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subpart 247.5--ocean transportation by u.s.-flag vessels

(Revised October 14, 2014)

 

 



 247.570 Scope.
 247.571 Definitions.
 247.572 Policy.
 247.573 General.
 247.574 Solicitation provisions and contract clauses.

 

247.570  Scope.

This subpart—

 

      (a)  Implements—

 

              (1)  The Cargo Preference Act of 1904 ("the 1904 Act"), 10 U.S.C. 2631, which applies to the ocean transportation of cargo owned by, or destined for use by, DoD;

 

              (2)  Section 1017 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364), which requires consideration, in solicitations requiring a covered vessel, of the extent to which offerors have had overhaul, repair, and maintenance work performed in shipyards located in the United States or Guam; and

 

              (3)  Section 3504 of the National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417), which addresses requirements that apply to riding gang members and DoD-exempted individuals (see 252.247-7027(c)) who perform work on U.S.-flag vessels under DoD contracts for transportation services documented under chapter 121, title 46 U.S.C.

 

      (b)  Does not specifically implement the Cargo Preference Act of 1954 ("the 1954 Act"), 46 U.S.C. 1241(b).  The 1954 Act is applicable to DoD, but DFARS coverage is not required because compliance with the 1904 Act historically has resulted in DoD exceeding the 1954 Act's requirements; and

 

      (c)  Does not apply to ocean transportation of the following products, in which case FAR Subpart 47.5 applies:

 

              (1)  Products obtained for contributions to foreign assistance programs.

 

              (2)  Products owned by agencies other than DoD, unless the products are clearly identifiable for eventual use by DoD.

 

247.571  Definitions.

As used in this subpart—

 

      (a)  “Components,” “foreign flag vessel,” “ocean transportation,” “supplies,” and “U.S.-flag vessel” have the meaning given in the clause at 252.247-7023, Transportation of Supplies by Sea.

 

      (b)  “Reflagging or repair work” has the meaning given in the clause at 252.247-7025, Reflagging or Repair Work.

 

      (c)  “Covered vessel,” “foreign shipyard,” “overhaul, repair, and maintenance work,” “shipyard,” and “U.S. shipyard” have the meaning given in the 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.

 

247.572  Policy.

 

      (a)  In accordance with 10 U.S.C. 2631(a), DoD contractors shall transport supplies, as defined in the clause at 252.247-7023, Transportation of Supplies by Sea, exclusively on U.S.-flag vessels unless—

 

              (1)  Those vessels are not available;

 

              (2)  The proposed charges to the Government are higher than charges to private persons for the transportation of like goods; or

 

              (3)  The proposed freight charges are excessive or unreasonable.

 

      (b)  Contracts must provide for the use of Government-owned vessels when security classifications prohibit the use of other than Government-owned vessels.

 

      (c)  In accordance with 10 U.S.C. 2631(b)—

 

              (1)  Any vessel used under a time charter contract for the transportation of supplies under this section shall have any reflagging or repair work, as defined in the clause at 252.247-7025, Reflagging or Repair Work, performed in the United States or its outlying areas, 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 the contract; and

 

                    (ii)  Prior to acceptance of the vessel by the Government.

 

              (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.

 

      (d)  In accordance with Section 1017 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364)—

 

              (1)  When obtaining carriage requiring a covered vessel, the contracting officer must 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; and

 

              (2)  DoD must submit an annual report to the congressional defense committees, addressing the information provided by offerors with regard to overhaul, repair, and maintenance for covered vessels performed 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 chapter 121 of title 46 U.S.C, unless the contract contains the clause at 252.247-7027.

 

247.573  General.

 

      (a)  Delegated authority. Pursuant to 10 U.S.C. 2631(a) and Secretary of Defense Memorandum dated February 7, 2012, (see PGI 247.573 (DFARS/PGI view)) the authority to make determinations of excessive ocean liner rates and excessive charter rates is delegated to—

 

              (1)  The Commander, United States Transportation Command, for excessive ocean liner rate determinations; and

 

              (2)  The Secretary of the Navy for excessive charter rate determinations.

 

      (b)  Procedures.

 

              (1)  Contracting officers shall follow the procedures at PGI 247.573(b)(1) (DFARS/PGI view) when purchase of ocean transportation services is incidental to a contract for supplies, services, or construction.

 

              (2)  Contracting officers shall follow the procedures at PGI 247.573(b)(2) (DFARS/PGI view) when direct purchase of ocean transportation services is the principal purpose of the contract.

 

              (3)  Agency and department procedures relating to annual reporting requirements of information received from offerors in response to solicitation provision 252.247-7026, Evaluation Preference for Use of Domestic Shipyards—Applicable to Acquisition of Carriage by Vessel for DoD Cargo in the Coastwise of Noncontiguous Trade, are found at PGI 247.573(b)(3) (DFARS/PGI view).

 

              (4)  Procedures are provided at PGI 247.573(b)(4) to accomplish security background checks pursuant to clause 252.247-7027, Riding Gang Member Requirements.

 

247.574  Solicitation provisions and contract clauses.

 

      (a)(1)  Use the provision at 252.247-7022, Representation of Extent of Transportation by Sea, in all solicitations, including solicitations using FAR part 12 procedures for the acquisition of commercial items, except—

 

                    (i)  Those for direct purchase of ocean transportation services; or

 

                    (ii)  Those with an anticipated value at or below the simplified acquisition threshold.

 

              (2)  If the solicitation includes the provision at FAR 52.204-7, do not separately list 252.247-7022 in the solicitation.

 

      (b)  Use the basic or one of the alternates of the clause at 252.247-7023, Transportation of Supplies by Sea, in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, except those for direct purchase of ocean transportation services.

 

              (1)  Use the basic clause unless any of the supplies to be transported are commercial items that are—

 

                    (i)  Shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations when the contract is not a construction contract; or

 

                    (ii)  Commissary or exchange cargoes transported outside of the Defense Transportation System when the contract is not a construction contract.

 

              (2)  Use the alternate I clause if any of the supplies to be transported are commercial items that are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations when the contract is not a construction contract.

 

              (3)  Use the alternate II clause if any of the supplies to be transported are commercial items that are commissary or exchange cargoes transported outside of the Defense Transportation System (10 U.S.C. 2643), when the contract is not a construction contract.

 

      (c)  Use the clause at 252.247-7024, Notification of Transportation of Supplies by Sea, in all contracts, including contracts using FAR part 12 procedures for the acquisition of commercial items, for which the offeror made a negative response to the inquiry in the provision at 252.247-7022, Representation of Extent of Transportation by Sea.

 

      (d)  Use the clause at 252.247-7025, Reflagging or Repair Work, in all time charter solicitations and contracts, including time charter solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, that are for the use of a vessel for the transportation of supplies, unless a waiver has been granted in accordance with 247.572(c)(2).

 

      (e)  Use the 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, in solicitations, including solicitations using FAR part 12 procedures for the acquisition of commercial items, that require a covered vessel for carriage of cargo for DoD.

 

      (f)  Use the clause at 252.247-7027, Riding Gang Member Requirements, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, that are for the charter of, or contract for carriage of cargo by, a U.S.-flag vessel documented under chapter 121 of title 46 U.S.C.


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