[Federal Register: November 24, 2008 (Volume 73, Number 227)]
[Rules and Regulations]
[Page 70909-70912]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24no08-16]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212, 215, 247, and 252
RIN 0750-AF75
Defense Federal Acquisition Regulation Supplement; Carriage
Vessel Overhaul, Repair, and Maintenance (DFARS Case 2007-D001)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD has adopted as final, with changes, an interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to implement Section 1017 of the National Defense Authorization Act for
Fiscal Year 2007. Section 1017 requires DoD to establish an evaluation
criterion, for use in obtaining carriage of cargo by vessel, that
considers the extent to which an offeror has had overhaul, repair, and
maintenance work for covered vessels performed in shipyards located in
the United States or Guam.
DATES: Effective Date: November 24, 2008.
FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, Defense
Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139,
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-
0302; facsimile 703-602-7887. Please cite DFARS Case 2007-D001.
SUPPLEMENTARY INFORMATION:
A. Background
DoD published an interim rule at 72 FR 49204 on August 28, 2007, to
implement Section 1017 of the National Defense Authorization Act for
Fiscal Year 2007 (Pub. L. 109-364). Section 1017 requires DoD to issue
an acquisition policy that establishes, as a criterion required to be
considered in obtaining carriage of cargo by vessel for DoD, the extent
to which an offeror of such carriage has had overhaul, repair, and
maintenance work for covered vessels performed in shipyards located in
the United States or Guam.
Nine sources submitted comments on the interim rule. A discussion
of the comments is provided below.
1. Comment: Some respondents took exception to the rule's use of
the term ``evaluation factor or subfactor'' with regard to
consideration of the amount of work an offeror has performed in U.S.
shipyards. The respondents suggested
[[Page 70910]]
this evaluation criterion should be established as a significant factor
in evaluation of offers.
DoD Response: The text at DFARS 247.573-2(c) has been revised to
replace the term ``evaluation factor or subfactor'' with ``evaluation
criterion,'' consistent with the language in Section 1017(a) of Public
Law 109-364. The decision as to the relative value of the evaluation
criterion is appropriately the responsibility of the source selection
authority.
2. Comment: Some respondents expressed concern that the rule does
not specifically state that the term ``covered vessels'' includes all
covered vessels in an offeror's fleet. Other respondents suggested a
more strict definition of ``covered vessels,'' which would be
applicable only to the vessels the offeror is proposing to use in the
procurement under evaluation.
DoD Response: The definition of ``covered vessel'' in the provision
at 252.247-7026 is consistent with Section 1017(b) of Public Law 109-
364. DoD interprets this definition to include all covered vessels in
an offeror's fleet, and not just those offered under a specific
solicitation. The text at DFARS 247.573-2(c)(3) has been amended to
clarify this point.
3. Comment: One respondent recommended that the rule clarify that
the evaluation preference would apply only in the case where DoD is
soliciting offers for vessel carriage of its cargo in the coastwise or
noncontiguous trade, not in other trades. Further, the respondent
recommended that rule define the term ``coastwise or noncontiguous
trade.'' The respondent suggested that this would mean referring to a
voyage that meets the tests of: former Section 27 of the Merchant
Marine Act, 1920; former 46 U.S.C. 12166; and former Section 2 of the
Shipping Act, 1916. Therefore, the preference would not apply to
carriage of cargo to a point that can be served by a vessel that has a
registry endorsement such as Guam, which is considered part of the non-
contiguous trade but is not a Jones Act trade.
DoD Response: The final rule clarifies that the evaluation
preference applies only to solicitations requiring a covered vessel.
Further, DoD agrees that the preference would not apply to carriage of
cargo to a point that can be served by a vessel that has a registry
endorsement, such as Guam. Vessels with a registry endorsement provided
for under Section 12111 (formerly Section 12105) of Title 46 of the
United States Code are not covered vessels. The final rule does not
include a definition of ``coastwise or noncontiguous trade,'' as this
term is already covered under Section 27 of the Merchant Marine Act,
which is referenced in the definition of ``covered vessel'' in the
provision at 252.247-7026.
4. Comment: One respondent suggested revising the statutory
references in the definition of ``covered vessel'' to reflect the
recodification of Title 46 of the United States Code on October 6,
2006.
DoD Response: DoD has revised the definition of ``covered vessel''
to reflect the current statutory references.
5. Comment: Some respondents stated that the 15-day work period
within the definition of ``overhaul, repair, and maintenance work'' at
252.247-7026 was too long, while another respondent opposed any
shortening of this time period.
DoD Response: DoD intended the definition to represent meaningful
work, such as annual, regulatory, and scheduled overhaul, repair, and
maintenance. Based on comments received regarding the length of time
required for typical repairs, DoD has revised the time period for work
categorized as ``overhaul, repair, and maintenance'' from 15 to 5
calendar days.
