46 CFR Part 381

§ 380.40

46 CFR Ch. II (10–1–09 Edition)

(6) Personnel records and supplementary records such as union agreements.
(c) Reports prepared by Federal,
State, Local, or foreign governments
pertaining to any documents referred
to in this § 380.24, shall be retained for
the same period as prescribed herein
for the retention of the documents to
which they apply.
(d) If identical copies of the same
document serve more than one purpose,
only the original copy is required to be
retained.
(Approved by the Office of Management and
Budget under control number 2133–0501)
(Sec. 204(b), Merchant Marine Act, 1936, as
amended (46 U.S.C. 1114(b)); Pub. L. 97–31
(August 6, 1981); 49 CFR 1.66 (46 FR 47458,
Sept. 28, 1981))
[48 FR 45560, Oct. 6, 1983]

Subpart D [Reserved]
Subpart E—Compulsory Disclosure
§ 380.40 Subpoenas, other compulsory
processes and requests.
In any case where it is sought by subpoena, order, or other compulsory process or other demand of a court or other
authority to require the production or
disclosure of any record in the files of
the Maritime Administration or other
information acquired by an officer or
employee of the Maritime Administration as a part of the performance of his
official duties or because of his official
status, the matter shall be immediately referred for determination,
through the Secretary of the Maritime
Administration and Maritime Subsidy
Board, to the Maritime Administrator,
Department of Transportation.
[G.O. 112, 36 FR 21816, Nov. 16, 1971]

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PART 381—CARGO PREFERENCE—
U.S.-FLAG VESSELS
Sec.
381.1 Purpose.
381.2 Definitions.
381.3 Reporting information and procedure.
381.4 Fair and reasonable participation.
381.5 Fix American-flag tonnage first.
381.6 Informal grievance procedure.
381.7 Federal Grant, Guaranty, Loan and
Advance of Funds Agreements.

381.8
381.9

Subsidized vessel participation.
Available U.S.-flag service.

AUTHORITY: 46 App. U.S.C. 1101, 1114(b),
1122(d) and 1241; 49 CFR 1.66.
SOURCE: General Order 103, 36 FR 6894, Apr.
10, 1971, unless otherwise noted.

§ 381.1 Purpose.
The purpose of this part 381 is to prescribe regulations to be followed by all
departments and agencies having responsibility under the Cargo Preference Act of 1954, section 901(b) of the
Merchant Marine Act, 1936, as amended
(46 U.S.C. 1241(b)), in the administration of their programs with respect to
that Act, and to provide a uniform system for the collection of data on the
administration of such programs for
use in preparing the annual reports to
Congress required by that Act.
§ 381.2 Definitions.
(a) Cargo Preference Act of 1954 means
section 901(b) of the Merchant Marine
Act, 1936, as amended (46 U.S.C.
1241(b)).
(b) Cargoes subject to the Cargo Preference Act of 1954, include equipment,
material or commodities:
(1) Procured, contracted for or otherwise obtained within or outside the
United States for the account of the
United States;
(2) Furnished within or outside the
United States to or for the account of
any foreign nation without provision
for reimbursement;
(3) Furnished within or outside the
United States for the account of any
foreign nation in connection with
which the United States advances
funds or credits or guarantees the
convertability of foreign currencies.
(4) Procured, contracted for, or otherwise obtained within or outside of the
United States with advance of funds,
loans or guaranties made by or on behalf of the United States.
(c) Department or agency having responsibility under the Cargo Preference
Act of 1954 means any department or
agency of the Federal Government, administering a program that involves
the transportation on ocean vessels of
cargoes subject to the Cargo Preference
Act of 1954. At present, these agencies
include:
(1) Department of State.

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Maritime Administration, DOT

§ 381.4

(2) Department of Agriculture.
(3) Department of Defense.
(4) Post Office Department.
(5) General Services Administration.
(6) Export-Import Bank of the United
States.
(7) National Aeronautics and Space
Administration.
(8)
Inter-American
Development
Bank.
(9) U.S. Information Agency.
(10) Department of Interior.
(11) Department of Commerce.
(12) Department of Treasury.
(13) Department of Health, Education, and Welfare.
(14) Department of Housing and
Urban Development.
(15) Department of Transportation.
(16) Atomic Energy Commission.
(17) Tennessee Valley Authority.
(18) Veterans Administration.
(19) Smithsonian Institution.
(20) Library of Congress.
(d) Liner parcel means any cargo, dry
or liquid, normally carried under berth
terms by common carriers in ocean
trades.
(Reorganization Plans No. 21 of 1950 (64 Stat.
1273) and No. 7 of 1961 (75 Stat. 840) as amended by Pub. L. 91–469 (84 Stat. 1036) and Department of Commerce Organization Order
10–8 (38 FR 19707, July 23, 1973))

