[Federal Register Volume 79, Number 76 (Monday, April 21, 2014)]
[Rules and Regulations]
[Pages 22036-22041]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-08855]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 216, 247, and 252

RIN 0750-AH90


Defense Federal Acquisition Regulation Supplement: Clauses With 
Alternates--Transportation (DFARS Case 2012-D057)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to revise and update 
transportation-related clauses and their prescriptions to create basic 
and alternate clauses structured in a manner to facilitate use of 
automated contract writing systems. The rule also includes the full 
text of each alternate, rather than only showing the paragraphs that 
differ from the basic clause.

DATES: Effective April 21, 2014.

FOR FURTHER INFORMATION CONTACT: Annette Gray, telephone 571-372-6093.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published a proposed rule in the Federal Register at 78 FR 
48397 on August 8, 2013, to revise the presentation of DFARS part 247 
clauses with alternates and their prescriptions in the DFARS. One 
respondent

[[Page 22037]]

submitted a public comment in response to the proposed rule.

II. Discussion and Analysis

    DoD reviewed the public comment in the development of the final 
rule. A discussion of the comment is provided below.

A. Public Comment

    Comment: The respondent recommended revising the prescription for 
the proposed clause at 252.216-70XX (renumbered 252.216-7010 in the 
final rule) to include a statement that the clause applies to 
requirements-type contracts.
    Response: DoD reviewed and accepted the public comment in the 
development of the final rule. In the prescription at DFARS 216.506(d) 
for the clause at 252.216-7010, Requirements, (formerly DFARS 252.247-
7015, Requirements) the phrase ``when a requirements contract is 
contemplated'' is added.

B. Other Changes

    Minor editorial changes were made: (1) To standardize language used 
in the final rule for the clause prescriptions and prefaces in order to 
provide uniform arrangement in the regulations, and (2) in 252.247-
7023, to provide for consistent use of the term ``foreign-flag 
vessels'' in the clause.

III. 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, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
and is summarized as follows:
    This rule amends the Defense Federal Acquisition Regulation 
Supplement (DFARS) to revise and update transportation-related clauses 
and their prescriptions to create basic and alternate clauses 
structured in a manner to facilitate use of automated contract writing 
systems. The rule also includes the full text of each alternate, rather 
than only showing the paragraphs that differ from the basic clause.
    There will be an initial small impact on potential offerors, 
including small businesses, because this rule provides an unfamiliar 
format for provision/clause alternates in solicitations and contracts 
issued by DoD contracting activities. According to the Federal 
Procurement Data System, in Fiscal Year 2012, DoD made approximately 
270,000 contract awards (not including modification and orders) that 
exceeded the micro-purchase threshold, of which approximately 180,000 
(67%) were awarded to small businesses. It is unknown how many of these 
contracts were awarded that included an alternate to a DFARS provision 
or clause. Since similar changes are being made (by part number) to all 
DFARS prescriptions and clauses and these changes are not substantive, 
this rule is expected to result in a net savings for potential 
offerors, including small businesses, by increasing clarity.
    No comments were received from the public on the Regulatory 
Flexibility analysis. No comments were received from the Chief Counsel 
for Advocacy of the Small Business Administration.
    This rule does not add any new reporting, recordkeeping, or other 
compliance requirements. It should not result in any economic impact on 
small entities.
    There are no alternatives to this rule that would attain the stated 
objective of making the terms of clause alternates clearer and that 
will facilitate the use of automated contract writing systems.

V. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 212, 216, 247, and 252

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 216, 247, and 252 are amended as 
follows:

0
1. The authority citation for 48 CFR parts 212, 216, 247, and 252 
continues to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Amend section 212.301 by revising paragraph (f)(lxv) to read as 
follows:


212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

    (f) * * *
    (lxv) Use the basic or one of the alternates of the clause at 
252.247-7023, Transportation of Supplies by Sea, as prescribed in 
247.574(b), to comply with the Cargo Preference Act of 1904 (10 U.S.C. 
2631(a)).
    (A) Use the basic clause as prescribed in 247.574(b)(1).
    (B) Use the alternate I clause as prescribed in 247.574(b)(2).
    (C) Use the alternate II clause as prescribed in 247.574(b)(3).
* * * * *

PART 216--TYPES OF CONTRACTS

0
3. In 216.506, revise paragraph (d) to read as follows:


216.506  Solicitation provisions and contract clauses.

* * * * *
    (d) Use the basic or the alternate of the clause at 252.216-7010, 
Requirements, in lieu of the clause at FAR 52.216-21, Requirements, in 
solicitations and contracts when a requirements contract for the 
preparation of personal property for shipment or storage, or for the 
performance of intra-city or intra-area movement, is contemplated.
    (1) Use the basic clause if the acquisition does not involve a 
partial small business set-aside.
    (2) Use the alternate I clause if the acquisition involves a 
partial small business set-aside.
* * * * *

PART 247--TRANSPORTATION

0
4. Revise the section 247.271 heading to read as follows:


247.271  Contracts for the preparation of personal property for 
shipment or storage or for performance of intra-city or intra-area 
movement.

