47.505
Construction contracts
Overseas construction contractors must use U.S.-flag vessels for ocean transport unless the project qualifies for a specific exception based on recipient nation funding.
Overview
FAR 47.505 addresses the requirements for construction contractors, including subcontractors and suppliers, performing work overseas regarding the use of U.S.-flag vessels for ocean transportation. The section mandates compliance with the broader policies and regulations of Subpart 47.5, which generally require the use of U.S.-flag vessels for transporting supplies and equipment. However, an exception is provided for projects involving military assistance, foreign aid, or similar efforts where the recipient nation covers at least 50% of transportation costs. In such cases, foreign-flag vessels may be used for up to 50% of the project's gross tonnage.
Key Rules
- Mandatory Compliance for Overseas Construction
- Construction contractors, subcontractors, and suppliers working overseas must follow Subpart 47.5 policies on ocean transportation.
- Exception for Certain Government Projects
- If a recipient nation under military assistance or foreign aid projects pays for at least 50% of transportation, foreign-flag vessels can be used for up to 50% of the gross tonnage.
Responsibilities
- Contracting Officers: Ensure contractors are aware of and comply with U.S.-flag vessel requirements and exceptions.
- Contractors: Use U.S.-flag vessels for overseas transportation unless the specific exception applies.
- Agencies: Monitor compliance and verify eligibility for exceptions under military assistance or foreign aid projects.
Practical Implications
- This section ensures U.S.-flag vessels are prioritized for overseas construction projects, supporting U.S. maritime interests.
- Contractors must carefully assess project funding sources and transportation arrangements to determine compliance.
- Misinterpretation of the exception could lead to noncompliance and potential contract issues.