Barry McVay's FEDERAL CONTRACTS DISPATCH
DATE: August 17, 2000
FROM: Barry McVay, CPCM
SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Transportation Acquisition Policy
SOURCE: Federal Register, August 17, 2000, Vol. 65, No. 160, page 50143
AGENCIES: Department of Defense (DOD)
ACTION: Final Rule
SYNOPSIS: DOD is amending DFARS Part 247, Transportation, and other related portions to revise DOD's policy pertaining to the acquisition of transportation, transportation-related services, and transportation in supply contracts, particularly to provide for the use of evaluation factors that address support for DOD readiness programs, such as the Civil Reserve Air Fleet (CRAF) and the Voluntary Intermodal Sealift Agreement (VISA).
EDITOR'S NOTE: For more on the proposed rule, see the January 13, 2000, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Transportation Acquisition Policy."
The January 18, 1998, memorandum from the Under Secretary of Defense (Acquisition and Technology) is available on the Internet at http://www.acq.osd.mil/log/tp/trans_programs/defense_trans_library/aqpol/aqpol.html.
EFFECTIVE DATE: August 17, 2000.
FOR FURTHER INFORMATION CONTACT: Amy Williams, Defense Acquisition Regulations Council, OUSD(AT&L)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0288; fax: 703-602-0350. Cite DFARS Case 99-D009 in all correspondence related to this rule.
SUPPLEMENTAL INFORMATION: On January 15, 1998, Under Secretary of Defense (Acquisition and Technology) Jacques Gansler issued a memorandum forwarding revised "Transportation Acquisition Policy". It stated that DOD policy is that "the acquisition of all transportation and related services shall fulfill customer intermodal movement requirements from origin to destination. The acquisition of all transportation and related services shall be accomplished using best commercial practices and 'best value' evaluation procedures, and shall include performance-based specifications, as applicable. When appropriate, these specifications may include incentives to encourage commercial entities to exceed performance criteria."
On January 13, 2000, DOD published a proposed revision to the DFARS to implement the January 15, 1998, memorandum. For transportation or transportation-related services contracts, the rule proposed that contracting officers should consider using, as evaluation factors or subfactors, the offeror's record of claims involving loss or damage, provider availability, and support for DOD readiness programs such as the CRAF and the VISA (proposed new DFARS 247.206, Preparation of Solicitations and Contracts). For contracts that include a significant requirement for transportation of items outside the continental United States, the rule proposed a requirement that an evaluation factor or subfactor be used that favors suppliers, third-party logistics providers, and integrated logistics managers that commit to using carriers that participate in one of the readiness programs such as the CRAF and the VISA (proposed new DFARS 247.301-71, Evaluation Factor or Subfactor). Seven commentors responded to the proposed rule, and DOD is finalizing the proposed rule with minor editorial changes.
The following are some of the other significant changes that are being made by this final rule:
- DFARS Subpart 212.6, Streamlined Procedures for Evaluation and Solicitation for Commercial Items, is added. It consists of DFARS 212.602, Streamlined Evaluation of Offers, and it cross-references the new DFARS 247.206, the new DFARS 247.301-71, and the revised DFARS 247.572-1, Ocean Transportation Incidental to a Contract for Supplies, Services, or Construction.
- In DFARS Subpart 242.14, Traffic and Transportation Management, references to the "Defense Traffic Management Regulations" (DTMR) are removed and, for the most part, replaced with references to "DOD 4500.9-R, Defense Transportation Regulation" (DTR) (instances where "DTMR" is not replaced by "DTR" are: DFARS 242.1401, General, is removed (it referenced Chapter 39 of the DTMR); in paragraph (a)(ii) of DFARS 242.1403, Shipping Documents Covering F.O.B. Origin Shipments (the reference to Appendix J of the DTMR is removed); and in paragraph (a) of DFARS 242.1470, Demurrage and Detention Changes (the reference to Chapter 38 of the DTMR is removed)). (EDITOR'S NOTE: DFARS 247.104-5, Citation of Government Rate Tenders, is also revised to replace its "DTMR" reference with a "DTR" reference, but the reference to DTMR is removed from paragraph (a)(ii) of DFARS 247.105, Transportation Assistance, and all of DFARS 247.103, Transportation Documentation and Audit Regulation (TDA), is removed since it references Appendix J of the DTRM.)
