2018-01851. Voluntary Intermodal Sealift Agreement; Changes to the Open Season Enrollment Period

AGENCY:

Maritime Administration, Department of Transportation.

ACTION:

Notice.

SUMMARY:

The Maritime Administration (MARAD) announces that it is changing the open season enrollment procedures for U.S.-flag vessel operators wishing to enroll their vessels in the Voluntary Intermodal Sealift Agreement (VISA) program. Specifically, MARAD will no longer announce an annual open season for enrollment. MARAD invites interested U.S.-flag vessel operators that are not currently in the program to apply at any time throughout the year. The open enrollment change will be in line with new requirements in the Department of Defense (DOD) VISA contingency contract.

Any U.S.-flag vessel operator organized under the laws of a state of the United States or the District of Columbia, and who is able and willing to commit militarily useful sealift assets and assume the related consequential risks of commercial disruption, may be eligible to participate in the VISA program.

The mission of VISA is to provide commercial sealift and intermodal shipping services and systems, including access to vessels, vessel space, intermodal systems and equipment, terminal facilities, and related management services, to the DOD, as necessary, to meet national defense contingency requirements or national emergencies. Carriers enrolled in the VISA program provide DOD with assured access to such services during contingencies. In return for their VISA commitment, DOD gives VISA participants priority for peacetime cargos.

DATES:

VISA program applications may be submitted at any time.

ADDRESSES:

Submit applications and questions related to this notice to William G. McDonald, Director, Office of Sealift Support, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone [phone]; Fax [phone].

FOR FURTHER INFORMATION CONTACT:

William G. McDonald, Director, Office of Sealift Support, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone [phone]; Fax [phone], electronic mail to [e-mail] or visit http://www.marad.dot.gov.

SUPPLEMENTARY INFORMATION:

The VISA program was established pursuant to Sec. 708 of the Defense Production Act of 1950, as amended (DPA) (50 U.S.C. 4558). The VISA program was created to provide for voluntary agreements for emergency preparedness programs. Pursuant to the DPA, voluntary agreements for preparedness programs, including the VISA program expire five (5) years after the date they became effective.

The VISA program is open to U.S.-flag vessel operators of oceangoing militarily useful vessels, to include tugs and barges. An operator is defined as an owner or bareboat charterer of a vessel. Tug enrollment alone does not satisfy VISA eligibility. Barge enrollment alone does not satisfy VISA eligibility. Operators include vessel owners and bareboat charter operators if satisfactory signed agreements are in place committing the assets of the owner to VISA. Voyage and space charterers are not considered U.S.-flag vessel operators for purposes of VISA eligibility.

VISA Program

The VISA program provides for the staged, time-phased availability of participants' shipping services/systems through pre-negotiated contracts between the Government and participants. Such arrangements are jointly planned with the MARAD, U.S. Transportation Command (USTRANSCOM), and participants in peacetime to allow effective and best valued use of commercial sealift capacity, provide DOD assured contingency access, and to minimize commercial disruption.

There are three time-phased stages in the event of VISA activation. VISA Stages I and II provide for pre-negotiated contracts between DOD and participants to provide sealift capacity to meet all projected DOD contingency requirements. These contracts are executed in accordance with approved DOD contracting methodologies. VISA Stage III provides for additional capacity to DOD when Stages I and II commitments or volunteered capacity are insufficient to meet contingency requirements, and adequate shipping services from non-participants are not available through established DOD contracting practices or U.S. Government treaty agreements.

Change to Enrollment Process

Historically, the VISA program's annual open season enrollment period was tied to DOD's peacetime cargo contracting cycle which was based on the Government's fiscal year (October 1 through September 30) and VISA participants' capacity commitments were locked in for an annual period. Currently, DOD's new contract requirements have been revised and state that if any change in a VISA participant's U.S.-flag fleet is necessary during the period of their contract, a minimum 30-day notice must be provided to USTRANSCOM identifying the change. Therefore, MARAD is no longer required to announce an annual open season because DOD modifies VISA participants' capacity commitments and contingency contracts throughout the year. This new process adds efficiency and eliminates redundancy.

Advantages of Peacetime Participation

In return for their VISA commitment, DOD awards peacetime cargo contracts to VISA participants on a priority basis. Award of DOD cargoes to meet DOD peacetime and contingency requirements is made on the basis of the following priorities: U.S.-flag vessel capacity operated by VISA participants and U.S.-flag Vessel Sharing Agreement (VSA) capacity held by VISA participants; U.S.-flag vessel capacity operated by non-participants; combination U.S.-flag/foreign-flag vessel capacity operated by VISA participants, and combination U.S.-flag/foreign-flag VSA capacity held by VISA participants; combination U.S.-flag/foreign-flag vessel capacity operated by non-participants; U.S.-owned or operated foreign-flag vessel capacity and VSA capacity held by VISA participants; U.S.-owned or operated foreign-flag vessel capacity and VSA capacity held by non-participants; and foreign-owned or operated foreign-flag vessel capacity of non-participants.

Participation

Applicants must provide satisfactory evidence that the vessels being committed to the VISA program are operational and are intended to be operated by the applicant in the carriage of commercial or government preference cargoes. Operator is defined as an ocean common carrier or contract carrier that owns, controls or manages vessels by which ocean transportation is provided. While vessel brokers, freight forwarders, and agents play an important role as a conduit to locate and secure appropriate vessels for the carriage of DOD cargo, they are not eligible to participate in the VISA program due to lack of requisite vessel ownership or operation.

