[Federal Register Volume 63, Number 158 (Monday, August 17, 1998)]
[Notices]
[Pages 43984-43985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22127]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration


Voluntary Intermodal Sealift Agreement (VISA)

AGENCY: Maritime Administration, DOT.

ACTION: Notice of Open Season For Enrollment in Fiscal Year (FY) 1999 
VISA Program.

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Introduction

    The VISA program was established pursuant to section 708 of the 
Defense Production Act of 1950, as amended, which provides for 
voluntary agreements for emergency preparedness programs. After review 
of a one-year prototype, VISA was approved January 30, 1997, and 
published in the Federal Register on February 13, 1997 (62 FR 6837). As 
implemented, VISA is open to U.S.-Flag Vessel Operators of militarily 
useful vessels, including bareboat charter operators if satisfactory 
signed agreements are in place committing the assets of the owner to 
the bareboat charterer for purposes of VISA. By order of the Maritime 
Administrator on August 4, 1997, participation of U.S.-flag deepwater 
tug/barge Operators in VISA was encouraged. Time, voyage, and space 
charterers are not considered U.S.-Flag Vessel Operators for purposes 
of VISA eligibility.
    Participation in VISA, as evidenced by a fully executed VISA 
Agreement with the Maritime Administration (MARAD), satisfies the 
requirement of section 653 of the Maritime Security Act of 1996 (P.L. 
104-239) for Maritime Security Program (MSP) participants to enter into 
an Emergency Preparedness Agreement with the Secretary of 
Transportation and to receive DoD peacetime contract award priority by 
participation in a Emergency Preparedness Program, approved by the 
Secretary of Defense (SECDEF).

VISA Concept

    The mission of VISA is to provide commercial sealift and intermodal 
shipping services and systems, including vessels, vessel space, 
intermodal equipment and related management services, to the Department 
of Defense (DoD), as necessary, to meet national defense contingency 
requirements or national emergencies.
    VISA provides for the staged, time-phased availability of 
participants' shipping services/systems to meet contingency 
requirements through prenegotiated contracts between the Government and 
participants. Such arrangements will be jointly planned with MARAD, 
USTRANSCOM, and participants in peacetime to allow effective and best 
valued use of commercial sealift capacity, to provide DoD assured 
contingency access, and to minimize commercial disruption, whenever 
possible.
    VISA Stages I and II provide for prenegotiated contracts between 
the DoD and participants to provide sealift capacity to meet all 
projected DoD contingency requirements. These contracts will be 
executed in accordance with approved DoD contracting methodologies. 
VISA Stage III will provide for additional capacity to the DoD when 
Stage I and II commitments or volunteered capacity are insufficient to 
meet contingency requirements, and adequate shipping services from non-
participants are not available through established DoD contracting 
practices or U.S. Government treaty agreements.

FY 1999 VISA Enrollment Open Season

    The purpose of this notice is to invite interested, qualified U.S.-
Flag Vessel Operators to participate in the VISA program for FY 1999 
(October 1, 1998 thru September 30, 1999). This is the first annual 
enrollment period since the commencement of VISA during which time 
participants have been enrolled in the program on an ad-hoc basis. This 
enrollment method was adequate during the early period of the program 
while the DoD VISA contracting process was under development. However, 
now that VISA has been fully integrated into DoD's priority for award 
of cargo to VISA participants, it is necessary to link the VISA 
enrollment cycle with DoD's peacetime cargo contracting cycle.
    Existing VISA participants and new applicants are required to 
enroll/re-enroll for the FY 1999 VISA program as described in this 
Notice. This alignment of VISA enrollment and eligibility for VISA 
priority will solidify the linkage between commitment of contingency 
assets by VISA participants and receiving VISA priority consideration 
for award of FY 1999 DoD peacetime cargo.
    It is the only planned enrollment period for carriers to join VISA 
and derive benefits for DoD peacetime contracts during FY 1999. The 
only exception to this open season period for VISA enrollment will be 
for a non-VISA carrier that reflags a vessel into U.S. registry. That 
carrier may join VISA upon completion of reflagging at any time during 
the fiscal year.

Advantages of Peacetime Participation

    Because enrollment of carriers in VISA provides the DoD with 
assured access to sealift services during contingencies based on a 
level of commitment, as well as a mechanism for joint planning, the DoD 
awards peacetime cargo contracts to VISA participants on a priority 
basis. This applies to liner trades and charter contracts alike. Award 
of DoD cargoes to meet DoD peacetime and contingency requirements is 
made on the basis of the following priorities:
     U.S.-flag vessel capacity operated by VISA participants, 
and U.S.-flag Vessel Sharing Agreement (VSA) capacity held by VISA 
participants.
     U.S.-flag vessel capacity operated by non-participants.
     Combination U.S.-flag/foreign-flag vessel capacity 
operated by VISA participants, and combination U.S.-flag/foreign-flag 
VSA capacity held by VISA participants.
     Combination U.S.-flag/foreign-flag vessel capacity 
operated by non-participants.
     U.S.-owned or operated foreign-flag vessel capacity and 
VSA capacity held by VISA participants.
     U.S.-owned or operated foreign-flag vessel capacity and 
VSA capacity held by non-participants.
     Foreign-owned or operated foreign-flag vessel capacity of 
non-participants.