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[G.O. 103, 36 FR 6894, Apr. 10, 1971, as amended by Amdt. 1, 36 FR 10739, June 2, 1971; 36 FR
19367, Oct. 5, 1971; 42 FR 57126; Nov. 1, 1977]

§ 381.3 Reporting information and procedure.
(a) Reports of cargo preference shipments. Each department or agency subject to the Cargo Preference Act of
1954, except the Department of Defense
for which separate regulations will be
issued, shall furnish to the Office of
National Cargo and Compliance, Maritime Administration, U.S. Department
of Transportation, Washington, DC
20590, within 20 working days of the
date of loading for shipments originating in the United States or within
30 working days for shipments originating outside the United States, the
following information concerning each
shipment of preference cargo:
(1) Identification of the sponsoring
U.S. Government agency or department;
(2) Name of vessel;

(3) Vessel flag of registry;
(4) Date of loading;
(5) Port of loading;
(6) Port of final discharge;
(7) Commodity description;
(8) Gross weight in pounds;
(9) Total ocean freight revenue in
U.S. dollars.
(b) Format of reports. The information
listed in paragraph (a) of this section
shall be furnished to the Maritime Administration in a format prepared by
the reporting department or agency
and approved by the Maritime Administrator, Department of Transportation
as suitable for the purpose of carrying
out his responsibility under section
901(b)(2) of the Merchant Marine Act,
1936, as amended, pursuant to the authority delegated to him thereunder by
the Secretary of Transportation under
section 3 of Department Organization
Order 10–8, 36 FR 1223. Where obtainable, a properly notated and legible
copy of the ocean bill of lading in
English will suffice. Reporting formats
shall be submitted for approval by
April 30, 1971.
(c) Shipments made subject to the Act.
In those instances where a shipment
has been made that was not known to
be subject to the Cargo Preference Act
of 1954 when it was made, but subsequent events cause it to be subject to
that Act, the agency taking the action
that caused the shipment to be subject
to the Act shall furnish to the Office of
National Cargo and Compliance the information listed in paragraph (a) of
this section in the approved reporting
form.
[General Order 103, 36 FR 6894, Apr. 10, 1971,
as amended at 57 FR 13047, Apr. 15, 1992]

§ 381.4 Fair and reasonable participation.
In order to insure a fair and reasonable participation by U.S.-flag commercial vessels in liner parcel cargoes
subject to the Cargo Preference Act of
1954, as required by that Act, the head
of each department or agency having
responsibility under that Act shall prescribe regulations or formal staff instructions providing for the cargo mix
of liner parcel cargoes transported on
ocean vessels to be divided between privately owned U.S.-flag vessels and foreign-flag vessels in such a manner as to

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§ 381.5

46 CFR Ch. II (10–1–09 Edition)

yield to the U.S.-flag vessels freight
revenue per long ton at least equal to
the freight revenue per long ton afforded the foreign-flag vessels participating in the same grant, loan, or purchase transaction. A copy of the regulations or staff instructions prescribed
by each department or agency shall be
furnished to the Secretary, Maritime
Administration, no later than June 30,
1971, for approval.
[G.O. 103, Amdt. 1, 36 FR 10739, June 2, 1971]

§ 381.5 Fix American-flag tonnage first.
Each department or agency having
responsibility under the Cargo Preference Act of 1954 shall cause each full
shipload of cargo subject to said act to
be fixed on U.S.-flag vessels prior to
any fixture on foreign-flag vessels for
at least that portion of all preference
cargoes required by that Act and the
Food Security Act of 1985 to be shipped
on U.S.-flag vessels, computed by purchase authorization or other quantitative unit satisfactory to the agency
involved and the Maritime Administration, except where such department or
agency determines, with the concurrence of the Maritime Administration,
that (a) U.S.-flag vessels are not available at fair and reasonable rates for
U.S.-flag commercial vessels, or (b)
that there is a substantially valid reason for fixing foreign-flag vessels first.

