Program for Qualifying DOD, Motor Common Carriers of Perishable Subsistence and Bulk Fuel

DEPARTMENT OF DEFENSE

Department of the Army

32 CFR Part 619

Program for Qualifying DOD, Motor Common Carriers of Perishable

Subsistence and Bulk Fuel

AGENCY: Military Traffic Management Command, DOD.

ACTION: Proposed rule.

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SUMMARY: This action revises the qualifications standards to the basic

agreement between the Military Traffic Management Command and Motor

Common Carriers for Approval to Transport General Commodities for and

on behalf of U.S. Department of Defense. This action also updates the

basic agreement between the Military Traffic Management Command and

Motor Common Carriers for Governing the Transportation of Hazardous

Material other than Class A and B Explosives for and on Behalf of the

U.S. Department of Defense. The proposal to amend those qualifications,

where appropriate, are submitted to be consistent with the program

qualifications for DOD Motor Common Carriers of Perishable Subsistence

and Bulk Fuel.

DATES: Comments must be received by July 29, 1996.

ADDRESSES: Headquarters, Military Traffic Management Command, ATTN:

MTOP-Q, 5611 Columbia Pike, Falls Church, Virginia 22041-5050.

FOR FURTHER INFORMATION CONTACT:

Mr. Rick Wirtz at (703) 681-6393; Headquarters, Military Traffic

Management Command, ATTN: MTOP-QQ, 5611 Columbia Pike, Falls Church,

Virginia 22041-5050.

SUPPLEMENTARY INFORMATION: Basic information on the Carrier

Qualification Program was previously published in the Federal Register,

53 FR 17970, 54 FR 17070, 54 FR 27667, 55 FR 7361, 55 FR 52976, 56 FR

45895, and 57 FR 11376.

Executive Order 12219

This proposed rule was reviewed under Executive Order 12219 and the

Secretary of the Army has classified this action as non major. The

effect of the rule on the economy will be less than $100 million.

Regulatory Flexibility Act

This rule has been reviewed with regard to the requirements of the

Regulatory Flexibility Act of 1980 and the Secretary of the Army has

certified that this action does not have a significant impact on a

substantial number of small entities. The objective of the program is

to ensure that DOD obtains safe, dependable and reliable transportation

services. The requirements are not designed to preclude participation

by small business. Rather, they are part of a mechanism designed to

ensure that the traffic offered to small businesses does not exceed

their capabilities. The program's reporting and record keeping

requirements are essentially administrative in nature and do not demand

significant expenditures of resources such as personnel, computer

equipment, or software. No professional or technical training is

necessary to comply with these requirements. Alternatives to facilitate

entry of small businesses have been identified and implemented.

Paperwork Reduction Act

This rule has been approved by the Office of Management and Budget

as required under the requirements of the Paperwork Reduction Act of

1980 (44 U.S.C. 3507).

List of Subjects in 32 CFR Part 619

Common carriers, Freight, Motor vehicle, Safety, Shipping, and

Trucks.

Accordingly, Title 32, Part 619, of the Code of Federal Regulations

is amended by the following changes:

PART 619 [AMENDED]

1. The authority citation for part 619 continues to read as

follows:

Authority: 49 U.S.C. 1801-1813, 2503, 2505, and 2509.

2. In Sec. 619.4, the Insurance--Public liability and cargo text is

amended by revising paragraphs (b), introductory text, (b) (3) and (4)

as follows:

Sec. 619.4 Insurance--public liability and cargo.

* * * * *

(b) Cargo. Motor common carriers, surface freight forwarders,

shipper agents and air freight forwarders must have their insurance

company provide a certificate of insurance form. The deductible portion

will be shown on the certificate. The insurance underwriter must have a

policyholder's rating in the Best's Insurance Guide, listed in the

Fiscal Service Treasury Department Circular 570, Listing of Surety

Companies or specifically approved by HQMTMC. DOD's minimum cargo

insurance requirements are listed below.

* * * * *

(3) Perishables carriers--$10,000 per shipment.

(4) Bulk Fuel carriers--$10,000 per shipment.

* * * * *

3. Appendix A to Part 619 is revised to read as follows:

Appendix A to Part 619--Basic Agreement Between the Military Traffic

Management Command and Motor Common Carriers for Approval To Transport

General Commodities for and on Behalf of U.S. Department of Defense.

1. The undersigned, who is duly authorized and empowered to act

on behalf of ____________ (Name of Company, Typed or Legibly

Printed), hereinafter called the carrier, as a prerequisite for

approval to transport general commodities for the account of the

Department of Defense (DOD) and the Military Traffic Management

Command (MTMC), hereinafter called the Government, agree to comply

with all additional requirements, terms and conditions as set forth

in this Agreement. This Agreement governs the transportation of all

DOD general commodity freight administered by the Carrier

Qualification Division, MTMC (except used household goods).

Noncompliance by the carrier with any provision of this Agreement

may result in MTMC taking action against the carrier under the

Carrier Performance Program, governed by MTMC Regulation 15-1, and

revoking approval to participate in this traffic. If the carrier's

approval is revoked, the carrier may be disqualified from further

participation in any DOD Freight Traffic.

