[Federal Register Volume 79, Number 112 (Wednesday, June 11, 2014)]
[Rules and Regulations]
[Pages 33474-33477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-13652]


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GENERAL SERVICES ADMINISTRATION

41 CFR Part 102-117

[Change 2014-03; FMR Case 2012-102-5; Docket 2012-0017, Sequence 1]
RIN 3090-AJ34


Federal Management Regulation (FMR); Restrictions on 
International Transportation of Freight and Household Goods

AGENCY: Office of Government-wide Policy (OGP), General Services 
Administration (GSA).

ACTION: Final rule.

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SUMMARY: GSA is amending the Federal Management Regulation (FMR) 
provisions pertaining to the use of United States air carriers for 
cargo under the ``Fly America Act''; updating the current provisions in 
the FMR regarding the Cargo Preference Act of 1954, as amended; and 
clarifying FMR language to state clearly that this part applies to all 
agencies and wholly-owned Government corporations except where 
otherwise expressly provided.

DATES: This final rule is effective June 11, 2014.

FOR FURTHER INFORMATION CONTACT: Lee Gregory, Office of Asset and 
Transportation Management, Office of Government-wide Policy, General 
Services Administration, 1800 F Street NW., Washington, DC 20405, by 
phone at (202) 507-0871 or by email at [email protected]. Please cite 
FMR Case 2012-102-5.

SUPPLEMENTARY INFORMATION:

A. Background

    GSA reviewed the transportation management policy regarding 
international shipments and published a proposed rule in the Federal 
Register on June 19, 2013 (78 FR 36723).
    The Fly America Act, 49 U.S.C. 40118, requires the use of United 
States air carrier service for all air cargo transportation services 
funded by the United States (U.S.) Government. One exception to this 
requirement is transportation provided under a bilateral or 
multilateral air transport agreement, to which the U.S. Government and 
the government of a foreign country are parties, and which the 
Department of Transportation has determined meets the requirements of 
the Fly America Act.
    The U.S. Government has entered into several air transport 
agreements that allow Federally-funded transportation services for 
cargo movements to use foreign air carriers under certain 
circumstances. For example, on April 25 and April 30, 2007, the United 
States-European Union (EU) Air Transport Agreement (U.S.-EU Agreement) 
was signed, providing EU air carriers the right to transport cargo, 
including household goods, on scheduled and charter flights funded by 
the U.S. Government (excluding transportation funded by the Secretary 
of Defense or in the Secretary of a military department), between any 
point in the U.S. and any

[[Page 33475]]

