[Federal Register Volume 89, Number 81 (Thursday, April 25, 2024)]
[Proposed Rules]
[Pages 31681-31686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08436]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 242, 247, and 252

[Docket DARS-2024-0013]
RIN 0750-AL38


Defense Federal Acquisition Regulation Supplement: Preference for 
United States Vessels in Transporting Supplies by Sea (DFARS Case 2021-
D020)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement a section of the William M. 
(Mac) Thornberry National Defense Authorization Act for Fiscal Year 
2021 intended to increase compliance with military cargo preference 
requirements.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before June 24, 2024, to be considered in 
the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2021-D020, using 
either of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for DFARS Case 2021-D020. Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2021-
D020'' on any attached documents.
    [cir] Email: [email protected]. Include DFARS Case 2021-D020 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: David Johnson, telephone 202-913-5764.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to implement section 1024 of 
the William M. (Mac) Thornberry National Defense Authorization Act 
(NDAA) for Fiscal Year (FY) 2021 (Pub. L. 116-283). Section 1024 amends 
10 U.S.C. 2631 to,

[[Page 31682]]

among other things, clarify circumstances in which DoD may seek a 
waiver from the basic requirement for DoD supplies to be transported by 
sea in either vessels belonging to the United States or vessels of the 
United States. In particular, section 1024 specifies that DoD may waive 
this requirement, where such vessels are either not available at a fair 
and reasonable rate for commercial vessels of the United States or 
otherwise not available. Section 1024 also modifies the requirement for 
reflagging or repair work in the United States for vessels used under 
time charter contracts for the transportation of supplies, and it adds 
a requirement to ensure contractor compliance with 10 U.S.C. 2631.

II. Discussion and Analysis

    This proposed rule includes modifications at DFARS 247.572(a)(1) 
and the contract clause at 252.247-7023, Transportation of Supplies by 
Sea, including its alternates, to specify that DoD may waive the 
requirement for DoD supplies to be transported by sea in either vessels 
belonging to the United States or vessels of the United States. Under 
this proposed rule, waivers may be granted, where such vessels are 
either not available at a fair and reasonable rate for commercial 
vessels of the United States or otherwise not available.
    This proposed rule contains changes to DFARS 247.572(c) and the 
clause at 252.247-7025, Reflagging or Repair Work, to update 
requirements for reflagging or repair work in the United States for 
vessels used under time charter contracts for the transportation of 
supplies. This rule also includes modifications at DFARS 247.573(b) and 
DFARS 242.1502(g) to specify DoD procedures for increasing contractor 
compliance with the requirements of the clause at 252.247-7023, 
including its alternates.
    This proposed rule adds a definition of ``corrective and preventive 
maintenance or repair'' both to DFARS 247.571 and to the clause at 
252.247-7025. Further, this proposed rule updates the definitions of 
``foreign shipyard,'' ``ocean transportation,'' ``supplies'' and 
``U.S.-flag vessel'' at DFARS 247.571 and at the clause at 252.247-
7023, including its alternates, and the solicitation provision at 
252.247-7026, Evaluation Preference for Use of Domestic Shipyards--
Applicable to Acquisition of Carriage by Vessel for DoD Cargo in the 
Coastwise or Noncontiguous Trade. Additionally, this proposed rule 
deletes the definition of ``shipyard'' from the provision at 252.247-
7026 because the common definition of this term suffices for this rule. 
The definition of ``Department of Defense'' is deleted from the clause 
at 252.247-7023, including its alternates, because the definition of 
this term at DFARS 2.101 suffices for purposes of this proposed rule.
    This proposed rule clarifies the submission requirements in 
paragraph (d)(7) of the clause at 252.247-7023, including its 
alternates, where a contractor requests use of foreign-flag vessels.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT), for Commercial Products (Including Commercially 
Available Off-the-Shelf (COTS) Items), and for Commercial Services

    This proposed rule amends the clauses at DFARS 252.247-7023, 
including alternates, 252.247-7025, and the provision at 252.247-7026. 
However, this proposed rule does not impose any new requirements on 
contracts at or below the SAT, for commercial products including COTS 
items, or for commercial services. The clauses will continue to apply 
to acquisitions at or below the SAT, to acquisitions of commercial 
products including COTS items, and to acquisitions of commercial 
services.

