Policy
Government contracts requiring ocean transportation must prioritize U.S.-flag vessels, ensuring at least 50% of cargo is shipped on them unless a valid waiver is obtained.
Overview
FAR 47.502 establishes the U.S. Government's policy on the use of U.S.-flag vessels for ocean transportation of government supplies and personnel. It mandates preference for U.S.-flag commercial vessels under several statutes, including the Cargo Preference Acts of 1904 and 1954 and the Merchant Marine Act of 1936. The regulation requires that at least 50% of the gross tonnage of government-acquired supplies transported by sea must be shipped on U.S.-flag vessels, provided such vessels are available at fair and reasonable rates. This policy applies to supplies acquired for the U.S. government, furnished to foreign nations, or acquired with U.S. funds or guarantees. Additional preferences apply to official travel and transportation of personal effects and government-owned vehicles. Temporary waivers are allowed in emergencies declared by Congress, the President, or the Secretary of Defense.
Key Rules
- Mandatory Use of U.S.-Flag Vessels (Cargo Preference Act of 1904 & 1954)
- DOD must use U.S.-flag vessels for transporting military supplies unless unavailable at fair and reasonable rates; at least 50% of government cargo must be shipped on U.S.-flag vessels under specified conditions.
- Merchant Marine Act Policy
- U.S. policy encourages the development and maintenance of a strong merchant marine fleet.
- Additional Preferences
- U.S.-flag vessels must be used for official travel, personal effects, and government-owned vehicle transport when at government expense.
- Emergency Waivers
- Cargo Preference Act requirements may be temporarily waived in declared emergencies.
Responsibilities
- Contracting Officers: Ensure compliance with cargo preference laws and document vessel selection; seek waivers if necessary.
- Contractors: Arrange for U.S.-flag vessel use as required; provide documentation of compliance.
- Agencies: Monitor compliance and process waiver requests during emergencies.
Practical Implications
- Ensures support for the U.S. maritime industry and national security.
- Impacts shipping arrangements, costs, and timelines for government contracts involving ocean transport.
- Noncompliance can result in contract disputes, penalties, or loss of eligibility for future contracts.