Voluntary Intermodal Sealift Agreement

SUMMARY: The Maritime Administration (MARAD) announces the extension of

the Voluntary Intermodal Sealift Agreement (VISA) for another two-year

period until February 13, 2001, pursuant to provision of the Defense

Production Act of 1950, as amended. The purpose of the VISA is to make

intermodal shipping services/systems, including ships, ships' space,

intermodal equipment and related management services, available to the

Department of Defense as required to support the emergency deployment

and sustainment of U.S. military forces. This is to be accomplished

through cooperation among the maritime industry, the Department of

Transportation and the Department of Defense.

FOR FURTHER INFORMATION CONTACT: Mr. Raymond Barberesi, Director,

Office of Sealift Support, Room 7307, Maritime Administration, 400

Seventh Street SW., Washington, DC 20590, (202) 366-2323, Fax (202)

493-2180.

SUPPLEMENTARY INFORMATION: Section 708 of the Defense Production Act of

1950 (50 U.S.C. App. 2158), as implemented by regulations of the

Federal Emergency Management Agency (44 CFR Part 332), ``Voluntary

agreements for preparedness programs and expansion of production

capacity and supply'', authorizes the President, upon a finding that

conditions exist which may pose a direct threat to the national defense

or its preparedness programs, ``* * * to consult with representatives

of industry, business, financing, agriculture, labor and other

interests * * *'' in order to provide the making of such voluntary

agreements. It further authorizes the President to delegate that

authority to individuals who are appointed by and with the advice and

consent of the Senate, upon the condition that such individuals obtain

the prior approval of the Attorney General after the Attorney General's

consultation with the Federal Trade Commission. Section 501 of

Executive Order 12919, as amended, delegated this authority of the

President to the Secretary of Transportation, among others. By DOT

Order 1900.8, the Secretary delegated to the Maritime Administrator the

authority under which the VISA is sponsored. Through advance

arrangements in joint planning, it is intended that participants in

VISA will provide capacity to support a significant portion of surge

and sustainment requirements in the deployment of U.S. military forces.

The text of the VISA, as published in the Federal Register on

February 13, 1997, is identical to the text published herein which will

now be extended until February 13, 2001.

The text published herein will now be implemented. Copies will be

made available to the public upon request.

Text of the Voluntary Intermodal Sealift Agreement

Voluntary Intermodal Sealift Agreement (VISA)

December 9, 1996.