2. Approval and Revocation. a. Carrier understands that its

initial approval and

[[Page 33410]]

retention of approval are contingent upon establishing and

maintaining, to MTMC's satisfaction, sufficient resources to support

its propose scope of operations and services. Sufficient resources

include equipment, personnel facilities, and finances to handle

traffic anticipated by DOD/MTMC under the carrier's proposed scope

of operations in accordance with the service requirements of the

shipper.

b. The carrier understands that MTMC may revoke approval at any

time upon discovery of grounds for ineligibility or

disqualification. The carrier further understands that it is not

authorized to submit tenders for shipments requiring a

Transportation Protective Service (TPS) until it has served DOD in

an approved status for 12 continuous months. Prior to being allowed

to handle shipments which require a TPS or classes A & B explosives,

the carrier must first meet any additional requirements in effect at

the time.

c. In addition to the initial evaluation, the carrier agrees

that it will cooperate with MTMC follow-up evaluations at any time

subsequent to signing this Agreement to confirm continued

eligibility.

d. The carrier certifies that neither the owners, company,

corporate officials, nor any affiliation or subsidiary thereof are

currently debarred or suspended, disqualified by a MTMC General

Freight Board, or placed in non-use by MTMC from doing business with

DOD.

3. Lawful Performance.

a. Carrier agrees to comply with all applicable Federal, State,

municipal, and other local laws and regulations governing the safe,

proper, and lawful operation of motor vehicles, to include Title 49

Code of Federal Regulations (CFR) 386-397. Intrastate carriers are

required to comply with all applicable state or federal regulations,

whichever are more stringent.

b. No fines, charges, or assessments for overload vehicles or

other violations of applicable laws and regulations will be passed

to or be paid by any agency of the Federal Government.

4. Operating Authority. Carrier agrees to maintain valid motor

common carrier operating certificates for its scope of operations.

Any carrier found to be involved in brokerage, as defined by the

Interstate Commerce Commission (ICC), of DOD freight traffic will

have its approval revoked.

5. Insurance. a. Minimum public liability insurance requirements

are prescribed in title 49 of the Code of Federal Regulations (CFR)

5387.9. Carrier agrees to ensure that the ICC is provided proof of

their public liability insurance, in the form of a BMC 91 or 91-X,

or MCS 90, in accordance with sections 29 and 30 of the Motor

Carrier Act of 1980. Further, the motor carrier agrees to provide

MTMC with a certificate of insurance form. The certificate holder

block of the form will indicate that MTMC, 5611 Columbia Pike, Falls

Church, Virginia 22041-5050, ATTN: MTOP-QQ, will be notified in

writing, 30 days in advance of any change or cancellation. The

deductible portion will be shown on the certificate. The insurance

underwriter must have a policy holder's rating of ``Excellent'' or

better in the Best's Key Rating Guide.

(1) The carrier agrees to also file with MTMC proof of: $750,000

per vehicle for property (excluding hazardous) and $1,000,000 per

vehicle for oil, hazardous wastes, hazardous materials and hazardous

substances defined in 49 Code of Federal Regulations (CFR) 171.8 and

listed in 49 CFR 172.101.

(2) Public liability insurance Intrastate Carriers--Public

liability insurance shall be that as required by the state, except

that for deregulated states, public liability shall be the same as

that required of interstate carriers.

(3) Cargo insurance. Cargo insurance in the minimum $150,000 for

loss and damages of government freight per vehicle and/or $20,000

per vehicle and/or $20,000 per vehicle transported (e.g. automobile

transporters or vehicles in haulaway service) must be maintained.

Perishable carriers will maintain, as a minimum, cargo insurance in

the amount of $10,000 per shipment and bulk petroleum carriers will

maintain $10,000 per shipment.

b. The insurance, carrier in the name of the carrier, will be in

force at all times while this Agreement is in effect or until such

time as the carrier cancels all tenders. The carrier agrees to

ensure that the policies include a provision requiring the insurer

to notify MTMC prior to any performance of service for the carrier.

Charges, renewals, and cancellation notices must also be sent to

MTMC, 5611 Columbia Pike, Falls Church, Virginia 22041-5050, ATTN:

MTOP-QQ. This requirement applies to both interstate and intrastate

carriers. Carrier's insurance policy(s) must cover all equipment

used to transport DOD freight.

6. Performance Bond. a. Carrier agrees to provide MTMC with a

Performance Bond. The bond secures performance and fulfillment of

the carrier obligation to deliver DOD freight to destination. It

will cover DOD re-procurement costs as a result of carrier default,

abandoned shipments, or bankruptcy. The bond will not be utilized

for operational problems such as late pick up or delivery, excessive

transit time, refusals, no shows, improper/inadequate equipment or

claims for lost or damaged cargo. The bond must be issued by a

surety company listed in the Fiscal Service Treasury Department

Circular No. 570. The bond must be completed on the form provided by

MTMC. The bond will be continuous until canceled. MTMC will be

notified in writing 30 days in advance of any change or

cancellation. A letter of intent by the surety company is required

with the initial application package. Upon MTMC approval, the

carrier agrees to submit the Performance Bond before the Tender of

Service will be accepted.

b. The sum of the bond will be determined as follows:

(1) Carriers having done business in their own name with DOD for

3 years or more will be required to submit a Performance Bond in the

amount of 2.5% of their total DOD revenue, taken from the Freight

Information Systems Report (FINS), for the previous 12 months, not

to exceed $100,000 and not less than $25,000.