6. Comment: Some respondents recommended the definition of
``shipyard'' be changed to include ship repair facilities as well as
ship building facilities. One respondent stated that the scope and
nature of the overhaul, repair, and maintenance work, and not whether
the work is performed in a shipyard that is capable of building a ship,
should be considered in the evaluation criteria. Another respondent
stated that, since the rule defines ``shipyard'' as a facility capable
of building a ship, the size of ship a shipyard must be capable of
building should be included within the definition.
DoD Response: DoD agrees that ``shipyard,'' as used within this
DFARS rule, should be defined as a facility capable of performing
overhaul, repair, and maintenance work, and the definition has been
revised accordingly. Additionally, the definition of ``overhaul,
repair, and maintenance work'' has been revised to remove the word
``pierside'' as a qualifier for the term ``shipyard.''
7. Comment: One respondent suggested adding a definition of
``foreign shipyard,'' to be defined as ``any shipyard that is not
located in the United States.''
DoD Response: DoD has added definitions of ``U.S. shipyard'' and
``foreign shipyard,'' consistent with the definitions in Section 1017
of Public Law 109-364.
8. Comment: One respondent recommended that the rule be clarified
such that the overhaul, repair, and maintenance reports required by the
rule cover work performed at any shipyard, anywhere in the world.
DoD Response: The reporting requirement at DFARS 252.247-7026(c)
has been revised to address work performed both in U.S. and foreign
shipyards.
9. Comment: Some respondents suggested that the evaluation
criterion be qualified such that certain foreign shipyard repairs would
not receive adverse consideration under specific situations. One
respondent suggested that repairs in foreign shipyards, due to
accident, emergency, Act of God, or an infirmity to the vessel, should
not receive adverse consideration in the evaluation criterion regarding
the amount of work performed in U.S. shipyards, if it is determined
that safety considerations warranted taking the vessel to the nearest
shipyard. Two respondents suggested that foreign shipyard repairs
should not receive adverse consideration due to non-availability of
U.S. shipyards if an offeror can demonstrate that it contacted U.S.
shipyards seeking a berth for a repair and was told that space was not
available on a timely basis. One respondent suggested that the
criterion should specifically recognize that U.S. vessels that do not
call at a U.S. port for two years or more should not be adversely
affected by the failure to have routine shipyard work performed at U.S.
shipyards.
DoD Response: DoD recognizes that overhaul, repair, and maintenance
work required due to an emergency situation or direction from the U.S.
Government should not adversely affect an evaluation. Therefore, the
final rule excludes repairs of this type from the evaluation criterion.
All other foreign overhaul, repair, and maintenance work will be
considered under the evaluation criterion, consistent with the
statutory intent of maintaining the national defense industrial base.
10. Comment: One respondent suggested that a case could be made
that facilities covered by NAFTA are effectively less foreign than
facilities not covered by NAFTA.
DoD Response: The statute makes no provisions for evaluation
consideration for overhaul, repair, and maintenance work performed at
facilities covered by NAFTA.
11. Comment: Two respondents opposed the time period for reporting
overhaul, repair, and maintenance work (current calendar year and four
previous
[[Page 70911]]
calendar years), while one respondent stated support for this time
period.
DoD Response: The time period in the rule is considered
appropriate, as it captures a complete maintenance and repair cycle for
Coast Guard inspected ships.
12. Comment: Two respondents suggested the evaluation criterion
should consider not only overhaul, repair, and maintenance work, but
also new construction.
DoD Response: The statute makes no provisions for new construction.
The Jones Act provides an incentive for new construction in U.S.
shipyards. In addition, the redefinition of ``shipyard'' as ``a
facility capable of performing overhaul, repair, and maintenance work
on covered vessels'' in the final rule broadens the scope of shipyard
repair facilities.
13. Comment: One respondent stated that the rule does not extend
far enough to offer true support and reward for carriers that have
environmentally sound practices and provisions of efficient services.
DoD Response: The scope of this rule is limited to implementation
of Section 1017 of Public Law 109-364.
14. Comment: One respondent suggested a broader definition of
``ship'' that would include non-self-propelled vessels.
DoD Response: The rule refers to ``covered vessels'' rather than
``ship''. The rule's definition of ``covered vessel'' is consistent
with Section 1017(b) of Public Law 109-364.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD has prepared a final regulatory flexibility analysis consistent
with 5 U.S.C. 604. A copy of the analysis may be obtained from the
point of contact specified herein. The analysis is summarized as
follows:
The objective of the rule is to maintain a strong national ship
repair industrial base. Therefore, the rule provides an evaluation
preference for use in DoD solicitations for carriage of cargo by
vessel, to apply to those entities that use domestic shipyards for
vessel overhaul, repair, and maintenance. The rule is expected to have
a positive effect on entities owning domestic shipyards, by encouraging
the use of those shipyards. DoD will use the information required by
the solicitation provision to evaluate offers and to prepare annual
reports to Congress, as required by Section 1017 of Public Law 109-364.
C. Paperwork Reduction Act
The Office of Management and Budget has approved the information
collection requirements of this rule under Control Number 0704-0445.
