47.503 Applicability
Source: FAR 47.503 on acquisition.gov
FAR 47.503 mandates the use of U.S.-flag vessels for certain government cargo shipments, with specific rules for military and foreign assistance cargo.
Overview
FAR 47.503 outlines when the Cargo Preference Acts of 1904 and 1954 apply to government cargo shipments. It specifies the types of cargo and circumstances under which these acts require the use of U.S.-flag commercial vessels for ocean transportation. The regulation covers government-owned supplies, supplies contracted for government use, and supplies for foreign assistance programs, with certain exceptions and clarifications on the extent of U.S.-flag vessel use required.
Key Rules
- General Applicability
- The Cargo Preference Acts apply to government-owned supplies in the possession of the government, contractors, or subcontractors, as well as supplies contracted for government use and certain foreign assistance supplies.
- Military Department Shipments
- Government-owned supplies for military departments must be shipped exclusively on U.S.-flag commercial vessels if available at fair and reasonable rates.
- 50-Percent Requirement Flexibility
- The regulation allows up to 100% of cargo subject to the Cargo Preference Act of 1954 to be shipped on U.S.-flag vessels, even though the law generally requires at least 50%.
Responsibilities
- Contracting Officers: Must ensure compliance with cargo preference requirements when arranging ocean transportation for applicable government cargo.
- Contractors: Must use U.S.-flag vessels as required and understand when these requirements apply to their shipments.
- Agencies: Oversee compliance and ensure proper application of cargo preference laws.
Practical Implications
- This section ensures U.S.-flag vessels are used for transporting government cargo, supporting the U.S. maritime industry and national security.
- Contractors must carefully determine when cargo preference applies and ensure proper vessel selection, especially for military and foreign assistance shipments.
- Common pitfalls include misidentifying applicable cargo or failing to secure U.S.-flag vessels when required.
(a) Except as stated in paragraph (b) of this section and in 47.504, the Cargo Preference Acts of1904 and1954 described in 47.502(a) apply to the following cargoes:
(1) Supplies owned by the Government and in the possession of-
(i) The Government;
(ii) A contractor; or
(iii) A subcontractor at any tier.
(2) Supplies for use of the Government that are contracted for and require subsequent delivery to a Government activity but are not owned by the Government at the time of shipment.
(3) Supplies not owned by the Government at the time of shipment that are to be transported for distribution to foreign assistance programs, but only if these supplies are not acquired or contracted for with local currency funds (see 47.504(b)).
(b) Government-owned supplies to be shipped commercially that are-
(1) In the possession of a department, a contractor, or a subcontractor at any tier and
(2) For use of military departments shall be transported exclusively in privately owned U.S.-flag commercial vessels if such vessels are available at rates that are fair and reasonable for U.S.-flag commercial vessels.
(c) The 50-percent requirement shall not prevent the use of privately owned U.S.-flag commercial vessels for transportation of up to 100 percent of the cargo subject to the Cargo Preference Act of1954.