Table of Contents

Abbreviations

Definitions

Preface

I. Purpose

II. Authorities

A. MARAD

B. USTRANSCOM

III. General

A. Concept

B. Responsibilities

C. Termination of Charter, Leases and Other Contractual

Arrangements

D. Modification/Amendment of This Agreement

E. Administrative Expenses

F. Recordkeeping

G. MARAD Reporting Requirements

IV. Joint Planning Advisory Group

V. Activation of VISA Contingency Provisions

A. General

B. Notification of Activation

C. Voluntary Capacity

D. Stage I

E. Stage II

F. Stage III

G. Partial Activation

VI. Terms and Conditions

A. Participation

B. Agreement of Participant

C. Effective Date and Duration of Participation

D. Participant Termination of VISA

E. Rules and Regulations

F. Carrier Coordination Agreements

G. Enrollment of Capacity (Ships and Equipment)

H. War Risk Insurance

I. Antitrust Defense

J. Breach of Contract Defense

K. Vessel Sharing Agreements

VII. Application and Agreement

Figure 1--VISA Activation Process Diagram

Abbreviations

``AMC''--Air Mobility Command

``CCA''--Carrier Coordination Agreements

``CDS''--Construction Differential Subsidy

``CFR''--Code of Federal Regulations

``CONOPS''--Concept of Operations

``DoD''--Department of Defense

``DOJ''--Department of Justice

``DOT''--Department of Transportation

``DPA''--Defense Production Act

``EUSC''--Effective United States Control

``FAR''--Federal Acquisition Regulations

``FEMA''--Federal Emergency Management Agency

``FTC''--Federal Trade Commission

``JCS''--Joint Chiefs of Staff

``JPAG''--Joint Planning Advisory Group

``MARAD''--Maritime Administration, DOT

``MSP''--Maritime Security Program

``MSC''--Military Sealift Command

``MTMC''--Military Transportation Management Command

``NCA''--National Command Authorities

``NDRF''--National Defense Reserve Fleet maintained by MARAD

``ODS''--Operating Differential Subsidy

``RRF''--Ready Reserve Force component of the NDRF

``SecDef''--Secretary of Defense

``SecTrans''--Secretary of Transportation

``USCINCTRANS''--Commander in Chief, United States Transportation

Command

``USTRANSCOM''--United States Transportation Command (including its

sealift transportation component, Military Sealift Command)

``VISA''--Voluntary Intermodal Sealift Agreement

``VSA''--Vessel Sharing Agreement

Definitions

For purposes of this agreement, the following definitions apply.

Administrator--Maritime Administrator.

Agreement--Agreement (proper noun) refers to the Voluntary

Intermodal Sealift Agreement (VISA).

Attorney General--Attorney General of the United States.

Broker--A person who arranges for transportation of cargo for a

fee.

Carrier Coordination Agreement (CCA)--An agreement between two or

more Participants or between Participant and non-Participant carriers

to coordinate their services in a Contingency, including agreements to:

(i) charter vessels or portions of the cargo-carrying capacity of

vessels; (ii) share cargo handling equipment, chassis, containers and

ancillary transportation equipment; (iii) share wharves, warehouse,

marshaling yards and other marine terminal facilities; and (iv)

coordinate the movement of vessels.

Chairman--FTC--Chairman of the Federal Trade Commission (FTC).

Charter--Any agreement or commitment by which the possession or

services of a vessel are secured for a period of time, or for one or

more voyages, whether or not a demise of the vessel.

Commercial--Transportation service provided for profit by privately

owned (not government owned) vessels to a

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private or government shipper. The type of service may be either common

carrier or contract carriage.

Contingency--Includes, but is not limited to a ``contingency

operation'' as defined at 10 App. U.S.C. 101(a)(13), and a JCS-

directed, NCA-approved action undertaken with military forces in

response to: (i) natural disasters; (ii) terrorists or subversive

activities; or (iii) required military operations, whether or not there

is a declaration of war or national emergency.

Contingency contracts--DoD contracts in which Participants

implement advance commitments of capacity and services to be provided

in the event of a Contingency.

Contract carrier--A for-hire carrier who does not hold out regular

service to the general public, but instead contracts, for agreed

compensation, with a particular shipper for the carriage of cargo in

all or a particular part of a ship for a specified period of time or on

a specified voyage or voyages.

Controlling interest--More than a 50-percent interest by stock

ownership.

Director--FEMA--Director of Federal Emergency Management Agency

(FEMA).

Effective U.S. Control (EUSC)--U.S. citizen-owned ships which are

registered in certain open registry countries and which the United

States can rely upon for defense in national security emergencies. The

term has no legal or other formal significance. U.S. citizen-owned

ships registered in Liberia, Panama, Honduras, the Bahamas and the

Republic of the Marshall Islands are considered under effective U.S.

control. EUSC registries are recognized by the Maritime Administration

after consultation with the Department of Defense. (MARAD OPLAN 001A,

17 July 1990)

Enrollment Contract--The document, executed and signed by MSC, and

the individual carrier enrolling that carrier into VISA Stage III.

Foreign flag vessel--A vessel registered or documented under the

law of a country other than the United States of America.

Intermodal equipment--Containers (including specialized equipment),

chassis, trailers, tractors, cranes and other materiel handling

equipment, as well as other ancillary items.

Liner--Type of service offered on a definite, advertised schedule

and giving relatively frequent sailings at regular intervals between

specific ports or ranges.

Liner throughput capacity--The system/intermodal capacity available

and committed, used or unused, depending on the system cycle time

necessary to move the designated capacity through to destination. Liner

throughput capacity shall be calculated as: static capacity (outbound

from CONUS) X voyage frequency X.5.

Management services--Management expertise and experience,

intermodal terminal management, information resources, and control and

tracking systems.