(2) New carriers and those carriers having done business in

their own name with the DOD for less than 3 years will be required

to submit a Performance Bond based on areas of service they offer.

Areas of service will be computed as both origins and destinations

served. 1 state (including intrastate)--$25,000; 2 to 3 states--

$50,000; 4 or more states--$100,000.

(3) Once a carrier has been doing business with the DOD for 3

years, their bond requirement will change from area of service to

percent revenue.

c. Bulk fuel carriers and Perishable carriers will be required

to submit a $25,000 Performance Bond.

d. Local drayage and commercial zone carriers are exempt from

the bond requirement.

e. If carrier has secured the Performance Bond as a result of

qualifying under Ammunition and Explosive, Classes A and B program

or hazardous materials, other than ammunition and explosives,

Classes A and B program no additional Performance Bond is required.

7. Safety. a. Carrier will not have an ``unsatisfactory'' safety

rating with the Federal Highway Administration, Department of

Transportation, and, if it is an intrastate motor carrier, with the

appropriate state agency. The carrier further agrees to permit

unannounced safety inspections of its facilities, terminals,

equipment, employees, and procedures by DOD civilian, military

personnel, or DOD contract employees. The inspection may include in-

transit surveillance of vehicles and drivers. The carrier agrees to

provide evidence that fulfills the requirement set forth in 49 Code

of Federal Regulations parts 390 through 396. Inspection of carrier

equipment, drivers' records, route plans and inspection reports will

be permitted during both the pickup and delivery of shipments and in

coordination with local police or other authorities while in

transit. Carrier also agrees to allow inspection of carrier records

and individual driver qualification files. When requested, carrier

agrees to provide adequate evidence of an active driver safety,

security training and evaluation program. Upon request, the

information to permit MTMC to verify or inspect carrier and driver

records.

b. The carrier agrees to have in place a company-wide safety

management program. Carrier safety program will comply with

applicable Federal, State, and local statutes or requirements.

Safety programs at the company-wide level may be subject to

evaluation by DOD representatives.

c. The carrier agrees to notify, within 24 hours, the consignor

and consignee named by the Government Bill of Lading (GBL) or

Commercial Bill of Lading (CBL) of cargo loss, damage, or unusual

delay. Information reported will include origin/destination, GBL/CBL

number, shipping paper and other pertinent accident details. When

requested, carrier agrees to furnish MTMC a copy of accident reports

submitted to the Department of Transportation on Form MCS 50-T

(Property).

8. Drivers Requirement. a. The carrier agrees to ensure that any

driver used by the carrier to transport DOD freight possesses a

valid commercial driver's license (in compliance with Federal

Commercial Motor

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Vehicle Safety Act of 1986) issued by his or her state of domicile.

Drivers must have a minimum 1 year of driving experience driving

equipment similar to that used to transport DOD freight, or have

proof of graduation from an accredited trade truck motor driving

school, operating the aforementioned equipment.

b. The carrier agrees to further ensure that driver carry a

company picture identification card to verify affiliation with the

carrier named on the Government Bill of Lading.

9. Equipment. The carrier is prohibited from using trip-leased

equipment or drivers, except upon prior approval from MTMC. Leases

of less than 30 days are considered trip-leases. In order to trip-

lease, a carrier must apply for approval under MTMC's trip-lease

program. In order to trip-lease, a carrier must apply for approval

under MTMC's trip-lease program.

10. Shipment. The carrier agrees to provide, at no additional

cost to the government, the status of any shipment within 24 hours

after an inquiry is made. Further, the carrier agrees to not divulge

any information to unauthorized persons concerning the nature and

movement of any DOD shipment.

11. Documentation. a. The carrier agrees to accept GBLs and CBLs

on which freight charges will be paid by the Government, and be

bound by all terms stated on the SF 1103, Government Bill of Lading,

regardless of the type of bill of lading tendered.

b. The carrier agrees to comply with the documentation prelodge

procedures in effect at Military Ocean Terminals or the

installation, when cargo is consigned for further movement overseas.

(Prelodging is the submission of advance shipment documents which

identifies the shipment to the Military Ocean Terminal prior to

delivery of the cargo at the terminal.) Instructions will be

provided by the consignor to furnish certain data at least 24 hours

in advance of cargo delivery to the terminal.

12. Loss of Damage. The carrier agrees to be liable for loss or

damage to cargo in accordance with the provisions of 49 U.S.C. 11707

(the Carmack Amendment to the Interstate Commerce Act). Carrier

agrees to promptly settle uncontested claims for loss or damage.