* * * * *
0
5. Amend section 247.271-3 by--
0
a. In the introductory text, removing ``and for performance of intra-
city or intra-area movement,'' and adding ``or for performance of 
intra-city or intra-area movement,'' in its place;
0
b. Revising paragraph (a);
0
c. Removing paragraph (j) and redesignating paragraphs (k) through (p) 
as paragraphs (j) through (o), respectively; and

[[Page 22038]]

0
d. Adding a new paragraph (p).
    The revision and addition read as follows:


247.271-3  Solicitation provisions, schedule formats, and contract 
clauses.

* * * * *
    (a) Use the basic or the alternate of the provision at 252.247-
7008, Evaluation of Bids.
    (1) Use the basic provision when there are no ``additional 
services'' items being added to the schedule.
    (2) Use the alternate I provision when adding ``additional 
services'' items to the schedule.
* * * * *
    (p) See the prescription at 216.506(d) requiring the use of 
252.216-7010, Requirements.

0
6. In 247.574, revise paragraph (b) to read as follows:


247.574  Solicitation provisions and contract clauses.

* * * * *
    (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.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
7. Add section 252.216-7010 to read as follows:


252.216-7010  Requirements.

    As prescribed in 216.506(d), use one of the following clauses:
    Basic. As prescribed at 216.506(d)(1), use the following clause.

REQUIREMENTS--BASIC (APR 2014)

    (a) This is a requirements contract for the supplies or services 
specified and effective for the period stated in the Schedule. The 
quantities of supplies or services specified in the Schedule are 
estimates only and are not purchased by this contract. Except as 
this contract may otherwise provide, if the Government's 
requirements do not result in orders in the quantities described as 
``estimated'' or ``maximum'' in the Schedule, that fact shall not 
constitute the basis for an equitable price adjustment.
    (b) Delivery or performance shall be made only as authorized by 
orders issued in accordance with the Ordering clause. Subject to any 
limitations in the Order Limitations clause or elsewhere in this 
contract, the Contractor shall furnish to the Government all 
supplies or services specified in the Schedule and called for by 
orders issued in accordance with the Ordering clause. The Government 
may issue orders requiring delivery to multiple destinations or 
performance at multiple locations.
    (c) Except as this contract otherwise provides, the Government 
shall order from the Contractor all the supplies or services 
specified in the Schedule that are required to be purchased by the 
Government activity or activities specified in the Schedule.
    (d) The Government is not required to purchase from the 
Contractor requirements in excess of any limit on total orders under 
this contract.
    (e) If the Government urgently requires delivery of any quantity 
of an item before the earliest date that delivery may be specified 
under this contract, and if the Contractor will not accept an order 
providing for the accelerated delivery, the Government may acquire 
the urgently required goods or services from another source.
    (f) Orders issued during the effective period of this contract 
and not completed within that time shall be completed by the 
Contractor within the time specified in the order. The rights and 
obligations of the Contractor and the Government for those orders 
shall be governed by the terms of this contract to the same extent 
as if completed during the effective period.


(End of clause)
    Alternate I. As prescribed in 216.506(d)(2), use the following 
clause, which uses a different paragraph (c) than the basic clause.