Ocean Common carrier--An entity holding itself out to the general

public to provide transportation by water of passengers or cargo for

compensation; which assumes responsibility for transportation from port

or point of receipt to port or point of destination; and which operates

and utilizes a vessel operating on the high seas for all or part of

that transportation. (As defined in 46 App. U.S.C. 1702, 801, and 842

regarding international, interstate, and intercoastal commerce

respectively.)

Operator--An ocean common carrier or contract carrier that owns or

controls or manages vessels by which ocean transportation is provided.

Organic sealift--Ships considered to be under government control or

long-term charter--Fast Sealift Ships, Ready Reserve Force and

commercial ships under long-term charter to DoD.

Participant--A signatory party to VISA, and otherwise as defined

within Section VI of this document.

Person--Includes individuals and corporations, partnerships, and

associations existing under or authorized by the laws of the United

States or any state, territory, district, or possession thereof, or of

a foreign country.

SecTrans--Secretary of Transportation.

Service contract--A contract between a shipper (or a shipper's

association) and an ocean common carrier (or conference) in which the

shipper makes a commitment to provide a certain minimum quantity of

cargo or freight revenue over a fixed time period, and the ocean common

carrier or conference commits to a certain rate or rate schedule, as

well as a defined service level (such as assured space, transit time,

port rotation, or similar service features), as defined in the Shipping

Act of 1984. The contract may also specify provisions in the event of

nonperformance on the part of either party.

Standby period--The interval between the effective date of a

Participant's acceptance into the Agreement and the activation of any

stage, and the periods between deactivation of all stages and any later

activation of any stage.

U.S. Flag Vessel--A vessel registered or documented under the laws

of the United States of America.

USTRANSCOM--The United States Transportation Command and its

component commands (AMC, MSC and MTMC).

Vessel Sharing Agreement (VSA) Capacity--Space chartered to a

Participant for carriage of cargo, under its commercial contracts,

service contracts or in common carriage, aboard vessels shared with

another carrier or carriers pursuant to a commercial vessel sharing

agreement under which the carriers may compete with each other for the

carriage of cargo. In U.S. foreign trades the agreement is filed with

the Federal Maritime Commission (FMC) in conformity with the Shipping

Act of 1984 and implementing regulations.

Volunteers--Any vessel owner/operator who is an ocean carrier and

who offers to make capacity, resources or systems available to support

contingency requirements.

Preface

The Administrator, pursuant to the authority contained in Section

708 of the Defense Production Act of 1950, as amended (50 App. U.S.C.

2158)(Section 708)(DPA), in cooperation with the Department of Defense

(DoD), has developed this Agreement [hereafter called the Voluntary

Intermodal Sealift Agreement (VISA)] to provide DoD the commercial

sealift and intermodal shipping services/systems necessary to meet

national defense Contingency requirements.

USTRANSCOM procures commercial shipping capacity to meet

requirements for ships and intermodal shipping services/systems through

arrangements with common carriers, with contract carriers and by

charter. DoD (through USTRANSCOM) and Department of Transportation

(DOT) (through MARAD) maintain and operate a fleet of ships owned by or

under charter to the Federal Government to meet the logistic needs of

the military services which cannot be met by existing commercial

service. Ships of the Ready Reserve Force (RRF) are selectively

activated for peacetime military tests and exercises, and to satisfy

military operational requirements which cannot be met by commercial

shipping in time of war, national emergency, or military Contingency.

Foreign-flag shipping is used in accordance with applicable laws,

regulations and policies.

The objective of VISA is to provide DoD a coordinated, seamless

transition from peacetime to wartime for the acquisition of commercial

sealift and intermodal capability to augment DoD's

[[Page 8216]]

organic sealift capabilities. This Agreement establishes the terms,

conditions and general procedures by which persons or parties may

become VISA Participants. Through advance joint planning among

USTRANSCOM, MARAD and the Participants, Participants may provide

predetermined capacity in designated stages to support DoD Contingency

requirements.

