DLA Acquisition Regulation; Fuel Allocation Procedures

DEPARTMENT OF DEFENSE

Defense Logistics Agency

48 CFR Part 5452

DLA Acquisition Regulation; Fuel Allocation Procedures

agency: Defense Logistics Agency, DoD.

action: Final rule.

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summary: The Defense Logistics Agency establishes a new 48 CFR Chapter

54 to contain Defense Logistics Agency acquisition regulations. New

part 5452 is added to supplement Federal Acquisition Regulation

49.504(a)(1) and its requirement to use FAR Default clause 52.249-8.

The Defense Fuel Supply Center (DFSC) proposed three nonstandard

clauses for bulk, bunkers, into-plane, and posts, camps, and stations

petroleum solicitations and contracts concerning fuel allocation

procedures. The three clauses have been incorporated into one clause

for use by DFSC. This allocation clause permits DFSC contractors to

supply less than the full amount of fuel contracted by the government,

without being terminated for default, during periods of exceptional

fuel shortages, provided that the shortage is beyond the control and

without the fault or negligence of the contractor.

effective date: May 4, 1995.

for further information contact: Ms. Melody Reardon, (703) 274-6431.

SUPPLEMENTARY INFORMATION:

A. Background

On April 28, 1994, DFSC published a proposed rule in the Federal

Register to incorporate three nonstandard clauses into the DLAR. Public

comments were requested, received, addressed, and resolved by DFSC. As

a result, the three nonstandard clauses were consolidated into one

clause by DFSC, to be used in domestic and overseas petroleum

solicitations and contracts. DFSC has historically utilized deviations

to FAR termination for default clauses in order to provide for

contingencies in the case of fuel allocations by contractors. These

deviations have been approved on an annual basis since 1974. DFSC

incorporates the nonstandard fuel allocation clause in DLAR in order to

eliminate the need for annual review and approval. The clause is

necessary to protect potential contractors from default proceedings and

ensure the continuance of a competitive procurement environment for

government petroleum requirements. Allocation of fuel to customers on a

pro rata basis during periods of extreme shortage is a standard

practice in the petroleum industry.

B. Regulatory Flexibility Act

The final clause is not expected to have significant economic

impact on a substantial number of small entities within the meaning of

the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. since the previous

clauses have been utilized for many years by Defense Fuel Supply Center

as deviations to FAR. An initial regulatory flexibility analysis has,

therefore, not been performed.

C. Paperwork Reduction Act

The final rule does not impose any reporting or record keeping

requirements which require the approval of OMB under 44 U.S.C. 3501, et

seq.

List of Subjects in 48 CFR Part 5452

Government procurement.

Accordingly, 48 CFR Chapter 54 is added to read:

CHAPTER 54--DEFENSE LOGISTICS AGENCY, DEPARTMENT OF DEFENSE

PART 5452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 5452.2--Texts of Provisions and Clauses

5452.249 Allocation

Authority: 5 U.S.C. 301, 10 U.S.C. 2202, 48 CFR part 1, subpart

1.3 and 48 CFR part 201, subpart 201.3

5452.249 Allocation

The Defense Fuel Supply Center is authorized to use the following

clause in domestic and overseas petroleum solicitations/contracts,

including those for Canal Zone and Puerto Rico, when a fixed-price

contract is contemplated and the contract amount is expected to exceed

the small purchase limitation.

Allocation (DFSC 1995) (Deviation) (9F01)

(a) Reduced Supplies.

If, for any cause beyond the control and without the fault or

negligence of the Contractor, the total supply of crude oil and/or

refined petroleum product is reduced below the level that would have

otherwise been available to the Contractor, the Contractor allocates

to its regular customers its remaining available supplies of crude

oil or product, then the Contractor may also allocate to the U.S.

Government supplies to be delivered under this contract, provided--

(1) Prompt notice of and evidence substantiating the necessity

to allocate and describing the allocation rate for all the

Contractor's customers are submitted to the Contracting Officer;

(2) Allocation among the Contractor's regular customers is made

on a fair and reasonable basis (except where allocation on a

different basis is required by a governmental authority, agency or

instrumentality); and

(3) Reduction of the quantity of product due the Government

under this contract shall not exceed the pro rata amount by which

the Contractor reduces delivery to its other contractual customers.

(b) Additional Supplies.

If, after the event causing the shortage of crude oil and/or

refined petroleum product as described in (a) above, additional

supply becomes available to the Contractor, the Contracting Officer

may choose any one of the following three possible courses of

action:

(1) Accept an updated pro rata reduction as outlined in (a);

(2) Determine that continuance of the contract with the

quantities as originally stated in the Schedule is in the best

interests of the Government; or

(3) Terminate the contract as permitted in (d)

below. [[Page 21993]]

(c) Reduced Deliveries.

If the Contractor believes that a law, regulation, or order of a

foreign government requires the Contractor to deliver less than the

quantity set forth in the Schedule for any location within that

country, the Contractor may request allocation in accordance with

(a) above. In addition to the criteria in (a) above, the

Contractor's request shall cite--

(1) The law, regulation or order, furnishing copies of the same;

(2) The authority under which is imposed; and

(3) The nature of the Government's waiver, exception, and

enforcement procedure.

The Contracting Officer will promptly review the matter and

advise the Contractor whether or not the need to allocate has been

substantiated. If the law, regulation, or order requiring the

Contractor to reduce deliveries ceases to be effective, the

Contractor shall resume deliveries in accordance with the original

Schedule.

(d) If, as a result of reduced deliveries permitted by (a), (b),

or (c) above, the Contracting Officer decides that continuation of

this contract is no longer in the best interests of the Government,

the Government may terminate this contract or any quantity

thereunder, by written notice, at no cost to the Government.

However, the Government shall not be relieved of its obligation to

pay for supplies actually delivered to and accepted by it.

(e) Except as otherwise stated in (b) above, any volumes omitted

pursuant to (a) or (b) above shall be deleted from this contract,

and the Contractor shall have no continuing obligation, so far as

this contract is concerned, to make up such omitted supplies.

(f) For Posts, Camps, and Stations contracts, Department of

Energy priority orders and allocation regulations will take

precedence over any conflicting provisions of this clause.

(g) For Bulk Fuels contracts, the provisions contained in (a)

and (b) above shall be inoperative when the Secretary of Defense

makes a written determination that it is essential to the National

Defense that the Defense Fuel Supply Center be provided contract

volumes exceeding the pro rata amount of product to which it would

otherwise be entitled. However, in no case will the Contractor be

required, under this contract, to supply more than 100% of the

quantity specified in the Schedule.

[end of clause]

Dated: April 24, 1995.

Margaret J. Janes,

Assistant Executive Director (Procurement Policy).

[FR Doc. 95-10761 Filed 5-3-95; 8:45 am]

BILLING CODE 5000-04-M