Definitions

Overview

This section provides standardized maritime terminology used to implement the Cargo Preference Act, defining the specific characteristics of various vessels and their registry status. It establishes the criteria necessary to distinguish between U.S.-flag and foreign-flag vessels for the purpose of transporting government-impelled cargo.

Key Rules

• Vessel Classifications: Defines vessels based on cargo type, including Dry Bulk Carriers (homogeneous nonliquid), Dry Cargo Liners (heterogeneous marked parcels), and Tankers (bulk liquids).
• U.S.-Flag Vessel Criteria: When used independently, the term encompasses both Government-owned vessels and privately owned U.S.-flag commercial vessels.
• Privately Owned U.S.-Flag Commercial Vessel Requirements: To meet this definition, a vessel must satisfy four specific criteria:
  1. Registered and operated under U.S. laws.
  2. Used in U.S. commercial trade.
  3. Owned and operated by U.S. citizens.
  4. Includes Government-owned vessels under bareboat charter to U.S. citizens.
• Foreign-Flag Designation: Explicitly includes any vessel with a foreign registry, even if the underlying ownership belongs to U.S. citizens.
• Government Vessel Scope: Includes vessels owned by the U.S. Government and operated directly by the Government, by contractors, or privately owned vessels under bareboat charter to the Government.

Practical Implications

• Cargo Preference Compliance: Contractors must use these definitions to ensure they are meeting statutory requirements to transport specific percentages of government cargo on U.S.-flag vessels.
• Subcontractor Oversight: Prime contractors must ensure that maritime subcontractors provide vessels that meet the "Privately owned U.S.-flag commercial vessel" criteria to avoid non-compliance with FAR Part 47 shipping clauses.