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[G.O. 103, Amdt. 2, 36 FR 19254, Oct. 1, 1971, as
amended at 57 FR 13047, Apr. 15, 1992]

§ 381.6 Informal grievance procedure.
(a) Whenever any person has a question, problem, complaint, grievance, or
controversy pertaining to the terms
and conditions of any tenders, charter
party terms, or other matter involving
the administration of the Cargo Preference Act of 1954, such person may request the Maritime Administration to
afford him an opportunity to discuss
the matter informally with representatives of the Maritime Administration
and, if other U.S. Government agencies
or foreign missions, embassies, or agencies acting on behalf of a foreign government are involved with them or persons authorized to speak for them.
(b) In such cases, a request may be
made by telephone or letter to the
Chief, Office of Market Development,

Maritime Administration, Washington,
DC 20590, (202) 366–4610. When such a request has been received, the Maritime
Administrator, Department of Transportation or his designated representative will promptly consider the matter
on its merits and provide assistance if
possible. If the matter cannot be resolved satisfactorily by the Maritime
Administration, the Maritime Administrator, Department of Transportation
or his designated representative will
then arrange for a meeting at a time
and place satisfactory to all interested
parties so that the matter may be freely discussed and resolved.
(c) At such meetings, the Maritime
Administrator, Department of Transportation or his designated representative may request any U.S. Government
agency, foreign mission, embassy, or
agency acting on behalf of a foreign
government, or others having an interest in the matter to attend such a conference, or to send representatives authorized to speak for them. All such
meetings and conferences will be conducted in an informal manner.
[G.O. 103, Amdt. 3, 37 FR 3641, Feb. 18, 1972, as
amended at 57 FR 13047, Apr. 15, 1992]

§ 381.7 Federal Grant, Guaranty, Loan
and Advance of Funds Agreements.
In order to insure a fair and reasonable participation by privately owned
United States-flag commercial vessels
in transporting cargoes which are subject to the Cargo Preference Act of 1954
and which are generated by U.S. Government Grant, Guaranty, Loan and/or
Advance of Funds Programs, the head
of each affected department or agency
shall require appropriate clauses to be
inserted in those Grant, Guaranty,
Loan and/or Advance of Funds Agreements and all third party contracts executed between the borrower/grantee
and other parties, where the possibility
exists for ocean transportation of
items procurred, contracted for or otherwise obtained by or on behalf of the
grantee, borrower, or any of their contractors or subcontractors. The clauses
required by this part shall provide that
at least 50 percent of the freight revenue and tonnage of cargo generated by
the U.S. Government Grant, Guaranty,
Loan or Advance of Funds be transported on privately owned United

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Maritime Administration, DOT

§ 381.8

States-flag commercial vessels. These
clauses shall also require that all parties provide to the Maritime Administration the necessary shipment information as set forth in § 381.3. A copy of
the appropriate clauses required by
this part shall be submitted by each affected agency or department to the
Secretary, Maritime Administration,
for approval no later than 30 days after
the effective date of this part. The following
are
suggested
acceptable
clauses with respect to the use of
United States-flag vessels to be incorporated in the Grant, Guaranty, Loan
and/or Advance of Funds Agreements
as well as contracts and subcontracts
resulting therefrom:
(a) Agreement Clauses. ‘‘Use of United
States-flag vessels:
‘‘(1) Pursuant to Pub. L. 664 (43 U.S.C.
1241(b)) at least 50 percent of any equipment, materials or commodities procured, contracted for or otherwise obtained with funds granted, guaranteed,
loaned, or advanced by the U.S. Government under this agreement, and
which may be transported by ocean
vessel, shall be transported on privately owned United States-flag commercial vessels, if available.
‘‘(2) Within 20 days following the date
of loading for shipments originating
within the United States or within 30
working days following the date of
loading for shipments originating outside the United States, a legible copy
of a rated, ‘on-board’ commercial ocean
bill-of-lading in English for each shipment of cargo described in paragraph
(a)(1) of this section shall be furnished
to both the Contracting Officer
(through the prime contractor in the
case of subcontractor bills-of-lading)
and to the Division of National Cargo,
Office of Market Development, Maritime Administration, Washington, DC
20590.’’
(b) Contractor and Subcontractor
Clauses. ‘‘Use of United States-flag vessels: The contractor agrees—
‘‘(1) To utilize privately owned
United States-flag commercial vessels
to ship at least 50 percent of the gross
tonnage (computed separately for dry
bulk carriers, dry cargo liners, and
tankers) involved, whenever shipping
any equipment, material, or commodities pursuant to this contract, to the