13. Standard Tender of Service. a. The carrier agrees to comply

with the preparation and filing instructions in applicable freight

traffic rules publications issued by MTMC. Carrier understands that

MTMC will reject tenders not in compliance with these instructions.

b. Carrier agrees to provide a street address where the company

office is located in lieu of a post office box number. Carrier

agrees to provide the address prior to or in conjunction with

submission of any tenders or other rate schedules. The carrier

agrees to also advise MTMC of any change in address prior to the

effective date of the change. Failure to do so is grounds to

discontinue use of the carriers.

c. Carrier understands that tenders inadvertently accepted and

distributed for use and not in compliance with this agreement, the

provisions contained in the Standard Tender of Freight Services (MT

Form 364-R), or the applicable MTMC Freight Traffic Rules

Publication, and supplements thereof, will be subject to immediate

removal or non-use until corrections are made. The issuing carrier

tender will be placed in an inactive status.

14. Rates. a. Carrier agrees to transport Government shipments

at the lowest tender rate specifically applicable to the department

or agency involved.

b. Carrier agrees to publish guaranteed through rates for at

least 30 days. These rates must be filed with MTMC, HQ, Eastern

Area, ATTN: MTE-IN, Bayonne, New Jersey 07002-5302. The carrier must

publish all rates, charges, and accessorial services on a MTMC

approved form, and must comply with the tender preparation

instructions. (Only services annotated with a charge in the tender

will be paid by the shipper.)

15. Carrier Performance. Carrier agrees that carrier's

equipment, performance, and standards of service will conform with

its obligations under Federal, State and local law and regulation as

well as with the guidelines found in the Defense Traffic Management

Regulation (DTMR) and this Agreement. The carrier fully understands

its obligation to remain current in its knowledge of service

standards. The carrier accepts the government's right to revoke

approval, declare ineligible, non-use, or disqualify the carrier for

unsatisfactory service for any operating deficiency, noncompliance

with terms of this Agreement or terms of any negotiated agreements,

tariffs, tenders, bills of lading or similar arrangements

determining the relationship of the parties, or for the publications

or assessment of unreasonable rates, charges, rules, descriptions

classifications, practices, or other unreasonable provisions of

tariffs/tenders. Rules governing the Carrier Performance Program are

found in MTMC Regulation 15-1, and Army Regulation 55-355, DTMR. If

a carrier is removed or disqualified for 6 months or more, it will

have to be re-qualified.

16. General Provisions. The carrier agrees to possess a valid

Standard Carrier Alpha Code (SCAC). When a company holding the

appropriate authority has operating divisions each with its own

unique SCAC, each such division is required to execute a separate

agreement with MTMC governing the transportation of protected

commodities.

17. Terms of the Agreement. a. The terms of this Agreement will

be applicable to each shipment.

b. This agreement shall be effective from the date of approval

by MTMC, until terminated. Termination is effective upon receipt of

written notice by either party.

c. Nothing in this Agreement will be construed as a guarantee by

the Government of any particular volume of traffic.

d. The carrier agrees to immediately notify MTMC of any changes

in ownership, in affiliations, executive officers, and/or board

members, and carrier name. Carrier understands that failure to

notify MTMC shall be grounds for immediate revocation of the

carrier's approval and their participation in the movement of DOD

freight.

18. Additional Specialized Requirements. The terms of this

Agreement will not prevent different or additional requirements with

respect to negotiated agreements or added requirements for other

types of service and/or commodities.

19. Inquiries. Inquiries may be referred to: Commander, Military

Traffic Management Command, ATTN: MTOP-QQ, 5611 Columbia Pike, Falls

Church, VA 22041-5050.

20. Carrier Acknowledgment and Acceptance. The certifying

carrier official agrees to ensure that the appropriate company

officials and employees are familiar with the requirements, terms,

and conditions of this Agreement and are in full compliance with the

applicable provisions herein. Any information found to be falsely

represented in the Motor Carrier Qualification Form, the attachments

or during the qualification procedures, to include additional

requirements of this Agreement, shall be grounds for automatic

revocation of this Agreement and immediate non-use of the carrier,

the affiliated companies, divisions and entities.

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(Typed Name and Title of Carrier Official) verify under penalty of

perjury under the laws of the United States of America, that the

information contained in the carrier qualification application

packet and this Agreement is true, correct and complete. If

representing a company or organization, I certify that I am

qualified and authorized to offer this information. I know that

willful misstatements or omissions of material facts constitute

Federal criminal violations punishable under 18 U.S.C. 1001 by up to

5 years imprisonment and fines up to $10,000 for each offense, or

punishable as perjury under 18 U.S.C. 1621 by fines up to $2,000 or

imprisonment up to 5 years for each offense. Further I understand

the requirements of this Agreement and on behalf of

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(Typed Name of Carrier and MC Number) agree to comply with the terms

and conditions contained herein. Signature of Carrier Official and

Title

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Date

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Carrier Address

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Telephone number

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24 hr Emergency Number

(________, ________) Interstate Operating Authority Certificate

Number--MC

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Intrastate Operating Authority

4. Appendix C to part 619 is revised as follows:

Appendix C to Part 619--Agreement Between the Military Traffic

Management Command and Motor Common Carriers Governing the

Transportation of Hazardous Material Other Than Class A and B

Explosives for and on Behalf of the U.S. Department of Defense.