[[Page 43985]]

Participants

    Any U.S.-Flag Vessel Operator organized under the laws of a state 
of the United States, or the District of Columbia, who is able and 
willing to commit militarily useful sealift assets and assume the 
related consequential risks of commercial disruption, may be eligible 
to participate in the VISA program. While vessel brokers and agents 
play an important role as a conduit to locate and secure appropriate 
vessels for the carriage of DoD cargo, they may not become participants 
in the VISA program due to lack of requisite vessel ownership or 
operation. Brokers and agents should encourage the carriers they 
represent, however, to join the program.

Commitment

    Any U.S.-Flag Vessel Operator desiring to receive preference in the 
award of DoD peacetime contracts must commit no less than 50 percent of 
its total U.S.-flag militarily useful capacity in Stage III of the VISA 
program. A participant desiring to bid on DoD peacetime contracts will 
be required to provide commitment levels to meet DoD-established Stage 
I and/or II minimum percentages of the participant's military useful, 
oceangoing U.S-flag fleet capacity on an annual basis. The United 
States Transportation Command (USTRANSCOM) and MARAD will coordinate to 
ensure that the amount of sealift assets committed to Stages I and II 
will not have an adverse national economic impact. To minimize domestic 
commercial disruption, participants operating vessels in the domestic 
Jones Act trades are not required to commit the capacity of those U.S. 
domestic trading vessels to VISA Stages I and II. Overall VISA 
commitment requirements are based on annual enrollment.
    In order to protect a U.S.-Flag Vessel Operator's market share 
during contingency activation, VISA allows participants to join with 
other vessel operators in Carrier Coordination Agreements (CCA's) to 
satisfy commercial or DoD requirements. VISA provides a defense against 
antitrust laws in accordance with section 708 of the Defense Production 
Act of 1950. CCA's must be submitted to MARAD for coordination with the 
Department of Justice for approval, before they can be utilized.

Compensation

    In addition to receiving priority in the award of DoD peacetime 
cargo, compensation during contingency activation provides multiple 
methodologies that each participant may choose during enrollment which 
are commensurate with risk and service provided. The rate methodology 
determinations for liners and charters are undergoing development, but 
will be available for use at the commencement of the FY 1999 VISA 
participation period.

Enrollment

    Immediately following publication of this Notice, current VISA 
participants will receive a re-enrollment package from the Director, 
Office of Sealift Support, which will also include VISA Stage III 
capacity calculation worksheets to review and approve. These documents 
must be returned to MARAD no later than August 31, 1998, to allow 
processing time for the October 1, 1998, commencement date of the FY 
1999 VISA participation period.
    New applicants may enroll by obtaining a VISA application package 
from the Director, Office of Sealift Support. The application package 
will include the February 13, 1997 VISA Agreement, instructions for 
completing and submitting the application, blank VISA Application 
forms, and a request for information regarding the operations and U.S. 
citizenship of the applicant in order to assist MARAD in making a 
determination of the applicant's eligibility. An applicant must be able 
to provide an affidavit that demonstrates that it is at least a citizen 
of the United States, for purposes of vessel documentation, within the 
meaning of 46 U.S.C., section 12102, and that it owns, or bareboat 
charters and controls, oceangoing, militarily useful vessel(s) for 
purposes of committing assets to VISA. New VISA applicants must return 
completed FY 1999 VISA application documents to MARAD not later than 
August 31, 1998. Once MARAD has reviewed the application and determined 
VISA eligibility, MARAD will sign the VISA application document which 
completes the eligibility phase of the VISA enrollment process; 
however, the applicant is not yet a VISA participant, due to the 
remaining requirement to enter into contingency contracts with DoD.
    For the FY 1999 VISA open season, and prior to being re-enrolled in 
VISA, all current VISA participants and eligible new VISA applicants 
will be required to execute a joint Voluntary Enrollment Contract (VEC) 
with the DoD [Military Traffic Management Command (MTMC) and Military 
Sealift Command (MSC)] which will specify the participant's Stage III 
commitment for FY 1999. Once the VEC is completed, the applicant 
completes the DoD contracting process by executing a Drytime 
Contingency Contract (DCC) with MSC (for Charter Operators) and/or as 
applicable, a VISA Contingency Contract (VCC) with MTMC (for Liner 
Operators). Once the DoD contingency contract(s) are completed, the 
Maritime Administrator will confirm the participant's enrollment/re-
enrollment by letter agreement, with a copy to all appropriate parties.

FOR ADDITIONAL INFORMATION AND APPLICATIONS CONTACT: Raymond Barberesi, 
Director, Office of Sealift Support, U.S. Maritime Administration, Room 
7307, 400 Seventh Street, SW., Washington, DC 20590. Telephone (202) 
366-2323. Fax (202) 493-2180. The full text of this Federal Register 
Notice and other information about the VISA can be found on MARAD's 
Internet Web Page at http://www.marad.dot.gov.

    By Order of the Maritime Administrator.

    Dated: August 13, 1998.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 98-22127 Filed 8-14-98; 8:45 am]
BILLING CODE 4910-81-P