REQUIREMENTS--ALTERNATE I (APR 2014)

    (a) This is a requirements contract for the supplies or services 
specified and effective for the period stated in the Schedule. The 
quantities of supplies or services specified in the Schedule are 
estimates only and are not purchased by this contract. Except as 
this contract may otherwise provide, if the Government's 
requirements do not result in orders in the quantities described as 
``estimated'' or ``maximum'' in the Schedule, that fact shall not 
constitute the basis for an equitable price adjustment.
    (b) Delivery or performance shall be made only as authorized by 
orders issued in accordance with the Ordering clause. Subject to any 
limitations in the Order Limitations clause or elsewhere in this 
contract, the Contractor shall furnish to the Government all 
supplies or services specified in the Schedule and called for by 
orders issued in accordance with the Ordering clause. The Government 
may issue orders requiring delivery to multiple destinations or 
performance at multiple locations.
    (c) The Government's requirements for each item or subitem of 
supplies or services described in the Schedule are being purchased 
through one non-set-aside contract and one set-aside contract. 
Therefore, the Government shall order from each Contractor 
approximately one-half of the total supplies or services specified 
in the Schedule that are required to be purchased by the specified 
Government activity or activities. The Government may choose between 
the set-aside Contractor and the non-set-aside Contractor in placing 
any particular order. However, the Government shall allocate 
successive orders, in accordance with its delivery requirements, to 
maintain as close a ratio as is reasonably practicable between the 
total quantities ordered from the two Contractors.
    (d) The Government is not required to purchase from the 
Contractor requirements in excess of any limit on total orders under 
this contract.
    (e) If the Government urgently requires delivery of any quantity 
of an item before the earliest date that delivery may be specified 
under this contract, and if the Contractor will not accept an order 
providing for the accelerated delivery, the Government may acquire 
the urgently required goods or services from another source.
    (f) Orders issued during the effective period of this contract 
and not completed within that time shall be completed by the 
Contractor within the time specified in the order. The rights and 
obligations of the Contractor and the Government for those orders 
shall be governed by the terms of this contract to the same extent 
as if completed during the effective period.


(End of clause)

0
8. Amend section 252.247-7008 by--
0
a. Revising the introductory text, clause title and date; and
0
b. Revising Alternate I.
    The revisions read as follows:

[[Page 22039]]

252.247-7008  Evaluation of Bids.

    As prescribed in 247.271-3(a), use one of the following provisions:
    Basic. As prescribed at 247.271-3(a)(1), use the following 
provision.

EVALUATION OF BIDS--BASIC (APR 2014)

* * * * *
    Alternate I. As prescribed in 247.271-4(a)(2), use the following 
provision, which adds a paragraph (e) not included in the basic 
provision.

EVALUATION OF BIDS--ALTERNATE I (APR 2014)

    (a) The Government will evaluate bids on the basis of total 
aggregate price of all items within an area of performance under a 
given schedule.
    (1) An offeror must bid on all items within a specified area of 
performance for a given schedule. Failure to do so shall be cause 
for rejection of the bid for that area of performance of that 
Schedule. If there is to be no charge for an item, an entry such as 
``No Charge,'' or the letters ``N/C'' or ``0,'' must be made in the 
unit price column of the Schedule.
    (2) Any bid which stipulates minimum charges or graduated prices 
for any or all items shall be rejected for that area of performance 
within the Schedule.
    (b) In addition to other factors, the Contracting Officer will 
evaluate bids on the basis of advantages or disadvantages to the 
Government that might result from making more than one award 
(multiple awards).
    (1) In making this evaluation, the Contracting Officer will 
assume that the administrative cost to the Government for issuing 
and administering each contract awarded under this solicitation 
would be $500.
    (2) Individual awards will be for the items and combinations of 
items which result in the lowest aggregate cost to the Government, 
including the administrative costs in paragraph (b)(1).
    (c) When drayage is necessary for the accomplishment of any item 
in the bid schedule, the Offeror shall include in the unit price any 
costs for bridge or ferry tolls, road use charges or similar 
expenses.
    (d) Unless otherwise provided in this solicitation, the Offeror 
shall state prices in amounts per hundred pounds on gross or net 
weights, whichever is applicable. All charges shall be subject to, 
and payable on, the basis of 100 pounds minimum weight for 
unaccompanied baggage and a 500 pound minimum weight for household 
goods, net or gross weight, whichever is applicable.
    (e) Notwithstanding paragraph (a), when ``additional services'' 
are added to any schedule, such ``additional services'' items will 
not be considered in the evaluation of bids.