1. I, the undersigned, who is duly authorized and empowered to

act on behalf

[[Page 33412]]

of ________________________________________, hereinafter called the

carrier to transport hazardous materials, (other than class A and B

explosives), as defined in 49 Code of Federal Regulations (CFR)

172.3. Hazardous commodities in bulk include, but not limited to,

such items as gasoline, kerosene, lubricating oil, turbine fuel and

fuel oil, for the account for the DOD and the Military Traffic

Management Command (MTMC), hereinafter called the Government, agrees

to comply with all additional requirements, terms and conditions as

set forth in this Agreement. If the carrier wishes to participate in

DOD traffic, which requires a protective service, the carrier must

also be a party to and in full compliance with requirements

contained in the Agreement governing shipments which required a

Transportation Protective Service (TPS). Noncompliance by the

carrier with any provision of this or any other Agreement it is a

party to will be sufficient grounds for immediate revocation of the

carrier's approval to participate in the movement of hazardous

materials. This carrier may also be subject to further action under

the carrier Performance Program, governed by MTMC Regulation 15-1,

which could result in nationwide disqualification on all DOD freight

shipments.

2. Approval and Revocation. a. Carrier understands that its

initial approval and retention of approval are contingent upon

establishing and maintaining to MTMC's satisfaction, sufficient

resources to support its proposed scope of operations and services.

Sufficient resources include equipment, personnel, facilities, and

finances to handle traffic anticipated by DOD/MTMC under the

carrier's proposed scope of operations in accordance with the

service requirements of the shipper.

b. The carrier understands that MTMC may revoke approval at any

time upon discovery of grounds for ineligibility or

disqualification. The carrier further understands that it is not

authorized to submit tenders for shipments requiring a TPS until it

has served DOD in an approved status for 12 continuous months. Prior

to being allowed to handle shipments which require a TPS or class A

and B explosives, the carrier must first meet any additional

requirements in effect at that time.

c. In addition to the initial evaluation, the carrier agrees

that it will cooperate with MTMC follow-up evaluations at any time

subsequent to signing this agreement to confirm continued

eligibility.

d. The carrier certifies that neither the owners, company,

corporate officials, nor any affiliation or subsidiary thereof are

currently debarred or suspended, disqualified by a MTMC General

Freight Board, or placed in non-use by MTMC from doing business with

DOD.

3. Lawful Performance. a. Carrier agrees to comply with all

applicable Federal, State, municipal, and other local law and

regulations governing the safe, proper, and lawful operation of

motor vehicles, to include Title 49 Code of Federal Regulations

(CFR) 177 and 386 through 397. Provisions for exempt intricate

operations as defined in 49 CFR will not apply to the transpiration

of explosives for the DOD. Intrastate carries are required to comply

with all applicable state or federal regulations, whichever are more

stringent.

b. No fines, charges, or assessments for overloaded vehicles or

other violations of applicable laws and regulations will be passed

to or be paid by any agency of the Federal Government.

4. Operating Authority. Carrier agrees to maintain valid Motor

Common Carrier operating certificates for its scope of operations

which is not restricted against the handling and transport of

hazardous materials or ammunition and explosives, class A and B. Any

carrier found to be involved in brokerage, as defined by the

Interstate Commerce Commission (ICC), of DOD freight traffic will

have its approval revoked.

5. Insurance. a. Minimum public liability insurance requirements

are prescribed in title 49 of the Code of Federal Regulations (CFR)

387.9. Carrier agrees to ensure that the ICC is provided proof of

their public liability insurance, in the form of a BMC 91 or 91-X,

or MCS 90, in accordance with sections 29 and 30 of the Motor

Carrier Act of 1980. Further, the Motor carrier agrees to provide

MTMC with a certificate of insurance form. The certificate holder

block of the form will indicate that MTMC, ATTN: MTOP-QQ, will be

notified in writing, 30 days in advance of any change or

cancellation. The deductible portion will be shown on the

certificate. The insurance underwriter must have a policy holder's

rating in the Best's Insurance Guide, listed in the Fiscal Service

Treasury Department Circular 570, Listing of surety companies.

b. The carrier agrees to also file with MTMC proof of:

(1) Interstate Public Liability. Carrier will ensure that its

insurance company(s) file with MTMC proof of public liability and

property damage insurance for the transportation of hazardous

commodities in the minimum and amounts prescribed in 49 CFR 387.9.

(2) Intrastate Public Liability. Carrier will ensure that its

insurance company(s) file with MTMC proof of insurance which meets

the estate requirements for public liability and property damage for

the transportation of hazardous materials.

(3) Cargo Insurance. Carrier will also file with MTMC proof of

$150,000 per incident minimum cargo insurance for loss and bulk fuel

which is set at $10,000.

c. The insurance, carried in the name of the carrier, will be in

force at all times while this Agreement is in effect or until such

time as the carrier cancels all tenders. The carrier agrees to

ensure that the policies include a provision requiring the insurer

to notify MTMC prior to any performance of service by the carrier.

Changes, renewals, and cancellation notices must be also sent to:

MTMC, ATTN: MTOP-QQ. This requirement applies to both interstate and

intrastate carriers. Carrier's insurance policy(s) must cover all

equipment used to transport DOD freight.