IV. Expected Impact of the Rule

    This proposed rule is intended to increase compliance with military 
cargo preference requirements, in accordance with section 1024 of the 
NDAA for FY 2021. These changes are largely clarifying in nature, 
including clarification of operational requirements internal to DoD. 
Therefore, this proposed rule, when finalized, is not expected to have 
a significant impact on the public.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 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, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, as amended.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule, when finalized, 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 the rule does not create any new requirements or 
significantly change any existing requirements for contractors. 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:
    DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement section 1024 of the William 
M. (Mac) Thornberry National Defense Authorization Act (NDAA) for 
Fiscal Year (FY) 2021. Section 1024 modifies 10 U.S.C. 2631 to add a 
requirement to ensure contractor compliance with 10 U.S.C. 2631 and 
otherwise updates the listed circumstances in which DoD may waive the 
requirement that DoD supplies be transported by sea in vessels 
belonging to the United States or vessels of the United States. It also 
modifies the requirement for reflagging or repair work in the United 
States for vessels used under time-charter contracts.
    The objective of this rule is to implement section 1024 of the NDAA 
for FY 2021. Section 1024 is the legal basis for the rule.
    This proposed rule will apply to small entities that have contracts 
that include DFARS clauses 252.247-7023, Transportation of Supplies by 
Sea, and 252.247-7025, Reflagging or Repair Work. DoD obtained data 
from the Procurement Business Intelligence Service (PBIS) for all 
contracts and modifications that include DFARS clauses 252.247-7023 and 
252.247-7025 for fiscal years 2020 through 2022. DoD awarded on average 
649,016 contract actions per year that included either DFARS clause 
252.247-7023 or 252.247-7025, or both, to 31,665 unique entities, of 
which approximately 363,260 contract awards (56 percent) were made to 
21,737 unique small entities (69 percent).
    The proposed rule does not impose any new reporting, recordkeeping, 
or other compliance requirements.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    There are no known alternatives that would accomplish the stated 
objectives of the applicable statute.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this proposed rule on 
small entities.
    DoD will also consider comments from small entities concerning the

[[Page 31683]]

existing regulations in subparts affected by this proposed rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (DFARS Case 2021-
D020), in correspondence.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this 
proposed rule. However, these changes to the DFARS do not impose 
additional information collection requirements to the paperwork burden 
previously approved under OMB Control Number 0704-0245, titled: Defense 
Federal Acquisition Regulation Supplement (DFARS) Part 247, 
Transportation, and Related Clauses at 252.247.

List of Subjects in 48 CFR Parts 242, 247, and 252

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 242, 247, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for parts 242, 247, and 252 continue to read 
as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
2. Amend section 242.1502--
0
a. In paragraph (g)(i) by removing ``Program); and'' and adding 
``Program);'' in its place;
0
b. In paragraph (g)(ii) by removing ``(B)).'' and adding ``(B)); and'' 
in its place; and
0
c. By adding paragraph (g)(iii) to read as follows:


242.1502   Policy.

    (g) * * *
    (iii) In accordance with 10 U.S.C. 2631(d), shall include 
information on contractor compliance with requirements of the clause at 
252.247-7023, Transportation of Supplies by Sea (see 10 U.S.C. 2631(a), 
(b), and (c)).

PART 247--TRANSPORTATION

0
3. Amend section 247.570--
0
a. By revising paragraph (a)(1);
0
b. In paragraph (a)(2) by removing ``(Pub. L. 109-364)'' and adding 
``(Pub. L. 109-364) (10 U.S.C. 2631 note)'' in its place;
0
c. In paragraph (a)(3) by removing ``(Pub. L. 110-417)'' and ``chapter 
121, title 46 U.S.C.'' and adding ``(Pub. L. 110-417) (10 U.S.C. 
chapter 257 note)'' and ``46 U.S.C. chapter 121'' in their places, 
respectively;
0
d. By adding a new paragraph (a)(4).
0
e. In paragraph (b) by removing ``46 U.S.C. 1241(b)'' and adding ``46 
U.S.C. chapter 553'' in its place; and
0
f. By revising paragraph (c).
    The revisions read as follows:


247.570   Scope.

* * * * *
    (a) * * *
    (1) The Military Cargo Preference Act of 1904 (``the 1904 Act''), 
10 U.S.C. 2631, which applies to the ocean transportation of cargo 
owned by, destined for use by, or otherwise transported by DoD;
* * * * *
    (4) Section 1024 of the National Defense Authorization Act for 
Fiscal Year 2021 (Pub. L. 116-283), which updates the listed 
circumstances where DoD may waive the requirement that DoD supplies be 
transported by sea in vessels belonging to the United States or vessels 
of the United States, and it modifies the requirement for reflagging or 
repair work in the United States for vessels used under time-charter 
contracts.
* * * * *
    (c) Does not implement--
    (1) Section 27 of the Merchant Marine Act, 1920 (46 U.S.C. chapters 
121 and 552), commonly known as the ``Jones Act,'' for the application 
of coastwise trade; or
    (2) Waivers thereof pursuant to 46 U.S.C. 501.
0
4. Revise section 247.571 to read as follows:


247.571   Definitions.

    As used in this subpart--
    Corrective and preventive maintenance or repair means--
    (1) Maintenance or repair actions performed as a result of a 
failure in order to return or restore equipment to acceptable 
performance levels; and
    (2) Scheduled maintenance or repair actions to prevent or discover 
functional failures.
    Covered vessel means a vessel--
    (1) Owned, operated, or controlled by the offeror; and
    (2) Qualified to engage in the carriage of cargo in the coastwise 
or noncontiguous trade under 46 U.S.C. 12112 and 50501 and 46 U.S.C. 
chapter 551.
    Foreign-flag vessel means any vessel that is not a U.S.-flag 
vessel.
    Foreign shipyard means a shipyard that is not located in the United 
States.
    Ocean transportation means any water-borne transportation aboard a 
ship, vessel, boat, barge, ferry, or the like outside the internal 
waters of the United States (as defined in 33 CFR 2.24).
    Overhaul, repair, and maintenance work means work requiring a 
shipyard period greater than or equal to 5 calendar days.
    Reflagging or repair work means work performed on a vessel--
    (1) To enable the vessel to meet applicable standards to become a 
vessel of the United States; or
    (2) To convert the vessel to a more useful military configuration.
    Supplies means supplies that are clearly identifiable for eventual 
use by or owned by DoD at the time of transportation by sea, or are 
otherwise transported by DoD, regardless of ownership or use by DoD. An 
item is clearly identifiable for eventual use by DoD if, for example, 
the contract documentation contains a reference to a DoD contract 
number or a military destination.
    U.S.-flag vessel means either a vessel belonging to the United 
States or a vessel of the United States as that term is defined in 46 
U.S.C. 116.
0
5. Revise section 247.572 to read as follows:


247.572   Policy.

    (a) In accordance with 10 U.S.C. 2631(a), DoD contractors shall 
transport supplies exclusively on U.S.-flag vessels. In accordance with 
10 U.S.C. 2631(b), DoD (see 247.573(a)) may waive this requirement when 
a U.S.-flag vessel--
    (1) Is not available at a fair and reasonable rate for commercial 
vessels of the United States; or
    (2) Is not otherwise available.
    (b) Contracts must provide for the use of vessels belonging to the 
United States when security classifications prohibit the use of other 
than vessels belonging to the United States.
    (c) In accordance with 10 U.S.C. 2631(c)--
    (1) Any vessel used under a time charter contract for the 
transportation of supplies under this section shall have the following 
work performed in the United States or its outlying areas:
    (i) Reflagging or repair work, if the reflagging or repair work is 
performed--
    (A) On a vessel for which the contractor submitted an offer in 
response to the solicitation for the contract; and
    (B) Prior to acceptance of the vessel by the Government.
    (ii) Corrective and preventive maintenance or repair work for the 
duration of the contract, to the greatest extent practicable.

[[Page 31684]]