(End of provision)


252.247-7015  [Removed and Reserved]

0
9. Remove and reserve section 252.247-7015.
0
10. Amend section 252.247-7023 by--
0
a. Revising the introductory text, clause title and date;
0
b. In paragraph (a), removing the numerical paragraph designations of 
(1) through (7) for the definition paragraphs; and removing ``foreign 
flag vessel'' and adding ``foreign-flag vessel'' in its place.
0
c. In paragraph (d), removing ``for use of other than U.S.-flag 
vessels'' and adding ``for use of foreign-flag vessels'' in its place.
0
d. In paragraph (f) introductory text, removing ``The Contractor 
shall'' and adding ``If this contract exceeds the simplified 
acquisition threshold, the Contractor shall'' in its place; and in 
paragraphs (f)(3) and (4), removing ``non-U.S.-flag'' and adding 
``foreign-flag'' in its place
0
e. In paragraph (g), removing ``If the final invoice'' and adding ``If 
this contract exceeds the simplified acquisition threshold and the 
final invoice'' in its place; and removing ``non-U.S.-flag vessels'' 
and adding ``foreign-flag vessels'' in its place.
0
f. Revising Alternate I and Alternate II; and
0
g. Removing Alternate III.
    The revisions read as follows:


252.247-7023  Transportation of Supplies by Sea.

    As prescribed in 247.574(b), use one of the following clauses:
    Basic. As prescribed in 247.574(b)(1), use the following clause.

TRANSPORTATION OF SUPPLIES BY SEA--BASIC (APR 2014)

* * * * *
    Alternate I. As prescribed in 247.574(b)(2), use the following 
clause, which uses a different paragraph (b) than the basic clause.

TRANSPORTATION OF SUPPLIES BY SEA--ALTERNATE I (APR 2014)

    (a) Definitions. As used in this clause--
    Components means articles, materials, and supplies incorporated 
directly into end products at any level of manufacture, fabrication, 
or assembly by the Contractor or any subcontractor.
    Department of Defense (DoD) means the Army, Navy, Air Force, 
Marine Corps, and defense agencies.
    Foreign-flag vessel means any vessel that is not a U.S.-flag 
vessel.
    Ocean transportation means any transportation aboard a ship, 
vessel, boat, barge, or ferry through international waters.
    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 all property, except land and interests in land, 
that is clearly identifiable for eventual use by or owned by the DoD 
at the time of transportation by sea.
    (i) An item is clearly identifiable for eventual use by the DoD 
if, for example, the contract documentation contains a reference to 
a DoD contract number or a military destination.
    (ii) Supplies includes (but is not limited to) public works; 
buildings and facilities; ships; floating equipment and vessels of 
every character, type, and description, with parts, subassemblies, 
accessories, and equipment; machine tools; material; equipment; 
stores of all kinds; end items; construction materials; and 
components of the foregoing.
    U.S.-flag vessel means a vessel of the United States or 
belonging to the United States, including any vessel registered or 
having national status under the laws of the United States.
    (b)(1) The Contractor shall use U.S.-flag vessels when 
transporting any supplies by sea under this contract.
    (2) A subcontractor transporting supplies by sea under this 
contract shall use U.S.-flag vessels if the supplies being 
transported are--
    (i) Noncommercial items; or
    (ii) Commercial items that--
    (A) The Contractor is reselling or distributing to the 
Government without adding value (generally, the Contractor does not 
add value to items that it subcontracts for f.o.b. destination 
shipment);
    (B) Are shipped in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations (Note: This contract requires shipment of 
commercial items in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations); or
    (C) Are commissary or exchange cargoes transported outside of 
the Defense Transportation System in accordance with 10 U.S.C. 2643.
    (c) The Contractor and its subcontractors may request that the 
Contracting Officer authorize shipment in foreign-flag vessels, or 
designate available U.S.-flag vessels, if the Contractor or a 
subcontractor believes that--
    (1) U.S.-flag vessels are not available for timely shipment;
    (2) The freight charges are inordinately excessive or 
unreasonable; or
    (3) Freight charges are higher than charges to private persons 
for transportation of like goods.
    (d) The Contractor must submit any request for use of foreign-
flag vessels in writing to the Contracting Officer at least 45 days 
prior to the sailing date necessary to meet its delivery schedules. 
The Contracting Officer will process requests submitted after such 
date(s) as expeditiously as possible, but the Contracting Officer's 
failure to grant approvals to meet the shipper's sailing date will 
not of itself constitute a compensable delay under this or any other 
clause of this contract. Requests shall contain at a minimum--
    (1) Type, weight, and cube of cargo;
    (2) Required shipping date;
    (3) Special handling and discharge requirements;

[[Page 22040]]