6. Performance Bond. a. Carrier agrees to provide MTMC with a

Performance Bond. The bond secures performance and fulfillment of

the carrier obligation to deliver DOD freight to destination. It

will cover DOD reprocurement costs as a result of carrier default,

abandoned shipments, or bankruptcy by the carrier. The bond will not

be utilized for operational problems such as late pick up or

delivery, excessive transit time, refusals, no shows, improper/

inadequate equipment or claims for lost or damaged cargo. The bond

must be issued by a surety company listed in the Fiscal Service

Treasury Department Circular No. 570. The bond must be completed on

the form provided by MTMC. The bond will be continuous until

canceled. MTMC will be notified in writing, 30 days in advance of

any change or cancellation. A letter of intent, by the surety

company, is required with the initial application package. Upon MTMC

approval, the carrier agrees to submit the performance bond before

the Tender of Service will be accepted.

b. The sum of the bond will be determined as follows:

(1) Carriers having done business in their own name with DOD for

3 years or more will be required to submit a Performance Bond in the

amount of 2.5% of their total DOD revenue, taken from the Freight

Information Systems Report (FINS), for the previous 12-months, not

to exceed $100,000 and not less than $10,000.

(2) New carriers and those carriers having done business in

their own name with the DOD for less than 3 years will be required

to submit a Performance Bond based on areas of service they offer.

Areas of service will be computed as both origins and destinations

served.

1 state (including intrastate)--$10,000;

2 to 3 states--$50,000; and

4 or more states--$100,000.

(3) Once a carrier has been doing business with the DOD for 3

years, their bond requirement will change from areas of service to

percent revenue.

c. Bulk fuel carriers will be required to submit a $10,000

performance bond.

d. Local drayage and commercial zone carriers are exempt from

the bond requirement.

e. If carrier has secured the performance bond as a result of

qualifying under the general commodity program or class A and B

program, no additional performance bond is required.

7. Safety and Security. a. A ``unsatisfactory'' safety rating

with the Federal Highway Administration, Department of

Transportation, and/or with the appropriate state agency or

commission in the case of intrastate. Safety ratings which are

``unsatisfactory,'' ``unconditional,'' ``insufficient information,''

or ``not rated'' will not be accepted. The carrier agrees to permit

unannounced safety inspections of its facilities, terminals,

equipment, employees, and procedures by DOD civilian, military

personnel, or DOD contract employees, inspection. Inspection of

carrier equipment, drivers' records, route plans and inspection

reports will be permitted during both the pickup and delivery of

shipments and in coordination with local police or other authorities

while in transit. Carrier also agrees to allow inspection of carrier

records

[[Page 33413]]

and individual driver qualification files. When requested, carrier

agrees to provide adequate evidence of an active driver safety,

security training and evaluation program. Carrier agrees to furnish,

on request, driver's Social Security Numbers to verify their

security clearances and allow for inspection of carrier/driver

records.

b. The carrier agrees to have in place a company-wide safety and

security management program which includes specific on-going safety

and security programs for each terminal location. Individual

terminal programs will encompass planning and execution of safety

and security in routine operations, to include emergency responders

and planners, and with the local police and fire authority. Carrier

programs will incorporate compliance with all applicable Federal,

State and local statutes or requirements. Conformance with other

safety standards, such as NFPA Code 498, will be accomplished as

much as possible, with compensating measures for deviations. Safety

and security programs at the company wide or terminal level may be

subject to evaluation by a DOD representative.

c. The carrier agrees to notify, within a reasonable period of

time, the consignor and consignee names by the Government Bill of

Lading (GBL) of cargo loss, damage, or unusual delay. Carrier also

agrees to notify the consignor or consignee named on the GBL

immediately by telephone of an accident, incident or significant

delay. The information to be reported will include origin/

destination, GBL number, shipping paper information, time and place

of occurrence and other pertinent accident details. Carriers agrees

to notify the MTMC area command annotated on the GBL and the Defense

Logistics Agency (DLA), within one half (\1/2\) hour after

notification of the consignor and consignee, and provide status

updates as required. The MTMC HOTLINE and AOC telephone numbers are

as follows:

--Eastern Area: (800) 524-0331; New Jersey only: (800) 624-1361

--Western Area: (800) 331-1822; California only: (800) 348-4639

--DLA: (800) 851-8061

When requested, carrier agrees to furnish MTMC a copy of accident

reports submitted to Department of Transportation on Form MCS 50-T

(Property) or MCS 50-B (Passengers) when DOD classes A and B

explosives movements are involved.

d. Carrier agrees to provide the driver(s) transporting

protected commodities an emergency telephone number (indicated on

the last page of this Agreement) which, when used at any time (24-

hours a day, 7 days a week), will reach a qualified carrier

representative who will be able to provide information and

assistance. MTMC will be immediately notified if this telephone

number is changed. Carrier also agrees to equip the vehicle

transporting the material with communications equipment (citizens

band radio, mobile phone, etc.) capable of being used to obtain

assistance in an emergency.

e. Carriers approved to transport DOD hazardous materials

requiring TPS agree that no driver disqualified under 49 CFR 391.15

will be permitted to operate any vehicle transporting such

commodities.

f. Carriers approved to transport DOD hazardous materials agree

to ensure that drivers of a motor vehicle transporting such drivers

of motor vehicle transporting such commodities must undergo a

physical examination and must be certified physically qualified to

drive a commercial motor vehicle in accordance with 49 CFR 391.43.