point in an EU Member State or between any two points outside the U.S. 
for which a U.S. Government civilian Department, Agency, or 
instrumentality: (1) Obtains the transportation for itself or in 
carrying out an arrangement under which payment is made by the U.S. 
Government or payment is made from amounts provided for use of the U.S. 
Government; or (2) provides transportation to or for a foreign country 
or international or other organization without reimbursement.
    The U.S. Government and the European Union amended the U.S.-EU 
Agreement with a Protocol signed on June 24, 2010. In the amended 
agreement, the U.S. further extended the rights of EU air carriers to 
transport cargo on scheduled and charter flights funded by the U.S. 
Government between any point in the United States and any point outside 
the United States, or between any two points outside the United States. 
Norway and Iceland joined the U.S.-EU Air transportation agreement as 
amended by the Protocol on June 21, 2011, granting carriers from those 
countries the same rights.
    The U.S. Government has air transport agreements with Australia, 
Switzerland, and Japan, which allow carriers from those countries to 
transport cargo subject to the Fly America Act between their respective 
home countries and the United States and between two points outside the 
United States. The provisions in the agreements with Australia and 
Switzerland became effective on October 1, 2008. The provisions in the 
agreement with Japan took effect on October 1, 2011.
    The U.S. Government previously entered into an agreement with Saudi 
Arabia regarding Federally-funded transportation services for cargo 
movements under which Saudi Arabian air carriers are permitted to 
transport cargo from Saudi Arabia to the United States and from the 
United States to Saudi Arabia when the transportation is funded by U.S. 
Government contractors providing services to Federal Government 
entities.
    Accordingly, rather than amend the FMR to include language from 
agreements, and thereafter amending the FMR each time there is a change 
in air transport agreements that affect U.S. Government-funded cargo 
transportation, GSA is issuing this final rule that directs customers 
to the Department of State Internet-based source of information (http://www.state.gov/e/eb/tra/ata/index.htm) relating to such agreements. 
This approach will allow GSA to provide and quickly update relevant 
information as new agreements are signed or current agreements are 
amended without invoking the regulatory process. In the future, if GSA 
were to determine that further guidance is necessary, GSA may issue FMR 
Bulletins, or involve the regulatory process, as appropriate.
    Additionally, GSA is updating the FMR to include exceptions to the 
Fly America Act, such as cargo transportation services that are fully 
reimbursed by a third party, e.g., a foreign government, an 
international agency, or other organization. As the Federal Government 
is not expending any of its own funds, such services are not covered by 
the Fly America Act.
    Further, in accordance with 49 U.S.C. 40118(c), GSA is amending 
regulations under which agencies may expend appropriations for cargo 
transportation using foreign air carriers when it is deemed necessary. 
There have been limited circumstances in the past where the use of a 
foreign air carrier was deemed necessary. For example, when the 
Government Accountability Office (formerly the General Accounting 
Office), had responsibility for implementing the Fly America Act, the 
Comptroller General held that when time requirements could not be met 
the use of a foreign flag carrier was deemed necessary (See The 
Honorable Norman Y. Mineta Chairman, Subcommittee on Aviation Committee 
on Public Works and Transportation, House of Representatives, 
Comptroller General, B-210293, June 13, 1983).
    The use of foreign carriers should be very limited and agency 
approval should only be granted after a determination that one or more 
of these circumstances exist: No U.S. flag air carrier can provide the 
specific air transportation needed; no U.S. flag air carrier can 
accomplish the agency's mission; no U.S. flag air carrier can meet the 
time requirements in cases of emergency; there is a lack of or 
inadequate U.S. flag air carrier aircraft, or to avoid an unreasonable 
risk to safety when using a U.S. flag air carrier.
    Further, this final rule updates FMR section 102-117.135(b) to 
include the current telephone number, email address, and Web site for 
the Department of Transportation Maritime Administration (MARAD), 
Office of Cargo Preference and Domestic Trade. This final rule also 
identifies the Web site for agencies to go to for information that 
MARAD requires to be submitted by the shipping Department or Agency 
when cargo is shipped subject to 46 U.S.C. 55305, the Cargo Preference 
Act of 1954, as amended.
    Finally, GSA is revising the language in FMR section 102-117.15 to 
state clearly that this part applies to all agencies and wholly-owned 
Government corporations except as otherwise expressly provided.

B. Public Comments and Responses

    In the proposed rule, GSA provided the public a 30-day comment 
period which ended on July 19, 2013. GSA received five recommendations 
from the National Air Carrier Association (NACA). NACA represents 16 
member carriers who transport cargo and passengers on both scheduled 
and non-scheduled U.S. domestic and international flights. NACA 
comments related to the focus of the proposed change; how GSA will 
monitor and control compliance with the Fly America Act; and questioned 
how there will be consistency of interpretations by U.S. Government 
agencies for the exceptions listed.
    Comment: There must be a mechanism to ensure U.S. Government 
agencies arrange flights using foreign flag air carriers only when it 
is a matter of necessity, on a case-by-case basis, according to the 
exceptions listed in the amendment.
    Response: Regulatory and other guidance already exists that allows 
agencies to use foreign flag air carriers only when it is a matter of 
necessity. These include the Comptroller General Decision B-138942, 
issued March 31, 1981, requiring agency decision and certifications to 
be attached to the voucher; the Federal Acquisition Regulation (FAR) 
that governs Federal contracts for civilian agencies in Part 47, 
Transportation, which contains guidance for the implementation of the 
Fly America Act (48 CFR 47.403 and 47.404); the Federal Travel 
Regulation (FTR) which addresses Federal travel and relocation (41 CFR 
301-10.141, et seq.), and agency policy that regulates the use of 
foreign flag carriers.
    Comment: Each of the exceptions is subject to interpretation, but 
the one referring to ``. . . an unreasonable risk to safety'' appears 
to be particularly questionable. Which U.S. Government agency will be 
responsible to make the determination that the flight is too risky for 
an U.S. flag carrier? U.S. flag carriers must be included in the risk 
assessment.
    Response: Additional language for clarification regarding ``an 
unreasonable risk to safety'' has been incorporated into this final 
rule. An agency decision must be supported by an advisory alert issued 
by the Federal Aviation Administration, Department of State, or the 
Transportation Security Administration.
    Comment: There must be proof supplied in every case by agencies

