[Federal Register Volume 71, Number 195 (Tuesday, October 10, 2006)]
[Notices]
[Pages 59496-59498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16685]


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DEPARTMENT OF DEFENSE

Department of the Army


Publication of Changes to Surface Deployment and Distribution 
Command Policy TR-12, Fuel Related Rate Adjustment Policy

AGENCY: Department of the Army, DOD.

ACTION: Notice IAW 41 U.S.C. 418b.

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SUMMARY: SDDC intends to modify SDDC Policy TR-12. SDDC intends to 
implement the modified policy 90 (ninety) days from publication in the 
Federal Register. Modifications include the following: 1. SDDC will no 
longer pay a Fuel Related Adjustment (FRA) or fuel surcharge on 
movements based on what is known as a ``Spot Bid'' tender. 2. SDDC will 
no longer pay an FRA for any type of rail shipment. 3. SDDC will pay an 
FRA based on an updated baseline of $2.50 rather than a baseline of 
$1.30.

DATES: SDDC intends to implement the policy change 90 (ninety) days 
from publication in the Federal Register, except that the effective 
date of the policy change for the SDDC Personal Property Program is 
April 1, 2007 for the domestic line haul portion of international 
movements and May 1, 2007 for the line haul portion of

[[Page 59497]]

domestic interstate and intrastate movements including Alaska and 
Hawaii. Until the policy change goes into effect for Personal Property 
Program shipments, the policy in TR-12 dated October 5, 2005 shall 
continue to be used to determine payment for Personal Property Program 
shipments.

ADDRESSES: Submit comments to Ms. Carol Breen, 200 Stovall St., Hoffman 
II, Room 11S19, Alexandria, VA 22332. Request for additional 
information may be sent by e-mail to: [email protected].

SUPPLEMENTARY INFORMATION: 

 Military Surface Deployment And Distribution Command (SDDC)--
Transportation and Travel

[Policy No. TR-12]

Subject: Fuel-Related Adjustment (FRA) Policy

    This version of Policy No. TR-12 supersedes all previous versions 
of TR-12, except to the extent that a previous version is explicitly 
referenced as the basis for payment in an agreement with SDDC.
A. Policy
    1. The following FRA or fuel surcharge policy applies to commercial 
carrier freight and personal property movements within the United 
States. SDDC will pay an FRA for certain types of domestic movements, 
as stated in paragraph E. SDDC will no longer pay an FRA on ``Spot 
Bid'' movements, regardless of mode. Nor will SDDC pay an FRA for any 
type of rail shipment. This policy provides the transportation 
industry, including individual carriers, economic adjustment and 
reasonable relief for unanticipated increases in diesel fuel prices. 
Carriers are urged to consider anticipated variation in fuel prices 
when submitting or supplementing rates during rate filing and/or bid 
submission periods.
    2. Written provision will be made in SDDC regulations and solicited 
tender agreements for FRAs. At the sole discretion of the appropriate 
Contracting Officer this policy may be applied to Federal Acquisitions 
Regulation (FAR) contracts. SDDC has no obligation whatsoever to apply 
this policy to FAR contracts other than where the appropriate 
Contracting Officer determines that it shall apply.
B. Effective Date
    The effective date of the policy change is 90 (ninety) days from 
publication in Federal Register, except that the effective date of the 
policy change for the SDDC Personal Property Program is April 1, 2007 
for the domestic line haul portion of international movements and May 
1, 2007 for the line haul portion of domestic interstate and intrastate 
movements including Alaska and Hawaii. Until the policy change goes 
into effect for Personal Property Program shipments, the policy in TR-
12 dated October 5, 2005 shall continue to be used to determine payment 
for Personal Property Program shipments.
C. Expiration Date
    This policy is in effect until superseded or withdrawn in writing.
D. Definitions
    The following definitions shall apply to terms used in this 
regulation.
    1. Fuel Cost: The national average diesel fuel price published by 
the Department of Energy (DOE) Energy Information Administration (EIA). 
The diesel fuel prices published by the EIA may be found via the 
following sources:

--EIA Website: http://www.eia.doe.gov/
--EIA Weekly Petroleum Status Report
--EIA Hotline: (202) 586-6966