Carrier also agrees to have driver screening programs in place to

ensure that the provisions of this paragraph are met.

8. Drivers Requirement. a. Driver agrees to ensure that the

driver(s) employed to transport hazardous commodities driving

experience (using similar equipment prior to transporting hazardous

commodities, and that its drivers are trained and competent in the

movement of these commodities to include an understanding of the

following: 49 CFR part 397, instructions on procedures to be

followed in the event of a delay, nature of the materials being

transported, precautions to be taken in an emergency; written route

plans; and shipping paper entries. The carrier will certify that the

driver is trained and competent in the movement of hazardous

commodities, and proof of certification must be carrier in the

vehicle of the unit transporting these commodities.

b. The carrier agrees to further ensure that driver(s) carry a

valid commercial motor vehicle operator's license issued by his/her

state of domicile, a certificate of physical examination issued

during the preceding 24 months, and an employee record card, or

similar document, one of which must contain the driver's photograph.

The driver(s) must be 21 years of age. The driver(s) must carry a

company picture identification to verify affiliation with the

carrier named on the GBL.

9. Equipment. a. Trip leased equipment, with or without drivers,

will not be used to transport hazardous materials for the account of

the DOD. Exceptions for the use of intermittent or occasional

drivers in 49 CFR 391.63 will not apply to any DOD movement. Any

equipment, with or without drivers, leased to augment carrier-owned

equipment will be on a not less than 90-day noncancellable basis.

b. A copy of the equipment lease agreement must be carried in

the vehicle of the unit transporting these commodities. (Facsimile,

Xerox, or otherwise reproduced copies are not acceptable.)

Interchange agreements which originate at origin will be considered

trip leases and will not be accepted. The lease must be complete at

time of pick up and should require no further information to be

completed by the driver. Failure to comply with this requirement or

attempted abuse of this requirement could result in the carrier's

participation in this type traffic to be immediately revoked and up

to a nationwide disqualification on all DOD freight shipments should

further action under the Carrier Performance Program be deem

appropriate.

c. Carriers approved to transport DOD hazardous material

requiring TPS agree to comply with all equipment requirements

contained in paragraph 8 of the Agreement Between the Military

Traffic Management Command and Motor Carriers Governing the

Transportation of Shipments Which Require a Transportation

Protective Service for and on behalf of the U.S. Department of

Defense.

10. Shipment. a. Carrier is responsible for shipments from

origin to ultimate destination. The carrier also remains responsible

for shipments placed in a safe haven or refuge location. Carrier

agrees not to disclose any information to unauthorized persons

concerning the nature, kind, quantity, destination, consignee or

routing of any hazardous material shipment tendered to it. The

carrier further agrees to provide, at no additional cost to the

Government, the status of any shipment within 24-hours after an

inquiry is made.

b. Carrier agrees to ensure that shipper-provided placards are

displayed in accordance with the general requirements found in 49

CFR 172.504 for the transportation of hazardous materials. The

carrier further agrees to conform to the requirements found in 49

CFR 177.825 pertaining to the transportation of radioactive

materials for which placarding is required. Carrier also agrees to

route all other shipments of hazardous commodities in accordance

with the provisions of 49 CFR 397.9.

c. When requested by the shipper for reasons of security,

carrier agrees to cover the shipment with a carrier-provided

tarpaulin. Protective tarping is an accessorial service.

d. Carriers approved to transport DOD hazardous materials

requiring TPS agree to comply with all shipment requirements

contained in paragraph 9 of the Agreement Between the Military

Traffic Management Command and Motor Common Carriers Governing the

Transportation of Shipments Which Require a Transportation

Protective Service (TPS) for and on behalf of the U.S. Department of

Defense.

11. Documentation. a. The carrier agrees to accept GBLs on which

freight charges will be paid by the Government, and bound by all

terms stated on the Standard Form (SF)-1103, GBL, regardless of the

type of bill of lading tendered.

b. The carrier will comply with the documentation prelodge

procedures in effect at Military Ocean Terminals or the

installation, when cargo is consigned for further movement overseas.

(Prelodging is the submission of advance shipment documents which

identifies the shipment to the Military Ocean Terminal prior to

delivery of the cargo at the terminal.) Instructions will be

provided by the consignor to furnish certain data at least 24-hours

in advance of cargo delivery to the terminal.

12. Loss or Damage. The carrier agrees to be liable for loss or

damage to cargo in accordance with the provisions of 49 U.S.C. 11707

(the Carmack Amendment to the Interstate Commerce Act.) Carrier

agrees to promptly settle uncontested claims for loss or damage.

13. Standard Tender of Service. a. The carrier agrees to comply

with the preparation and filing instructions in applicable freight

traffic rules publications issued by MTMC. Carrier understands that

MTMC will reject tenders not in compliance with these instructions.

b. Carrier agrees to provide a street address where the company

office is located in lieu of post office box number. Carrier agrees

to provide the address prior to or in conjunction

[[Page 33414]]

with submission of any tenders or other rate schedules. The carrier

agrees to also advise MTMC of any change in address prior to the

effective date of the change. Failure to do so is grounds to

discontinue use of the carriers.

c. Carrier understands that tenders inadvertently accepted and

distributed for use and not in compliance with this agreement, the

provisions contained in the Standard Tender of Freight Services (MT

Form 364-R), or the application MNC Freight Traffic Rules

Publication, and supplements thereof, will be subject to immediate

removal or non-use until corrections are made. The issuing carrier

will be advised when tenders are removed under these circumstances.