extent such vessels are available at fair
and reasonable rates for United Statesflag commercial vessels.
‘‘(2) To furnish within 20 days following the date of loading for shipments originating within the United
States or within 30 working days following the date of loading for shipments originating outside the United
States, a legible copy of a rated, ‘onboard’ commercial ocean bill-of-lading
in English for each shipment of cargo
described in paragraph (b) (1) of this
section to both the Contracting Officer
(through the prime contractor in the
case of subcontractor bills-of-lading)
and to the Division of National Cargo,
Office of Market Development, Maritime Administration, Washington, DC
20590.
‘‘(3) To insert the substance of the
provisions of this clause in all subcontracts issued pursuant to this contract.’’
(Reorganization Plans No. 21 of 1950 (64 Stat.
1273) and No. 7 of 1961 (75 Stat. 840) as amended by Pub. L. 91–469 (84 Stat. 1036) and Department of Commerce Organization Order
10–8 (38 FR 19707, July 23, 1973))
[42 FR 57126, Nov. 1, 1977]

§ 381.8

Subsidized vessel participation.

(a) For the purpose of approving subsidized U.S.-flag liner and bulk vessels
competing for the carriage of dry bulk
preference cargoes, each department or
agency having responsibility under the
Cargo Preference Act of 1954 (46 U.S.C.
1214(b)), shall evaluate bids received
from the operators of such vessels in
the manner described in this section.
(b) When a subsidized vessel operator
is the apparent low U.S.-flag responsive
bidder for a dry bulk preference cargo,
the responsible department or agency
shall evaluate the subsidized operator’s
bid by:
(1) Requesting from MARAD an
amount for the operating-differential
subsidy (ODS) likely to be paid for the
carriage of such cargo expressed as a
cost per ton for performing the voyage
by the apparent low responsive subsidized bidders;
(2) Deriving ‘‘augmented bids’’ for
the subsidized operators by adding the
ODS amount to each subsidized operator’s bid;

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§ 381.9

46 CFR Ch. II (10–1–09 Edition)

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(3) Comparing the augmented bids of
the subsidized operators and the bids of
unsubsidized operators to determine
the apparent low responsive bidder;
(4) Requesting from MARAD a fair
and reasonable guideline rate for the
apparent low responsive bidder which
shall be based on MARAD’s calculation
of anticipated costs (less ODS in the
case of a subsidized vessel) for the voyage plus a reasonable amount for profit
for the voyage; and
(5) Determining whether the subsidized operator’s unaugmented bid or
the unsubsidized operator’s bid, whichever was determined to be the lowest
responsive bid pursuant to paragraph
(b)(3) of this section, is at or below the
fair and reasonable guideline rate.
(c) If the amount of dry bulk cargo to
be shipped is changed at any time prior
to award, the department or agency
shall request that MARAD provide new
ODS amounts applicable to the carriage. The department or agency shall
redetermine the augmented bids before
determining the lowest responsive bid
and requesting from MARAD a revised
fair and reasonable guideline rate in
accordance with the provisions of paragraph (b) of this section.
(d) Whenever a bid is submitted for a
U.S.-flag vessel for the transportation
of dry bulk preference cargo, the responsible department or agency shall
only approve bids that apply to an individual vessel, and may not accept combined bids submitted for more than one
vessel. If two or more vessels are offered, separate bids shall be submitted
for each vessel. A bidder may submit a
conditional lower bid for each vessel to
be effective only if more than one vessel is contracted to carry the cargo.
(e) The requirements of this section
shall apply only to those departments
or agencies that directly pay or finance
all or part of U.S.-flag ocean freight
transportation costs for the carriage of
dry bulk preference cargoes, in accordance with this part.
(f) The requirements of this section
shall not apply to foreign aid consisting of direct cash transfer payments under specific agreements be-

tween departments or agencies and the
recipient country with respect to the
utilization of U.S.-flag vessels for
transportation of commodities purchased with such funds.
[53 FR 24272, June 28, 1988]

§ 381.9

Available U.S.-flag service.

