Overview
FAR 47.502 outlines the statutory requirements and national policy mandates for using U.S.-flag vessels when transporting government supplies, personnel, and equipment by sea. It establishes specific tonnage percentages and preference rules derived from the Cargo Preference Acts of 1904 and 1954 and the Merchant Marine Act of 1936.
Key Rules
- Department of Defense (DoD) Mandate: Under the 1904 Act, the DoD must use U.S.-flag vessels for 100% of ocean transportation of military supplies, provided they are available at fair and reasonable rates.
- Civilian Agency Requirements: Under the 1954 Act, at least 50% of the gross tonnage of government-acquired supplies must be transported on privately owned U.S.-flag commercial vessels.
- Tonnage Calculations: Compliance with the 50% rule is computed separately for three specific categories: dry bulk carriers, dry cargo liners, and tankers.
- Broad Applicability: These rules apply to supplies acquired for the U.S. government, foreign aid programs, and items acquired through U.S. government loans, credits, or guarantees.
- Personnel and Vehicles: U.S.-flag vessels are required for the official travel of government employees, the shipment of their personal effects, and the transport of government-authorized motor vehicles.
- Waiver Authority: The requirements of the 1954 Act may be temporarily suspended in an emergency if declared by Congress, the President, or the Secretary of Defense.
Practical Implications
- Contractors and agencies must prioritize U.S.-flag shipping in their logistics planning and may need to provide detailed documentation or "non-availability" certificates if seeking to use foreign vessels.
- The requirement to use U.S.-flag vessels—which often command higher rates—must be factored into contract pricing and cost estimates unless the rates are determined to be unfair or unreasonable.