[[Page 33476]]

arranging flights using foreign flag air carriers.
    Response: As identified in the response to the first comment above, 
regulatory and other guidance already exists for agencies to follow for 
flights using foreign flag air carriers.
    Comment: GSA should announce to the public, in advance, all flights 
proposed by U.S. Government agencies that would use foreign flag air 
carriers in accordance with this amendment, including the proof as to 
why a foreign flag air carrier is proposed to be used. This will allow 
U.S. air carriers the opportunity to comment, object, and appeal the 
intent to use a foreign flag carrier. GSA should propose a simple 
method to announce these flights to the public.
    Response: The comments are outside the scope of this rule.
    Comment: Note following (3)(v) of this amendment: The use of 
foreign flag air carriers should be rare. NACA urges GSA to replace 
this note with: (1) A transparent mechanism to allow advance notice of 
proposed use of foreign carriers, (2) an appeal process for U.S. flag 
carriers to object, and (3) a commitment to continue monitoring use of 
foreign flag air carriers by U.S. Government agencies. Only then will 
it be possible to ensure strict compliance with all provisions of the 
Fly America Act.
    Response: The proposed amendment ``note'' text following (3)(v) has 
been placed into the regulation at section 102-117.135(a), Air Cargo. 
GSA agrees that the use of foreign-flag air carriers should be rare.
    The comments regarding the three steps are outside the scope of 
this rule. It is each agency's responsibility to procure and manage 
their foreign air carrier transportation requirements.

C. Changes

    This final rule--
     Applies to all agencies and wholly owned Government 
corporations as defined in 5 U.S.C. 101, et seq., and 31 U.S.C. 
9101(3), except as otherwise expressly provided.
     Updates current provisions pertaining to the use of U.S. 
air carriers for cargo under the provisions of 49 U.S.C. 40118, 
commonly referred to as the ``Fly America Act,'' and the 46 U.S.C. 
55305, the Cargo Preference Act of 1954, as amended.
     Clarifies the exceptions to the requirement of using U.S. 
flag air carriers.
     Revises contact information and Web sites for the 
Department of Transportation, Maritime Administration (MARAD).

D. Executive Orders 12866 and 13563

    Executive Orders (E.O.) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. This is 
not a significant regulatory action, and therefore, would not be 
subject to review under Section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule would not be a major 
rule under 5 U.S.C. 804.

E. Regulatory Flexibility Act

    While these revisions are substantive, this final rule will not 
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. This final rule is also exempt from the Regulatory 
Flexibility Act per 5 U.S.C. 553(a)(2) because it applies to agency 
management or personnel.

F. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FMR would not impose recordkeeping or information collection 
requirements, or the collection of information from offerors, 
contractors, or members of the public that require the approval of the 
Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq.

G. Small Business Regulatory Enforcement Fairness Act

    This final rule is also exempt from Congressional review prescribed 
under 5 U.S.C. 801 since it relates to agency management or personnel.

List of Subjects in 41 CFR Part 102-117

    Air Cargo, International Transportation, Ocean Cargo, 
Transportation Management, U.S. flag carriers.

    Dated: April 3, 2014.
Dan Tangherlini,
Administrator of General Services.