    (2) The Secretary of Defense may waive this requirement if the 
Secretary determines that such waiver is critical to the national 
security of the United States. In accordance with 10 U.S.C. 2631(c)(2), 
DoD shall immediately submit, in writing, a notice to the congressional 
committees listed at 10 U.S.C. 2631(e) of such a waiver and the reason 
for the waiver.
    (d) In accordance with section 1017 of the National Defense 
Authorization Act for Fiscal Year 2007 (Pub. L. 109-364), when 
obtaining carriage requiring a covered vessel, the contracting officer 
shall consider the extent to which offerors have had overhaul, repair, 
and maintenance work for covered vessels performed in shipyards located 
in the United States or Guam.
    (e) In accordance with section 3504 of the National Defense 
Authorization Act for Fiscal Year 2009 (Pub. L. 110-417), DoD may not 
award, renew or extend, or exercise an option under a charter of, or 
contract for carriage of cargo by, a U.S.-flag vessel documented under 
46 U.S.C. chapter 121, unless the contract contains the clause at 
252.247-7027.
0
6. Amend section 247.573--
0
a. By revising paragraph (a);
0
b. In paragraph (b)--
0
i. By revising paragraph (3);
0
ii. In paragraph (4) by removing ``Procedures are provided at'' and 
adding ``Follow the procedures at'' in its place; and
0
iii. By adding a new paragraph (5).
    The revisions and addition read as follows:


247.573   General.

    (a) Delegated authority. Pursuant to 10 U.S.C. 2631(b)(2), the 
Secretary of Defense has delegated (see PGI 247.573) the authority to 
make determinations either that a U.S.-flag vessel is not available at 
a fair and reasonable rate for commercial vessels of the United States 
or is otherwise not available to--
    (1) The Commander, United States Transportation Command; and
    (2) The Secretary of the Navy.
    (b) * * *
* * * * *
    (3) See PGI 247.573(b)(3) for agency and department procedures 
relating to annual reporting requirements of waivers granted for 
nonavailability of U.S.-flag vessels.
* * * * *
    (5)(i) In accordance with 10 U.S.C. 2631(d), contracting officers 
shall exercise appropriate contractual rights and remedies against 
contractors who fail to comply. Such remedies may include the 
determination that a contractor is ineligible for award of future 
contracts, termination of an existing contract, or suspension or 
debarment of the contractor. Also see 242.1502 regarding assessments of 
the contractor's past performance.
    (ii) In the event of a contractor's unauthorized use of foreign-
flag vessels in the performance of a contract, the contracting officer 
is authorized to consider an equitable adjustment.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
7. Amend section 252.247-7023--
0
a. Revising the date of the clause;
0
b. By revising paragraph (a);
0
c. By revising paragraph (c);
0
d. In paragraph (d) introductory text by revising the second sentence 
and paragraph (7);
0
e. In paragraph (e)(10) by removing ``the steamship company'' and 
adding ``the carrier'' in its place;
0
f. In paragraph (f)(3) by removing ``had the written consent of the 
Contracting Officer'' and adding ``had received a prior-approved waiver 
for U.S.-flag vessels'' in its place;
0
g. In paragraph (f)(4) by removing ``of the Contracting Officer'' and 
adding ``of DoD'' in its place;
0
h. Amend Alternate I--
0
i. Revising the date of the clause;
0
ii. By revising paragraph (a);
0
iii. By revising paragraph (c);
0
iv. In paragraph (d) introductory text by revising the second sentence 
and paragraph (7);
0
v. In paragraph (e)(10) by removing ``steamship company'' and adding 
``the carrier'' in its place;
0
vi. In paragraph (f)(3) by removing ``had the written consent of the 
Contracting Officer'' and adding ``had received a prior-approved waiver 
for U.S.-flag vessels'' in its place;
0
vii. In paragraph (f)(4) by removing ``of the Contracting Officer'' and 
adding ``of DoD'' in its place;
0
i. Amend Alternate II--
0
i. Revising the date of the clause;
0
ii. By revising paragraph (a);
0
iii. By revising paragraph (c);
0
iv. In paragraph (d) introductory text by revising the second sentence 
and paragraph (7);
0
v. In paragraph (e)(10) by removing ``steamship company'' and adding 
``the carrier'' in its place;
0
vi. In paragraph (f)(3) by removing ``had the written consent of the 
Contracting Officer'' and adding ``had received a prior-approved waiver 
for U.S.-flag vessels'' in its place; and
0
vii. In paragraph (f)(4) by removing ``of the Contracting Officer'' and 
adding ``of DoD'' in its place.
    The revisions read as follows:


252.247-7023   Transportation of Supplies by Sea.