For purposes of shipping bulk agricultural commodities under programs
administered by sponsoring Federal
agencies from U.S. Great Lakes ports
during the 1996–2000 Great Lakes shipping seasons, if direct all-U.S.-flag
service, at fair and reasonable rates, is
not available at U.S. Great Lakes
ports, a joint service involving a foreign-flag vessel(s) carrying cargo no
farther than a Canadian port(s) or
other point(s) on the Gulf of St. Lawrence, with transshipment via a U.S.flag privately-owned commercial vessel
to the ultimate foreign destination,
will be deemed to comply with the requirement of ‘‘available’’ commercial
U.S.-flag service under the Cargo Preference Act of 1954. Shipper agencies
considering bids resulting in the lowest
landed cost of transportation based on
U.S.-flag rates and service shall include within the comparison of U.S.flag rates and service, for shipments
originating in U.S. Great Lakes ports,
through rates (if offered) to a Canadian
port or other point on the Gulf of St.
Lawrence and a U.S.-flag leg for the remainder of the voyage. The ‘‘fair and
reasonable’’ rate for this mixed service
will be determined by considering the
U.S.-flag component under the existing
regulations at 46 CFR Part 382 or 383,
as appropriate, and incorporating the
cost for the foreign-flag component
into the U.S.-flag ‘‘fair and reasonable’’
rate in the same way as the cost of foreign-flag vessels used to lighten U.S.flag vessels in the recipient country’s
territorial waters. Alternatively, the
supplier of the commodity may offer
the Cargo FOB Canadian transshipment point, and MARAD will determine fair and reasonable rates accordingly.
[61 FR 24897, May 17, 1996]

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Maritime Administration, DOT

§ 382.2

PART 382—DETERMINATION OF
FAIR AND REASONABLE RATES
FOR THE CARRIAGE OF BULK
AND PACKAGED PREFERENCE
CARGOES ON U.S.-FLAG COMMERCIAL VESSELS
Sec.
382.1 Scope.
382.2 Data submission.
382.3 Determination of fair and reasonable
rates.
382.4 Waivers.
AUTHORITY: 46 App. U.S.C. 1114, 1241(b); 49
CFR 1.66.
SOURCE: 63 FR 3828, Jan. 27, 1998, unless
otherwise noted.

§ 382.1

Scope.

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The regulations in this part prescribe
the type of information that shall be
submitted to the Maritime Administration (MARAD) by operators interested
in carrying bulk and packaged preference cargoes, and the method for calculating fair and reasonable rates for
the carriage of dry (including packaged) and liquid bulk preference cargoes on U.S.-flag commercial vessels,
except vessels engaged in liner trades,
which is defined as service provided on
an advertised schedule, giving relatively frequent sailings between specific U.S. ports or ranges and designated foreign ports or ranges.
§ 382.2 Data submission.
(a) General. The operators shall submit information, described in paragraphs (b) and (c) of this section, to the
Director, Office of Costs and Rates,
Maritime Administration, Washington,
DC 20590. To the extent a vessel is time
chartered, the operator shall also submit operating expenses for that vessel.
All submissions shall be certified by
the operators. A further review based
on the independent CPA performing an
engagement consistent with professional standards, i.e., an attestation
engagement, is recommended. Submissions are subject to verification, at
MARAD’s discretion, by the Office of
the Inspector General, Department of
Transportation. MARAD’s calculations
of the fair and reasonable rates for
U.S.-flag vessels shall be performed on
the basis of cost data provided by the

U.S.-flag vessel operator, as specified
herein. If a vessel operator fails to submit the required cost data, MARAD
will not construct the guideline rate
for the affected vessel, which may result in such vessel not being approved
by the sponsoring Federal agency.
(b) Required vessel information. The
following information shall be submitted not later than April 30, 1998, for
calendar year 1997 and shall be updated
not later than April 30 for each subsequent calendar year. In instances
where a vessel has not previously participated in the carriage of cargoes described in § 382.1, the information shall
be submitted not later than the same
date as the offer for carriage of such
cargoes is submitted to the sponsoring
Federal agency, and/or its program participant, and/or its agent and/or program’s agent, or freight forwarder.
(1) Vessel name and official number.
(2) Vessel DWT (summer) in metric
tons.
(3) Date built, rebuilt and/or purchased.
(4) Normal operating speed.
(5) Daily fuel consumption at normal
operating speed, in metric tons (U.S.
gallons for tugs) and by type of fuel.
(6) Daily fuel consumption in port
while pumping and standing, in metric
tons (U.S. gallons for tugs) and by type
of fuel.
(7) Total capitalized vessel costs (list
and date capitalized improvements separately), and applicable interest rates
for indebtedness (where capital leases
are involved, the operator shall report
the imputed capitalized cost and imputed interest rate).
(8) Operating cost information, to be
submitted in the format stipulated in
46 CFR 232.1, on Form MA–172, Schedule 310. Operators are encouraged to
provide operating cost information for
similar vessels that the operator considers substitutable within a category,
as defined in § 382.3(a)(1), in the aggregate on a single schedule. Information
shall be applicable to the most recently completed calendar year.
(9) Number of vessel operating days
pertaining to data reported in paragraph (b)(8) of this section for the year
ending December 31. For purposes of
this part, an operating day means any
day on which a vessel or tug/barge unit

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