VISA is designed to create close working relationships among MARAD,

USTRANSCOM and Participants through which Contingency needs and the

needs of the civil economy can be met by cooperative action. During

Contingencies, Participants are afforded maximum flexibility to adjust

commercial operations by Carrier Coordination Agreements (CCA), in

accordance with applicable law.

Participants will be afforded the first opportunity to meet DoD

peacetime and Contingency sealift requirements within applicable law

and regulations, to the extent that operational requirements are met.

In the event VISA Participants are unable to fully meet Contingency

requirements, the shipping capacity made available under VISA may be

supplemented by ships/capacity from non-Participants in accordance with

applicable law and by ships requisitioned under Section 902 of the

Merchant Marine Act, 1936 (as amended) (46 App. U.S.C. 1242). In

addition, containers and chassis made available under VISA may be

supplemented by services and equipment acquired by USTRANSCOM or

accessed by the Administrator through the provisions of 46 CFR Part

340.

The Secretary of Defense (SecDef) has approved VISA as a sealift

readiness program for the purpose of Section 909 of the Merchant Marine

Act, 1936, as amended (46 App. U.S.C. 1248).

Voluntary Intermodal Sealift Agreement

I. Purpose

A. The Administrator has made a determination, in accordance with

Section 708(c)(1) of the Defense Production Act (DPA) of 1950, that

conditions exist which may pose a direct threat to the national defense

of the United States or its preparedness programs and, under the

provisions of Section 708, has certified to the Attorney General that a

standby agreement for utilization of intermodal shipping services/

systems is necessary for the national defense. The Attorney General, in

consultation with the Chairman of the Federal Trade Commission, has

issued a finding that dry cargo shipping capacity to meet national

defense requirements cannot be provided by the industry through a

voluntary agreement having less anticompetitive effects or without a

voluntary agreement.

B. The purpose of VISA is to provide a responsive transition from

peace to Contingency operations through pre-coordinated agreements for

sealift capacity to support DoD Contingency requirements. VISA

establishes procedures for the commitment of intermodal shipping

services/systems to satisfy such requirements. VISA will change from

standby to active status upon activation by appropriate authority of

any of the Stages, as described in Section V.

C. It is intended that VISA promote and facilitate DoD's use of

existing commercial transportation resources and integrated intermodal

transportation systems, in a manner which minimizes disruption to

commercial operations, whenever possible.

D. Participants' capacity which may be committed pursuant to this

Agreement may include all intermodal shipping services/systems and all

ship types, including container, partial container, container/bulk,

container/roll-on/roll-off, roll-on/roll-off (of all varieties),

breakbulk ships, tug and barge combinations, and barge carrier (LASH,

SeaBee).

II. Authorities

A. MARAD

1. Sections 101 and 708 of the DPA, as amended (50 App. U.S.C.

2158); Executive Order 12919, 59 FR 29525, June 7, 1994; Executive

Order 12148, 3 CFR 1979 Comp., p. 412, as amended; 44 CFR Part 332; DOT

Order 1900.8; 46 CFR Part 340.

2. Section 501 of Executive Order 12919, as amended, delegated the

authority of the President under Section 708 to SecTrans, among others.

By DOT Order 1900.8, SecTrans delegated to the Administrator the

authority under which VISA is sponsored.

B. USTRANSCOM

1. Section 113 and Chapter 6 of Title 10 of the United States Code.

2. DoD Directive 5158.4 designating USCINCTRANS to provide air,

land, and sea transportation for the DoD.

III. General

A. Concept

1. VISA provides for the staged, time-phased availability of

Participants' shipping services/systems to meet NCA-directed DoD

Contingency requirements in the most demanding defense oriented sealift

emergencies and for less demanding defense oriented situations through

prenegotiated Contingency contracts between the government and

Participants (see Figure 1). Such arrangements will be jointly planned

with MARAD, USTRANSCOM, and Participants in peacetime to allow

effective, and efficient and best valued use of commercial sealift

capacity, provide DoD assured Contingency access, and minimize

commercial disruption, whenever possible.

a. Stages I and II provide for prenegotiated contracts between the

DoD and Participants to provide sealift capacity against all projected

DoD Contingency requirements. These agreements will be executed in

accordance with approved DoD contracting methodologies.

b. Stage III will provide for additional capacity to the 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.