    For the reasons set forth in the preamble, 41 CFR Part 102-117 is 
amended as follows:

PART 102-117--TRANSPORTATION MANAGEMENT

0
1. The authority citation for 41 CFR Part 102-117 continues to read as 
follows:

    Authority: 31 U.S.C. 3726; 40 U.S.C. 121(c); 40 U.S.C. 501, et 
seq.; 46 U.S.C. 55305; 49 U.S.C. 40118.

0
2. Revise Sec.  102-117.15 to read as follows:


Sec.  102-117.15  To whom does this part apply?

    This part applies to all agencies and wholly-owned Government 
corporations as defined in 5 U.S.C. 101, et seq. and 31 U.S.C. 9101(3), 
except as otherwise expressly provided.

0
3. Revise Sec.  102-117.135 to read as follows:


Sec.  102-117.135  What are the international transportation 
restrictions?

    Several statutes mandate the use of U.S. flag carriers for 
international shipments, such as 49 U.S.C. 40118, commonly referred to 
as the ``Fly America Act'', and 46 U.S.C. 55305, the Cargo Preference 
Act of 1954, as amended. The principal restrictions are as follows:
    (a) Air cargo: The use of foreign-flag air carriers when funded by 
the U.S. Government should be rare. International movement of cargo by 
air is subject to the Fly America Act, 49 U.S.C. 40118, which requires 
the use of U.S. flag air carrier service for all air cargo movements 
funded by the U.S. Government, including cargo shipped by contractors, 
grantees, and others at Government expense, except when one of the 
following exceptions applies:
    (1) The transportation is provided under a bilateral or 
multilateral air transportation agreement to which the U.S. Government 
and the government of a foreign country are parties, and which the 
Department of Transportation has determined meets the requirements of 
the Fly America Act.
    (i) Information on bilateral or multilateral air transport 
agreements impacting U.S. Government procured transportation can be 
accessed at http://www.state.gov/e/eb/tra/ata/index.htm; and
    (ii) If determined appropriate, GSA may periodically issue FMR 
Bulletins providing further guidance on bilateral or multilateral air 
transportation agreements impacting U.S. Government procured 
transportation. These bulletins may be accessed at http://www.gsa.gov/bulletins;
    (2) When the costs of transportation are reimbursed in full by a 
third party, such as a foreign government, an

[[Page 33477]]

international agency, or other organization; or
    (3) Use of a foreign air carrier is determined to be a matter of 
necessity by your agency, on a case-by-case basis, when:
    (i) No U.S. flag air carrier can provide the specific air 
transportation needed;
    (ii) No U.S. flag air carrier can meet the time requirements in 
cases of emergency;
    (iii) There is a lack of or inadequate U.S. flag air carrier 
aircraft;
    (iv) There is an unreasonable risk to safety when using a U.S. flag 
carrier aircraft (e.g., terrorist threats). Written approval of the use 
of foreign air carrier service based on an unreasonable risk to safety 
must be approved by your agency on a case-by-case basis and must be 
supported by a travel advisory notice issued by the Federal Aviation 
Administration, Department of State, or the Transportation Security 
Administration; or
    (v) No U.S. flag air carrier can accomplish the agency's mission.
    (b) Ocean cargo: International movement of property by water is 
subject to the Cargo Preference Act of 1954, as amended, 46 U.S.C. 
55305, and the implementing regulations found at 46 CFR Part 381, which 
require the use of a U.S. flag carrier for 50% of the tonnage shipped 
by each Department or Agency when service is available. The Maritime 
Administration (MARAD) monitors agency compliance with these laws. All 
Departments or Agencies shipping Government-impelled cargo must comply 
with the provisions of 46 CFR 381.3. For further information contact 
MARAD, Tel: 1-800-996-2723, Email: [email protected]. For further 
information on international ocean shipping, go to: http://www.marad.dot.gov/cargopreference.

[FR Doc. 2014-13652 Filed 6-10-14; 8:45 am]
BILLING CODE 6820-14-P