    2. Pick up date: The date listed on the bill of lading indicating 
the calendar day on which the carrier takes possession of a given 
shipment.
    3. Spot Bid: A flexible and responsive one-touch electronic 
resource that posts open shipments for bid by qualified carriers via 
the Internet. It is a viable acquisition alternative for procuring 
transportation services for one-time only, unique shipments of any or 
all modes. It supports SDDC Operations policy on overweight/over-
dimensional shipments. Carriers bid on open shipments via the Internet, 
and bids remain sealed until the bid timeframe closes. It allows the 
Shipper to establish the bidding timeframe. Bids are used in place of 
standard tenders in the generation of a Bill of Lading. It also 
provides automatic open shipment notification for participating 
carriers. All submitted bids reflect an all-inclusive expense 
representing line haul, accessorial charges, and any additional 
expenses anticipated to support that particular shipment.
E. Application
    SDDC shall pay an FRA in accordance with this policy on the 
following types of movements.
    1. Personal Property Program: a. Pickup occurs on or after April 1, 
2007 for the domestic line haul portion of international movements and 
on or after May 1, 2007 for the line haul portion of domestic 
interstate and intrastate movements including Alaska and Hawaii.
    b. The transportation charges applicable on domestic and 
international storage-in-transit shipments when such shipments are 
delivered or removed from the domestic storage-in transit warehouse of 
the CONUS segment including Alaska and Hawaii.
    2. Domestic Freight Program: a. The domestic line haul portion of 
the carrier rate including Alaska and Hawaii.
    b. The accessorial, Commercial Security Escort Vehicles (CSEV).
F. Determination of Adjustment Amount
    1. Formula: For applicable shipments, the FRA shipments shall be 
paid based on a percentage of the line-haul rate. The line-haul rate 
does not include accessorials unless specified in the policy, i.e., 
E.2.b, or specifically called for in the solicitation for the freight 
movement on which the FRA is based. Where the FRA applies, SDDC shall 
pay the carrier 1% (one percent) of the line-haul rate, not including 
accessorial charges, for every increment of $.10 (ten cents) by which 
the fuel cost exceeds $2.50 at the time of pickup.
    2. Determination of Fuel Cost at Time of Shipment: a. For 
applicable personal property program shipments, SDDC shall pay the FRA 
based on the fuel cost published on the first Monday of the month in 
which the shipment subject to the FRA is picked up. If Monday is a 
holiday the fuel price will be determined based on the price on the 
next business day. The fuel adjustment will automatically apply to 
shipments picked up on or after the 15th day of the month through the 
14th day of the following month.
    b. For applicable domestic freight program shipments, SDDC shall 
pay the FRA based on the fuel cost published on the Monday of the week 
in which the shipment subject to the FRA was picked up. If Monday is a 
holiday the fuel price will be determined based on the price on the 
next business day.
G. Monitoring Diesel Fuel Prices
    1. Fuel Price Source: It is the responsibility of the carrier to 
monitor diesel fuel prices via one of the sources identified in this 
policy. The National Average diesel fuel price determined by the DOE, 
EIA will serve as the basis for determining the entitlement to an FRA. 
The National Average fuel price and the actual pickup date of shipment 
will determine if there is an entitlement to an adjustment and the 
amount of the adjustment. An adjustment is not applicable to any 
portion of transportation in which a surcharge or

[[Page 59498]]

any other additional payment for fuel is already in existence.
    2. Percentage: Please see the table included to the Attachment to 
this policy for a demonstration of the percentage amount of the FRA for 
applicable shipments.
H. Billing Procedures
    Carriers will clearly show fuel price adjustments on all paper and 
electronic commercial freight bills and Bills of Lading and invoices. 
The amount of any diesel fuel rate surcharge must be shown as a 
separate item on the carrier's invoice.

Regulatory Flexibility Act

    This action is not considered rulemaking within the meaning of 
Regulatory Flexibility Act, 5 U.S.C. 601-612.

Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 3051 et seq., does not apply 
because no information collection or record keeping requirements are 
imposed on contractors, offerors or members of the public.

David R. McClean,
Colonel, U.S. Army, Deputy Chief of Staff for Strategy, Plans, Policy 
and Programs.

Attachment

    The table below demonstrates the percentage of the line-haul 
rate SDDC will pay at a given fuel cost given a $2.50 baseline. 
Should the baseline differ at any time, the same principle applies 
simply with a different starting point for calculating the percent 
adjustment. The table ends at $4.40, but the same principle applies 
to fuel costs above that dollar amount.

------------------------------------------------------------------------
                                                        Rate adjustment
                   Cost per gallon                         (percent)
------------------------------------------------------------------------
250.0 and below......................................                  0
251.1--260.0.........................................                  1
260.1--270.0.........................................                  2
270.1--280.0.........................................                  3
280.1--290.0.........................................                  4
290.1--300.0.........................................                  5
300.1--310.0.........................................                  6
310.1--320.0.........................................                  7
320.1--330.0.........................................                  8
330.1--340.0.........................................                  9
340.1--350.0.........................................                 10
350.1--360.0.........................................                 11
360.1--370.0.........................................                 12
370.1--380.0.........................................                 13
380.1--390.0.........................................                 14
400.1--410.0.........................................                 15
410.1--420.0.........................................                 16
420.1--430.0.........................................                 17
430.1--440.0.........................................                 18
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    For example, if the reported DOE, EIA National Average diesel 
fuel price is $3.15 the carrier would be entitled to an FRA of 7% of 
the line-haul rate.
[FR Doc. E6-16685 Filed 10-6-06; 8:45 am]
BILLING CODE 3710-08-P