2. Activation will be in accordance with procedures outlined in

Section V of this Agreement.

3. Following is the prioritized order for utilization of commercial

sealift capacity to meet DoD peacetime and Contingency requirements:

a. U.S. Flag vessel capacity operated by a Participant and U.S.

Flag Vessel Sharing Agreement (VSA) capacity of a Participant.

b. U.S. Flag vessel capacity operated by a non-Participant.

c. Combination U.S./foreign flag vessel capacity operated by a

Participant and combination U.S./foreign flag VSA capacity of a

Participant.

d. Combination U.S./foreign flag vessel capacity operated by a non-

Participant.

e. U.S. owned or operated foreign flag vessel capacity and VSA

capacity of a Participant.

f. U.S. owned or operated foreign flag vessel capacity and VSA

capacity of a non-Participant.

g. Foreign-owned or operated foreign flag vessel capacity of a non-

Participant.

4. Under Section VI.F. of this Agreement, Participants may

implement CCAs to fulfill their contractual commitments to meet VISA

requirements.

B. Responsibilities

1. The SecDef, through USTRANSCOM, shall:

[[Page 8217]]

a. Define time-phased requirements for Contingency sealift capacity

and resources required in Stages I, II and III to augment DoD sealift

resources.

b. Keep MARAD and Participants apprised of Contingency sealift

capacity required and resources committed to Stages I and II.

c. Obtain Contingency sealift capacity through the implementation

of specific prenegotiated DoD Contingency contracts with Participants.

d. Notify the Administrator upon activation of any stage of VISA.

e. Co-chair (with MARAD) the Joint Planning Advisory Group (JPAG).

f. Establish procedures, in accordance with applicable law and

regulation, providing Participants with necessary determinations for

use of foreign flag vessels to replace an equivalent U.S. Flag capacity

to transport a Participant's normal peacetime DoD cargo, when

Participant's U.S. Flag assets are removed from regular service to meet

VISA Contingency requirements.

g. Provide a reasonable time to permit an orderly return of a

Participant's vessel(s) to its regular schedule and termination of its

foreign flag capacity arrangements as determined through coordination

between DoD and the Participants.

h. Review and endorse Participants' requests to MARAD for use of

foreign flag replacement capacity for non-DoD government cargo, when

U.S. Flag capacity is required to meet Contingency requirements.

2. The SecTrans, through MARAD, shall:

a. Review the amount of sealift resources committed in DoD

contracts to Stages I and II and notify USTRANSCOM if a particular

level of VISA commitment will have serious adverse impact on the

commercial sealift industry's ability to provide essential services.

MARAD's analysis shall be based on the consideration that all VISA

Stage I and II capacity committed will be activated. This notification

will occur on an annual basis upon USCINCTRANS' acceptance of VISA

commitments from the Participants. If so advised by MARAD, USTRANSCOM

will adjust the size of the stages or provide MARAD with justification

for maintaining the size of those stages. 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.

b. Coordinate with DOJ for the expedited approval of CCAs.

c. Upon request by USCINCTRANS and approval by SecDef to activate

Stage III, allocate sealift capacity and intermodal assets to meet DoD

Contingency requirements. DoD shall have priority consideration in any

allocation situation.

d. Establish procedures, pursuant to Section 653(d) of the Maritime

Security Act (MSA), for determinations regarding the equivalency and

duration of the use of foreign flag vessels to replace U.S. Flag vessel

capacity to transport the cargo of a Participant which has entered into

an operating agreement under Section 652 of the MSA and whose U.S. Flag

vessel capacity has been removed from regular service to meet VISA

contingency requirements. Such foreign flag vessels shall be eligible

to transport cargo subject to the Cargo Preference Act of 1904 (10

U.S.C. 2631), P.R. 17 (46 App. U.S.C. 1241-1), and P.L. 664 (46 App.