- DFARS 247.001, Definitions, is added. It states that "Joint Pub. 1-02, DOD Dictionary of Military and Associated Terms" should be referenced for definitions of CRAF and VISA (the proposed rule provided those definitions).
- DFARS 247.104-3, Cost-Reimbursement Contracts, is removed since it refers to government rate tenders under Section 10721 of the Interstate Commerce Act. Section 10721 has been extensively amended in recent years, and what remains has no practical application to the freight service DOD acquires from carriers. (EDITOR'S NOTE: Because of the changes to Section 10721 applicability, the Military Traffic Management Command (MTMC) is proposing to procure future transportation services involving recurring shipments or long term contracts under the Federal Acquisition Regulation (FAR). See the July 21, 2000, FEDERAL CONTRACTS DISPATCH "Military Traffic Management Command (MTMC); Freight Transportation Procurement Procedures.")
- Paragraph (a)(iii)(D) of DFARS 247.105, Transportation Assistance, revises the addresses of offices for assistance with international shipments between points outside the continental United States (CONUS).
- DFARS 247.270-3, Type of Contract ("normally, use an indefinite-quantity type contract"), is removed, and DFARS 247.270-4 through 247.270-7 are redesignated as DFARS 247.270-3 through 247.270-6, respectively.
- In paragraph (c)(1) of DFARS 247.271-2, Policy, and paragraph (c) of DFARS 247.271-4, Solicitation Provisions, Schedule Formats, and Contract Clauses, the references to DOD 4500.34-R, Personal Property Traffic Management Regulation, are replaced with references to DTR.
- New DFARS 247.301-70, Definition, states that "'Integrated logistics managers' or 'third-party logistics providers' means providers of multiple logistics services."
- Paragraph (a) of DFARS 247.570, Scope [of Subpart 247.5, Ocean Transportation by U.S.-Flag Vessels], is revised to add paragraph (d) of DFARS 247.571, Policy, which states that the Cargo Preference Act of 1904 does not apply to ocean transportation of products obtained for contributions to foreign assistance programs, or products owned by agencies other than DOD, because FAR Subpart 47.5, applies. DFARS 247.571(d) is deleted.
- DFARS 247.571(a) is revised to permit the Secretary of the Army, along with the Secretary of the Navy, to exempt the transport of supplies from the requirement to use U.S.-flag vessels if he or she determines that the freight charged is excessive or unreasonable. (EDITOR'S NOTE: MTMC is under the Army.)
- In (d)(3)(i)(A) of DFARS 247.572-1, Ocean Transportation Incidental to a Contract for Supplies, Services, or Construction, is the statement "the 1904 Act is, in part, a subsidy of the U.S.-flag commercial shipping industry that recognizes that lower prices may be available from foreign shippers." To this statement is added the following: "Therefore, a lower price for use of a foreign-flag vessel is not a sufficient basis, on its own, to determine that the freight rate proposed by the U.S.-flag carrier is excessive or otherwise unreasonable. However, such a price differential may indicate a need for further review..."
- Paragraph (a) of DFARS 252.247-7000, Hardship Conditions, is amended to add that the contractor shall notify the contracting officer of unusual ship, dock, or cargo conditions associated with loading or unloading a particular cargo "before performing the work, if feasible, but not later than the vessel sailing time." Also, paragraph (a) includes the requirement that the contractor "submit any associated request for price adjustment to the contracting officer within 10 working days of the vessel sailing time."
- DFARS 252.247-7003, Termination, is removed.
- In DFARS 252.247-7020, Additional Services, the terms "Interstate Commerce Commission" and "state regulatory bodies" are removed from the sentence, "The Contractor shall provide additional services not included in the schedule, but required for satisfactory completion of the services ordered under this contract, at a rate comparable to the rate for like services as contained in tenders on file with the Interstate Commerce Commission, state regulatory bodies, or the Military Traffic Management Command, in effect at time of order."
FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.
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