    (4) Loading and discharge points;
    (5) Name of shipper and consignee;
    (6) Prime contract number; and
    (7) A documented description of 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 
telephone notes, telegraphic and facsimile message or letters will 
be sufficient for this purpose.
    (e) The Contractor shall, within 30 days after each shipment 
covered by this clause, provide the Contracting Officer and the 
Maritime Administration, Office of Cargo Preference, U.S. Department 
of Transportation, 400 Seventh Street SW., Washington, DC 20590, one 
copy of the rated on board vessel operating carrier's ocean bill of 
lading, which shall contain the following information:
    (1) Prime contract number;
    (2) Name of vessel;
    (3) Vessel flag of registry;
    (4) Date of loading;
    (5) Port of loading;
    (6) Port of final discharge;
    (7) Description of commodity;
    (8) Gross weight in pounds and cubic feet if available;
    (9) Total ocean freight in U.S. dollars; and
    (10) Name of steamship company.
    (f) If this contract exceeds the simplified acquisition 
threshold, the Contractor shall provide with its final invoice under 
this contract a representation that to the best of its knowledge and 
belief--
    (1) No ocean transportation was used in the performance of this 
contract;
    (2) Ocean transportation was used and only U.S.-flag vessels 
were used for all ocean shipments under the contract;
    (3) Ocean transportation was used, and the Contractor had the 
written consent of the Contracting Officer for all foreign-flag 
ocean transportation; or
    (4) Ocean transportation was used and some or all of the 
shipments were made on foreign-flag vessels without the written 
consent of the Contracting Officer. The Contractor shall describe 
these shipments in the following format:

----------------------------------------------------------------------------------------------------------------
                                           Item description       Contract line items            Quantity
----------------------------------------------------------------------------------------------------------------
 
    TOTAL............................
----------------------------------------------------------------------------------------------------------------

    (g) If this contract exceeds the simplified acquisition 
threshold and the final invoice does not include the required 
representation, the Government will reject and return it to the 
Contractor as an improper invoice for the purposes of the Prompt 
Payment clause of this contract. In the event there has been 
unauthorized use of foreign-flag vessels in the performance of this 
contract, the Contracting Officer is entitled to equitably adjust 
the contract, based on the unauthorized use.
    (h) In the award of subcontracts for the types of supplies 
described in paragraph (b)(2) of this clause, including subcontracts 
for commercial items, the Contractor shall flow down the 
requirements of this clause as follows:
    (1) The Contractor shall insert the substance of this clause, 
including this paragraph (h), in subcontracts that exceed the 
simplified acquisition threshold in part 2 of the Federal 
Acquisition Regulation.
    (2) The Contractor shall insert the substance of paragraphs (a) 
through (e) of this clause, and this paragraph (h), in subcontracts 
that are at or below the simplified acquisition threshold in part 2 
of the Federal Acquisition Regulation.


(End of clause)
    Alternate II. As prescribed in 247.574(b)(3), use the following 
clause, which uses a different paragraph (b) than the basic clause.

TRANSPORTATION OF SUPPLIES BY SEA--ALTERNATE II (APR 2014)