U.S.C. 1241(b)). However, any procedures regarding the use of such

foreign flag vessels to transport cargo subject to the Cargo Preference

Act of 1904 must have the concurrence of USTRANSCOM before it becomes

effective.

e. Co-chair (with USTRANSCOM) the JPAG.

f. Seek necessary Jones Act waivers as required. To the extent

feasible, participants with Jones Act vessels or vessel capacity will

use CCAs or other arrangements to protect their ability to maintain

services for their commercial customers and to fulfill their commercial

peacetime commitments with U.S. Flag vessels. In situations where the

activation of this Agreement deprives a Participant of all or a portion

of its Jones Act vessels or vessel capacity and, at the same time,

creates a general shortage of Jones Act vessel(s) or vessel capacity on

the market, the Administrator may request that the Secretary of the

Treasury grant a temporary waiver of the provisions of the Jones Act to

permit a Participant to charter or otherwise utilize non-Jones Act

vessel(s) or vessel capacity, with priority consideration recommended

for U.S. crewed vessel(s) or vessel capacity. The vessel(s) or vessel

capacity for which such waivers are requested will be approximately

equal to the Jones Act vessel(s) or vessel capacity chartered or under

contract to the DoD, and any waiver that may be granted will be

effective for the period that the Jones Act vessel(s) or vessel

capacity is on charter or under contract to the DoD plus a reasonable

time for termination of the replacement charters as determined by the

Administrator.

C. Termination of Charters, Leases and Other Contractual Arrangements

1. USTRANSCOM will notify the Administrator as soon as possible of

the prospective termination of charters, leases, management service

contracts or other contractual arrangements made by the DoD under this

Agreement.

2. In the event of general requisitioning of ships under 46 App.

U.S.C. 1242, the Administrator shall consider commitments made with the

DoD under this Agreement.

D. Modification/Amendment of This Agreement

1. The Attorney General may modify this Agreement, in writing,

after consultation with the Chairman-FTC, SecTrans, through his

representative MARAD, and SecDef, through his representative

USCINCTRANS. Although Participants may withdraw from this Agreement

pursuant to Section VI.D, they remain subject to VISA as amended or

modified until such withdrawal.

2. The Administrator, USCINCTRANS and Participants may modify this

Agreement at any time by mutual agreement, but only in writing with the

approval of the Attorney General and the Chairman-FTC.

3. Participants may propose amendments to this Agreement at any

time.

E. Administrative Expenses

Administrative and out-of-pocket expenses incurred by a participant

shall be borne solely by the participant.

F. Record Keeping

1. MARAD has primary responsibility for maintaining carrier VISA

application records in connection with this Agreement. Records will be

maintained in accordance with MARAD Regulations. Once a carrier is

selected as a VISA Participant, a copy of the VISA application form

will be forwarded to USTRANSCOM.

2. In accordance with 44 CFR 332.2(c), MARAD is responsible for the

making and record maintenance of a full and verbatim transcript of each

JPAG meeting. MARAD shall send this transcript, and any voluntary

agreement resulting from the meeting, to the Attorney General, the

Chairman-FTC, the Director-FEMA, any other party or repository required

by law and to Participants upon their request.

3. USTRANSCOM shall be the official custodian of records related to

the contracts to be used under this Agreement, to include specific

information on enrollment of a Participant's capacity in VISA.

4. In accordance with 44 CFR 332.3(d), a Participant shall maintain

for five (5) years all minutes of meetings, transcripts, records,

documents and other data, including any

[[Page 8218]]

communications with other Participants or with any other member of the

industry or their representatives, related to the administration,

including planning related to and implementation of Stage activations

of this Agreement. Each Participant agrees to make such records

available to the Administrator, USCINCTRANS, the Attorney General, and

the Chairman-FTC for inspection and copying at reasonable times and

upon reasonable notice. Any record maintained by MARAD or USTRANSCOM

pursuant to paragraphs 1, 2, or 3 of this subsection shall be available

for public inspection and copying unless exempted on the grounds

specified in 5 U.S.C. 552(b) or identified as privileged and

confidential information in accordance with Section 708(e).

G. MARAD Reporting Requirements

MARAD shall report to the Director-FEMA, as required, on the status

and use of this agreement.