List of Subjects in 48 CFR Parts 212, 215, 247, and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
0
Accordingly, the interim rule amending 48 CFR Parts 212, 215, 247, and
252, which was published at 72 FR 49204 on August 28, 2007, is adopted
as a final rule with the following changes:
0
1. The authority citation for 48 CFR Parts 212, 215, 247, and 252
continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 247--TRANSPORTATION
0
2. Section 247.570 is amended by revising paragraph (a)(2) to read as
follows:
247.570 Scope.
* * * * *
(a) * * *
(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;
* * * * *
0
3. Section 247.571 is revised to read as follows:
247.571 Definitions.
Covered vessel, foreign shipyard, overhaul, repair, and maintenance
work, and shipyard, as used in this subpart, 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.
0
4. Section 247.572 is amended by revising paragraph (d)(1) to read as
follows:
247.572 Policy.
* * * * *
(d) * * *
(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
* * * * *
0
5. Section 247.573-2 is amended as follows:
0
a. By revising paragraphs (c)(2) and (3); and
0
b. In paragraph (d)(3)(i) introductory text and paragraph (d)(3)(i)(C),
by removing ``247.573-1(d)'' and adding in its place ``247.573-1(c)''.
The revised text reads as follows:
247.573-2 Direct purchase of ocean transportation services.
* * * * *
(c) * * *
(2) An evaluation criterion for offeror participation in the
Voluntary Intermodal Sealift Agreement; and
(3) An evaluation criterion considering the extent to which
offerors have had overhaul, repair, and maintenance work for all
covered vessels in an offeror's fleet performed in shipyards located in
the United States or Guam. Work performed in foreign shipyards shall
not be evaluated under this criterion if--
(i) Such work was performed as emergency repairs in foreign
shipyards due to accident, emergency, Act of God, or an infirmity to
the vessel, and safety considerations warranted taking the vessel to a
foreign shipyard; or
(ii) Such work was paid for or reimbursed by the U.S. Government.
* * * * *
0
6. Section 247.573-3 is amended by revising paragraphs (a)(1) and (b)
to read as follows:
247.573-3 Annual reporting requirement.
(a) * * *
(1) Prepare a report containing all information received from all
offerors in response to the provision at 252.247-7026 during the
previous calendar year; and
* * * * *
(b) The Director of Acquisition, U.S. Transportation Command, will
submit a consolidated annual report to the congressional defense
committees, by June 1st of each year, in accordance with Section 1017
of Public Law 109-364.
0
7. Section 247.574 is amended by revising paragraph (e) to read as
follows:
247.574 Solicitation provisions and contract clauses.
* * * * *
(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
[[Page 70912]]
Noncontiguous Trade, in solicitations that require a covered vessel for
carriage of cargo for DoD. See 247.573-3 for reporting of the
information received from offerors in response to the provision. See
247.573-2(c)(3) for the required evaluation criterion.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Section 252.247-7026 is amended by revising the clause date and
paragraphs (a) through (c) to 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.
* * * * *
EVALUATION PREFERENCE FOR USE OF DOMESTIC SHIPYARDS--APPLICABLE TO
ACQUISITION OF CARRIAGE BY VESSEL FOR DOD CARGO IN THE COASTWISE OR
NONCONTIGUOUS TRADE (NOV 2008)
(a) Definitions. As used in this provision--
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 Section 27 of the Merchant
Marine Act, 1920 (46 U.S.C. 12101, 12132, and 55102), commonly
referred to as ``Jones Act''; 46 U.S.C. 12102, 12112, and 12119; and
Section 2 of the Shipping Act, 1916 (46 U.S.C. 50501).
Foreign shipyard means a shipyard that is not a U.S. shipyard.
Overhaul, repair, and maintenance work means work requiring a
shipyard period greater than or equal to 5 calendar days.
Shipyard means a facility capable of performing overhaul,
repair, and maintenance work on covered vessels.
U.S. shipyard means a shipyard that is located in any State of
the United States or in Guam.
(b) This solicitation includes an evaluation criterion that
considers the extent to which the offeror has had overhaul, repair,
and maintenance work for covered vessels performed in U.S.
shipyards.
(c) The offeror shall provide the following information with its
offer, addressing all covered vessels for which overhaul, repair,
and maintenance work has been performed during the period covering
the current calendar year, up to the date of proposal submission,
and the preceding four calendar years:
(1) Name of vessel.
(2) Description and cost of qualifying shipyard work performed
in U.S. shipyards.
(3) Description and cost of qualifying shipyard work performed
in foreign shipyards and whether--
(i) Such work was performed as emergency repairs in foreign
shipyards due to accident, emergency, Act of God, or an infirmity to
the vessel, and safety considerations warranted taking the vessel to
a foreign shipyard; or
(ii) Such work was paid for or reimbursed by the U.S.
Government.
(4) Names of shipyards that performed the work.
(5) Inclusive dates of work performed.
* * * * *
[FR Doc. E8-27782 Filed 11-21-08; 8:45 am]
BILLING CODE 5001-08-P