14. Rates. a. Carrier agrees to transport shipments at the

lowest tender rate specifically applicable to the department or

agency involved.

b. The carrier's rates must be on file with MTMC, HQ Eastern

Area, ATTN: MTE-IN, Bayonne, New Jersey 07002-5302. The carrier must

publish all rates, charges, and accessorial services on a

``Department of Defense Standard Tender of Freight Services'' MT

Form 364-R and must comply with the tender preparation instructions.

(Only services annotated with a charge in the tender will be paid by

the shipper.)

15. Carrier Performance. Carrier agrees that carrier's

equipment, performance and status of service will conform with its

obligations under Federal, State and local law and regulation as

well as with the guidelines found in the Defense Traffic Management

Regulation (DTMR) and this Agreement. The carrier fully understands

its obligation to remain current in its knowledge of service

standards. The carrier accepts the Government's right to revoke

approval, declare ineligible, non-use, or disqualify the carrier for

unsatisfactory service for any operating deficiency, noncompliance

with the terms of this Agreement or terms of any negotiated

agreements, tariffs, tenders, bills of lading or similar

arrangements determining the relationship of the parties, or for the

publication of unreasonable rates, charges, rules, descriptions,

classifications, practices, or other unreasonable provisions of

tariffs/tenders. Rules governing the Carrier Performance Program are

found in MTMC Regulation 15-1, and Army Regulations 55-355 DTMR. If

a carrier is removed or disqualified for 6 months or more, it will

have to be re-qualified.

16. General Provisions. The carrier must possess a valid

Standard Carrier Alpha Code (SCAC). When a company holding the

appropriate authority has operating divisions, each with its own

unique SCAC, each such division is required to execute a separate

agreement with MTMC governing the transportation of protected

commodities.

17. Terms of the Agreement. a. The terms of this Agreement will

be applicable to each shipment.

b. This agreement shall be effective from the date of approval

by MTMC, until terminated. Termination is effective upon receipt of

written notice by either party.

c. Nothing in this Agreement will be construed as a guarantee,

by the Government, of any particular volume of traffic.

d. The carrier agrees to immediately notify MTMC of any changes

in ownership, in affiliations, executive officers, and/or board

members, and carrier name. Carrier understands that failure to

notify MTMC shall be grounds for immediate revocation of the

carrier's approval and their participation in the movement of DOD

freight.

18. Additional Specialized Requirements. The terms of this

Agreement will not prevent different or additional requirements with

respect to negotiated agreements or added requirements for other

types of service and/or commodities.

19. Inquiries. Inquiries may be referred to: Commander, MTMC,

Attn: MTOP-QQ, Falls Church, Virginia 22041-5050.

20. Carrier Acknowledgment and Acceptance. The certifying

carrier official agrees to ensure that the appropriate company

officials and employees are familiar with the requirements, terms

and conditions of this Agreement and are in full compliance with the

applicable provisions herein. Any information found to be falsely

represented in the Motor Carrier Qualification Form, the attachments

or during the qualification procedures, to include additional

requirements of this Agreement, shall be grounds for automatic

revocation of this Agreement and immediate non-use of the carrier,

the affiliated companies, division and entities, I,

________________________________________, verify under penalty of

perjury under the laws of the United States of America, that the

information contained in the carrier qualification application

packet and this Agreement is true, correct and complete. If

representing a company or organization, I certify that I am

qualified and authorized to offer this information. I know that

willful misstatements or omissions of material facts constitute

Federal criminal violations punishable under 18 U.S.C. 1001 by up to

5 years imprisonment and fines up to $10,000 for each offense, or

punishable as perjury under 18 U.S.C. 1621 by fines up to $2,000 or

imprisonment up to 5 years for each offense. Further, I understand

the requirements of this Agreement and on behalf of:

________________________________________ (Typed Name of Carrier and

MC Number) agree to comply with the terms and conditions contained

herein.

----------------------------------------------------------------------

(Signature of Carrier Official and Title)

Signature of Agent Official and Title:

----------------------------------------------------------------------

----------------------------------------------------------------------

Date:------------------------------------------------------------------

Address:---------------------------------------------------------------

Telephone Number: (________________)-----------------------------------

24-Hr Emergency Number:------------------------------------------------

(________________)

Interstate Operating Authority Certificate Number--MC:-----------------

Intrastate Operating Authority:----------------------------------------

Certificate Number(s) Include:-----------------------------------------

Issuing State--For Example:--------------------------------------------

PA--#12345

Military Traffic Management Command Acknowledgment/Acceptance

Signature and Title:

----------------------------------------------------------------------

Date Approved:---------------------------------------------------------

Gregory D. Showalter,

Army Federal Register Liaison Officer.

[FR Doc. 96-16147 Filed 6-26-96; 8:45 am]

BILLING CODE 3710-08-M