Commitment

Any U.S.-flag vessel operator desiring to receive priority consideration for DOD peacetime contracts must enroll 100% of their entire U.S.-flag militarily useful capacity and associated services to the VISA program and commit no less than 50 percent of its total U.S.-flag capacity in Stage III of the VISA program. Participants operating vessels in international trade may receive top tier consideration in the award of DOD peacetime contracts by committing the minimum percentages of capacity to all three stages of VISA or bottom tier consideration by committing the minimum percentage of capacity to only Stage III of VISA. USTRANSCOM and MARAD will coordinate to ensure that the amount of sealift assets committed to Stages I and II will not have an adverse national economic impact. To minimize domestic commercial disruption, participants operating vessels exclusively in the domestic Jones Act trades are not required to commit the capacity of those U.S. domestic trading vessels to VISA Stages I and II. Overall VISA commitment requirements are based on annual enrollment.

In order to protect a U.S.-flag vessel operator's market share during contingency activation, VISA allows participants to join with other vessel operators in Carrier Coordination Agreements (CCAs) to satisfy commercial or DOD requirements. VISA provides a defense against antitrust laws in accordance with the DPA. CCAs must be submitted to MARAD for coordination with the Department of Justice for approval, before they can be utilized.

Vessel Position Reporting

If VISA applicants have the capability to track their vessels, they must include the tracking system used in their VISA application. Such applicants are required to provide MARAD access to their vessel tracking systems upon approval of their VISA application. If VISA applicants do not have a tracking system, they must indicate this in their VISA application. The VISA program requires enrolled ships to comply with 46 CFR pt. 307, Establishment of Mandatory Position Reporting System for Vessels.

Compensation

In addition to receiving priority in the award of DOD peacetime cargo, a participant will receive compensation during contingency activation for that capacity activated under Stage I, II and III. The amount of compensation will depend on the Stage at which capacity is activated. During enrollment, each participant must select one of several compensation methodologies. The compensation methodology selection will be completed with USTRANSCOM resulting in prices in contingency contracts between DOD and the participant.

Security Clearances

All VISA applicants accepted for VISA participation, but which do not have a Facility Security Clearance (FCL), will be required to pursue the clearance process with the Defense Security Service (DSS). If the accepted applicant does not have a clearance, MARAD will initiate the clearance process with DSS. Participants must have a FCL and individual security clearances, at a minimum of SECRET level, for key personnel in order for them to participate in the VISA Joint Planning Advisory Group (JPAG) meetings and to meet VISA contingency contract obligations. One of the objectives of the JPAG is to provide the USTRANSCOM, MARAD, and VISA participants a planning forum to analyze DOD contingency sealift/intermodal service and resource requirements against industry commitments. JPAG meetings are often SECRET classified sessions. Eligibility for VISA participation will be terminated if an applicant is rejected for a facility clearance or if it fails to progress in a timely manner in the clearance process.

Application for VISA Program Participation

New applicants may apply to participate by obtaining a VISA application package (Form MA-1020 (OMB Approval No. 2133-0532)) from the Director, Office of Sealift Support. Form MA-1020 includes instructions for completing and submitting the application, blank VISA Application forms and a request for information regarding the operations and U.S. citizenship of the applicant company. A copy of the VISA document as published in the Federal Register on October 29, 2014, will also be provided with the package. This information is needed in order to assist MARAD in making a determination of the applicant's eligibility. An applicant company must provide an affidavit that demonstrates that the company is qualified to document a vessel under 46 U.S.C. 12103, and that it owns, or bareboat charters and controls, oceangoing, militarily useful vessel(s) for purposes of committing assets to the VISA program.

Applicants must provide the following: U.S. citizenship documentation; copy of their Articles of Incorporation and bylaws; copies of loadline documents from a recognized classification society to validate oceangoing vessel capability; U.S. Coast Guard Certificates of Documentation for all vessels in their fleet; copy of bareboat charters, if applicable, valid through the period of enrollment, which state that the owner will not interfere with the charterer's obligation to commit chartered vessel(s) to the VISA program for the duration of the charter; and copy of time charters, valid through the period of enrollment, for tug services to barge operators, if sufficient tug service is not owned or bareboat chartered by the VISA applicant. Barge operators must provide evidence to MARAD that tug service of sufficient horsepower will be available for all barges enrolled in the VISA program.

Once MARAD has reviewed the application and determined VISA eligibility, MARAD will sign the VISA application document which completes the eligibility phase of the VISA enrollment process. Approved VISA participants will be responsible for ensuring that information submitted with their application remains up to date beyond the approval process. If charter agreements are due to expire, participants must provide MARAD with charters that extend the charter duration for another 12 months or longer.

After VISA eligibility is approved by MARAD, approved applicants are required to execute a VISA Contingency Contract with USTRANSCOM. The USTRANSCOM VISA Contingency Contract will specify the following: Participant's Stage III commitment, and appropriate Stage I and/or II commitments for the period of performance; Drytime Contingency terms and conditions; and Liner Contingency terms and conditions, if applicable. If any change is expected in the Contractor's U.S. flag fleet during the period of the applicable VISA Contingency Contract, a minimum 30-day notice shall be provided to MARAD and USTRANSCOM identifying the change and to alter the VISA Capacity Commitment indicated on Attachment 1 of the VISA Contingency Contract.

Execution of the USTRANSCOM VISA Contingency Contract completes the enrollment process and establishes the approved applicant as a VISA Participant. The Maritime Administration reserves the right to revalidate all eligibility requirements without notice. USTRANSCOM reserves the right to revalidate eligibility for VISA priority for DOD business at any time without notice.

Authority: 49 CFR 1.92, 1.93.

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By Order of the Maritime Administrator.

Dated: January 26, 2018.

T. Mitchell Hudson, Jr.,

Secretary, Maritime Administration.