* * * * *
Transportation of Supplies by Sea--Basic (Date)
    (a) Definitions. As used in this clause--
    Foreign-flag vessel means any vessel that is not a U.S.-flag 
vessel.
    Ocean transportation means any water-borne transportation aboard a 
ship, vessel, boat, barge, ferry, or the like outside the internal 
waters of the United States as defined in 33 CFR 2.24.
    Subcontractor means a supplier, materialman, distributor, or vendor 
at any level below the prime contractor whose contractual obligation to 
perform results from, or is conditioned upon, award of the prime 
contract and who is performing any part of the work or other 
requirement of the prime contract.
    Supplies means supplies that are clearly identifiable for eventual 
use by or owned by DoD at the time of transportation by sea, or are 
otherwise transported by DoD, regardless of ownership or use by DoD. An 
item is clearly identifiable for eventual use by DoD if, for example, 
the contract documentation contains a reference to a DoD contract 
number or a military destination.
    U.S.-flag vessel means either a vessel belonging to the United 
States or a vessel of the United States as that term is defined in 46 
U.S.C. 116.
* * * * *
    (c) The Contractor and its subcontractors may request, via the 
Contracting Officer, a waiver of the requirement to use a U.S.-flag 
vessel, or identification of any available U.S.-flag vessels, if the 
Contractor or a subcontractor sufficiently explains that--
    (1) U.S.-flag vessels are not available at a fair and reasonable 
rate for commercial vessels of the United States; or
    (2) U.S.-flag vessels are otherwise not available.
    (d) * * * The Contracting Officer will process requests submitted 
after such date(s) as expeditiously as possible, however, if a DoD 
waiver is not approved prior to the shipper's sailing date, this will 
not of itself constitute a compensable delay under this or any other 
clause of this contract. * * *
* * * * *
    (7) A documented description of current, diligent efforts made to 
secure U.S.-flag vessels, including points of contact (with names and 
telephone numbers) with at least two U.S.-flag

[[Page 31685]]

carriers contacted. Copies of quotes will suffice for this purpose. 
Copies of telephone notes, emails, and other relevant communications 
will otherwise be considered for this purpose.
* * * * *
Transportation of Supplies by Sea--Alternate I (Date)
    (a) Definitions. As used in this clause--
    Foreign-flag vessel means any vessel that is not a U.S.-flag 
vessel.
    Ocean transportation means any water-borne transportation aboard a 
ship, vessel, boat, barge, ferry, or the like outside the internal 
waters of the United States as defined in 33 CFR 2.24.
    Subcontractor means a supplier, materialman, distributor, or vendor 
at any level below the prime contractor whose contractual obligation to 
perform results from, or is conditioned upon, award of the prime 
contract and who is performing any part of the work or other 
requirement of the prime contract.
    Supplies means supplies that are clearly identifiable for eventual 
use by or owned by DoD at the time of transportation by sea, or are 
otherwise transported by DoD, regardless of ownership or use by DoD. An 
item is clearly identifiable for eventual use by DoD if, for example, 
the contract documentation contains a reference to a DoD contract 
number or a military destination.
    U.S.-flag vessel means either a vessel belonging to the United 
States or a vessel of the United States as that term is defined in 46 
U.S.C. 116.
* * * * *
    (c) The Contractor and its subcontractors may request, via the 
Contracting Officer, a waiver of the requirement to use a U.S.-flag 
vessel, or identification of any available U.S.-flag vessels, if the 
Contractor or a subcontractor sufficiently explains that--
    (1) U.S.-flag vessels are not available at a fair and reasonable 
rate for commercial vessels of the United States; or
    (2) U.S.-flag vessels are otherwise not available.
    (d) * * * The Contracting Officer will process requests submitted 
after such date(s) as expeditiously as possible, however, if a DoD 
waiver is not approved prior to the shipper's sailing date, this will 
not of itself constitute a compensable delay under this or any other 
clause of this contract. * * *
* * * * *
    (7) A documented description of current, diligent efforts made to 
secure U.S.-flag vessels, including points of contact (with names and 
telephone numbers) with at least two U.S.-flag carriers contacted. 
Copies of quotes will suffice for this purpose. Copies of telephone 
notes, emails, and other relevant communications will otherwise be 
considered for this purpose.
* * * * *
Transportation of Supplies By Sea--Alternate II (Date)
    (a) Definitions. As used in this clause--
    Foreign-flag vessel means any vessel that is not a U.S.-flag 
vessel.
    Ocean transportation means any water-borne transportation aboard a 
ship, vessel, boat, barge, ferry, or the like outside the internal 
waters of the United States as defined in 33 CFR 2.24.
    Subcontractor means a supplier, materialman, distributor, or vendor 
at any level below the prime contractor whose contractual obligation to 
perform results from, or is conditioned upon, award of the prime 
contract and who is performing any part of the work or other 
requirement of the prime contract.
    Supplies means supplies that are clearly identifiable for eventual 
use by or owned by DoD at the time of transportation by sea, or are 
otherwise transported by DoD, regardless of ownership or use by DoD. An 
item is clearly identifiable for eventual use by DoD if, for example, 
the contract documentation contains a reference to a DoD contract 
number or a military destination.
    U.S.-flag vessel means either a vessel belonging to the United 
States or a vessel of the United States as that term is defined in 46 
U.S.C. 116.
* * * * *
    (c) The Contractor and its subcontractors may request, via the 
Contracting Officer, a waiver of the requirement to use a U.S.-flag 
vessel, or identification of any available U.S.-flag vessels, if the 
Contractor or a subcontractor sufficiently explains that--
    (1) U.S.-flag vessels are not available at a fair and reasonable 
rate for commercial vessels of the United States; or
    (2) U.S.-flag vessels are otherwise not available.
    (d) * * * The Contracting Officer will process requests submitted 
after such date(s) as expeditiously as possible, however, if a DoD 
waiver is not approved prior to the shipper's sailing date, this will 
not of itself constitute a compensable delay under this or any other 
clause of this contract. * * *
    (7) A documented description of current, diligent efforts made to 
secure U.S.-flag vessels, including points of contact (with names and 
telephone numbers) with at least two U.S.-flag carriers contacted. 
Copies of quotes will suffice for this purpose. Copies of telephone 
notes, emails, and other relevant communications will otherwise be 
considered for this purpose.
* * * * *
0
8. Revise section 252.247-7025 to read as follows:


252.247-7025   Reflagging or Repair Work.

    As prescribed in 247.574(c), use the following clause:

Reflagging or Repair Work (Date)

    (a) Definitions. As used in this clause--
    Corrective and preventive maintenance or repair means--
    (1) Maintenance or repair actions performed as a result of a 
failure in order to return or restore equipment to acceptable 
performance levels; and
    (2) Scheduled maintenance or repair actions to prevent or 
discover functional failures.
    Reflagging or repair work means work performed on a vessel--
    (1) To enable the vessel to meet applicable standards to become 
a vessel of the United States; or
    (2) To convert the vessel to a more useful military 
configuration.
    (b) Requirement. Unless DoD waives this requirement, the 
Contractor shall ensure performance of the following in the United 
States or its outlying areas:
    (1) Reflagging or repair work, if the reflagging or repair work 
is performed--
    (i) On a vessel for which the Contractor submitted an offer in 
response to the solicitation for this contract; and
    (ii) Prior to acceptance of the vessel by the Government.
    (2) Corrective and preventive maintenance or repair work for the 
duration of the contract, to the greatest extent practicable.


(End of clause)

0
9. Amend section 252.247-7026--
0
a. By removing the provision date ``Nov 2008'' and adding ``Date'' in 
its place;
0
b. In paragraph (a) by revising the definitions of ``Covered vessel'' 
and ``Foreign shipyard'' and removing the definition of ``Shipyard'';
0
c. In paragraphs (b) and (c) by removing ``offeror'' and adding 
``Offeror'' in its place;
0
d. In paragraph (e) removing ``Section 1017 of Public Law 109-364'' and 
adding ``section 1017 of Public Law 109-364 (10 U.S.C. 2631 note)'' in 
its place.
    The revisions read as follows:


252.247-7026   Evaluation Preference for Use of Domestic Shipyards--
Applicable to Acquisition of Carriage by Vessel for DoD Cargo in the 
Coastwise or Noncontiguous Trade.

* * * * *

[[Page 31686]]

    (a) * * *
    Covered vessel means a vessel--
    (1) Owned, operated, or controlled by the offeror; and
    (2) Qualified to engage in the carriage of cargo in the coastwise 
or noncontiguous trade under 46 U.S.C. 12112 and 50501 and 46 U.S.C. 
chapter 551.
    Foreign shipyard means a shipyard that is not located in the United 
States.
* * * * *
[FR Doc. 2024-08436 Filed 4-24-24; 8:45 am]
BILLING CODE 6001-FR-P