chain participants. 
Prototyped solutions should reside in the public domain. Proprietary 
information (i.e., data relating to specific, identifiable transactions 
or assets of participants that are sensitive and of commercial value to 
their competitors, or reveals specific threats to the supply chain that 
could be exploited) is not considered to be part of the public domain 
for purposes of these analyses and operational tests, and will be made 
available only by authorized release from the owner of the information.
    (e) The partnership must establish a point-of-contact and an 
alternate to interface with the ESC or its representative. The point of 
contact must be included in the written application.
    (f) The partnership must be willing to assemble participants in the 
supply chain to test procedures and technologies identified as 
potential solutions. The partnership should also consider including 
typical supply chain activities originating or transshipped outside the 
immediate port area.
    (g) The TSA will provide full or partial funding for selected 
projects. TSA encourages grant recipients to consider partial funding 
of projects from other sources including internal funding.
    TSA invites comments on these proposed criteria. Once finalized, 
these criteria may also be used in the selection of future projects 
under OSC.

Proposal Submission

    Partnerships that meet the above criteria should submit their 
applications for grants to the address provided in the forthcoming 
Grant Program Announcement (GPA).

External Funding Through Grants

    The GPA will contain instructions on how to submit the application. 
Subject matter experts, in accordance with a Technical Evaluation Plan, 
will review the applications. Evaluations and final selection of the 
application will be based on criteria published in the GPA. TSA will 
administer the grants issued under the OSC.

Federal Advisory Committee

    The OSC ESC will seek industry and private sector input and 
discussion on OSC related issues by soliciting feedback and comments 
from existing Federal Advisory Committees already designated to afford 
the Departments of Treasury and Transportation advice. Consequently, 
the Customs Operational Advisory Committee (COAC) and the Marine 
Transportation System National Advisory Committee (MTSNAC) will serve 
this purpose and will be invited to afford the OSC ESC comments, input, 
and advice on OSC related issues at the request of the OSC ESC.

Comments

    TSA is providing a 15-day comment period during which members of 
the public are invited to submit comments on the selection criteria for 
projects to be funded under OSC. Before finalizing the selection 
criteria, consideration will be given to any written comments that are 
received by the TSA prior to the end of the comment period. A 15-day 
comment period is being provided due to the urgent necessity for TSA to 
move forward in achieving the goals of OSC. Comments received after the 
comment period will be considered to the extent that it is practicable. 
The TSA specifically requests comments on the project criteria for OSC 
and comments on specific potential projects including whether 
consideration should be given to projects that test shipments 
originating in specific countries of interest. Commenters should not 
use this process to propose projects for funding under OSC. They should 
follow the process described in the forthcoming GPA.

    Issued in Washington, DC on November 12, 2002.
J.M. Loy,
ADM, Acting Under Secretary of Transportation for Security.
[FR Doc. 02-29441 Filed 11-19-02; 8:45 am]
BILLING CODE 4110-62-P