    (a) Definitions. As used in this clause--
    Components means articles, materials, and supplies incorporated 
directly into end products at any level of manufacture, fabrication, 
or assembly by the Contractor or any subcontractor.
    Department of Defense (DoD) means the Army, Navy, Air Force, 
Marine Corps, and defense agencies.
    Foreign-flag vessel means any vessel that is not a U.S.-flag 
vessel.
    Ocean transportation means any transportation aboard a ship, 
vessel, boat, barge, or ferry through international waters.
    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 all property, except land and interests in land, 
that is clearly identifiable for eventual use by or owned by the DoD 
at the time of transportation by sea.
    (i) An item is clearly identifiable for eventual use by the DoD 
if, for example, the contract documentation contains a reference to 
a DoD contract number or a military destination.
    (ii) Supplies includes (but is not limited to) public works; 
buildings and facilities; ships; floating equipment and vessels of 
every character, type, and description, with parts, subassemblies, 
accessories, and equipment; machine tools; material; equipment; 
stores of all kinds; end items; construction materials; and 
components of the foregoing.
    U.S.-flag vessel means a vessel of the United States or 
belonging to the United States, including any vessel registered or 
having national status under the laws of the United States.
    (b)(1) The Contractor shall use U.S.-flag vessels when 
transporting any supplies by sea under this contract.
    (2) A subcontractor transporting supplies by sea under this 
contract shall use U.S.-flag vessels if the supplies being 
transported are--
    (i) Noncommercial items; or
    (ii) Commercial items that--
    (A) The Contractor is reselling or distributing to the 
Government without adding value (generally, the Contractor does not 
add value to items that it subcontracts for f.o.b. destination 
shipment);
    (B) Are shipped in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations; or
    (C) Are commissary or exchange cargoes transported outside of 
the Defense Transportation System in accordance with 10 U.S.C. 2643 
(Note: This contract requires transportation of commissary or 
exchange cargoes outside of the Defense Transportation System in 
accordance with 10 U.S.C. 2643).
    (c) The Contractor and its subcontractors may request that the 
Contracting Officer authorize shipment in foreign-flag vessels, or 
designate available U.S.-flag vessels, if the Contractor or a 
subcontractor believes that--
    (1) U.S.-flag vessels are not available for timely shipment;
    (2) The freight charges are inordinately excessive or 
unreasonable; or
    (3) Freight charges are higher than charges to private persons 
for transportation of like goods.
    (d) The Contractor must submit any request for use of foreign-
flag vessels in writing to the Contracting Officer at least 45 days 
prior to the sailing date necessary to meet its delivery schedules. 
The Contracting Officer will process requests submitted after such 
date(s) as expeditiously as possible, but the Contracting Officer's 
failure to grant approvals to meet the shipper's sailing date will 
not of itself constitute a compensable delay under this or any other 
clause of this contract. Requests shall contain at a minimum--
    (1) Type, weight, and cube of cargo;
    (2) Required shipping date;
    (3) Special handling and discharge requirements;
    (4) Loading and discharge points;
    (5) Name of shipper and consignee;
    (6) Prime contract number; and
    (7) A documented description of 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 
telephone notes, telegraphic and facsimile message or letters will 
be sufficient for this purpose.
    (e) The Contractor shall, within 30 days after each shipment 
covered by this clause, provide the Contracting Officer and the 
Maritime Administration, Office of Cargo Preference, U.S. Department 
of Transportation, 400 Seventh Street SW.,

[[Page 22041]]

Washington, DC 20590, one copy of the rated on board vessel 
operating carrier's ocean bill of lading, which shall contain the 
following information:
    (1) Prime contract number;
    (2) Name of vessel;
    (3) Vessel flag of registry;
    (4) Date of loading;
    (5) Port of loading;
    (6) Port of final discharge;
    (7) Description of commodity;
    (8) Gross weight in pounds and cubic feet if available;
    (9) Total ocean freight in U.S. dollars; and
    (10) Name of steamship company.
    (f) If this contract exceeds the simplified acquisition 
threshold, the Contractor shall provide with its final invoice under 
this contract a representation that to the best of its knowledge and 
belief--
    (1) No ocean transportation was used in the performance of this 
contract;
    (2) Ocean transportation was used and only U.S.-flag vessels 
were used for all ocean shipments under the contract;
    (3) Ocean transportation was used, and the Contractor had the 
written consent of the Contracting Officer for all foreign-flag 
ocean transportation; or
    (4) Ocean transportation was used and some or all of the 
shipments were made on foreign-flag vessels without the written 
consent of the Contracting Officer. The Contractor shall describe 
these shipments in the following format:

----------------------------------------------------------------------------------------------------------------
                                           Item description       Contract line items            Quantity
----------------------------------------------------------------------------------------------------------------
 
    TOTAL............................
----------------------------------------------------------------------------------------------------------------

    (g) If this contract exceeds the simplified acquisition 
threshold and the final invoice does not include the required 
representation, the Government will reject and return it to the 
Contractor as an improper invoice for the purposes of the Prompt 
Payment clause of this contract. In the event there has been 
unauthorized use of foreign-flag vessels in the performance of this 
contract, the Contracting Officer is entitled to equitably adjust 
the contract, based on the unauthorized use.
    (h) In the award of subcontracts for the types of supplies 
described in paragraph (b)(2) of this clause, including subcontracts 
for commercial items, the Contractor shall flow down the 
requirements of this clause as follows:
    (1) The Contractor shall insert the substance of this clause, 
including this paragraph (h), in subcontracts that exceed the 
simplified acquisition threshold in part 2 of the Federal 
Acquisition Regulation.
    (2) The Contractor shall insert the substance of paragraphs (a) 
through (e) of this clause, and this paragraph (h), in subcontracts 
that are at or below the simplified acquisition threshold in part 2 
of the Federal Acquisition Regulation.


(End of clause)

[FR Doc. 2014-08855 Filed 4-18-14; 8:45 am]
BILLING CODE 5001-06-P