IV. Joint Planning Advisory Group

A. The JPAG provides USTRANSCOM, MARAD and VISA Participants a

planning forum to:

1. Analyze DoD Contingency sealift/intermodal service and resource

requirements.

2. Identify commercial sealift capacity that may be used to meet

DoD requirements, related to Contingencies and, as requested by

USTRANSCOM, exercises and special movements.

3. Develop and recommend Concepts of Operations (CONOPS) to meet

DoD-approved Contingency requirements and, as requested by USTRANSCOM,

exercises and special movements.

B. The JPAG will be co-chaired by MARAD and USTRANSCOM, and will

convene as jointly determined by the co-chairs.

C. The JPAG will consist of designated representatives from MARAD,

USTRANSCOM, each Participant, and maritime labor. Other attendees may

be invited at the discretion of the co-chairs as necessary to meet JPAG

requirements. Representatives will provide technical advice and support

to ensure maximum coordination, efficiency and effectiveness in the use

of Participants' resources. All Participants will be invited to all

open JPAG meetings. For selected JPAG meetings, attendance may be

limited to designated Participants to meet specific operational

requirements.

1. The co-chairs may establish working groups within JPAG.

Participants may be assigned to working groups as necessary to develop

specific CONOPS.

2. Each working group will be co-chaired by representatives

designated by MARAD and USTRANSCOM.

D. The JPAG will not be used for contract negotiations and/or

contract discussions between carriers and the DoD; such negotiations

and/or discussions will be in accordance with applicable DoD

contracting policies and procedures.

E. The JPAG co-chairs shall:

1. Notify the Attorney General, the Chairman-FTC, Participants and

the maritime labor representative of the time, place and nature of each

JPAG meeting.

2. Provide for publication in the Federal Register of a notice of

the time, place and nature of each JPAG meeting. If the meeting is

open, a Federal Register notice will be published reasonably in advance

of the meeting. If a meeting is closed, a Federal Register notice will

be published within ten (10) days after the meeting and will include

the reasons for closing the meeting.

3. Establish the agenda for each JPAG meeting and be responsible

for adherence to the agenda.

4. Provide for a full and complete transcript or other record of

each meeting and provide one copy each of transcript or other record to

the Attorney General, the Chairman-FTC, and to Participants, upon

request.

F. Security Measures--The co-chairs will develop and coordinate

appropriate security measures so that Contingency planning information

can be shared with Participants to enable them to plan their

commitments.

V. Activation of VISA Contingency Provisions

A. General

VISA may be activated at the request of USCINCTRANS, with approval

of SecDef, as needed to support Contingency operations. Activating

voluntary commitments of capacity to support such operations will be in

accordance with prenegotiated Contingency contracts between DoD and

Participants.

B. Notification of Activation

1. USCINCTRANS will notify the Administrator of the activation of

Stages I, II, and III.

2. The Administrator shall notify the Attorney General and the

Chairman-FTC when it has been determined by DoD that activation of any

Stage of VISA is necessary to meet DoD Contingency requirements.

C. Voluntary Capacity

1. Throughout the activation of any Stages of this Agreement, DoD

may utilize voluntary commitment of sealift capacity or systems.

2. Requests for volunteer capacity will be extended simultaneously

to both Participants and other carriers. First priority for utilization

will be given to Participants who have signed Stage I and/or II

contracts and are capable of meeting the operational requirements.

Participants providing voluntary capacity may request USTRANSCOM to

activate their prenegotiated Contingency contracts; to the maximum

extent possible, USTRANSCOM, where appropriate, shall support such

requests. Volunteered capacity will be credited against Participants'

staged commitments, in the event such stages are subsequently

activated.

3. In the event Participants are unable to fully meet Contingency

requirements, or do not voluntarily offer to provide the required

capacity, the shipping capacity made available under VISA may be

supplemented by ships/capacity from non-Participants.

4. When voluntary capacity does not meet DoD Contingency

requirements, DoD will activate the VISA stages as necessary.

D. Stage I

1. Stage I will be activated in whole or in part by USCINCTRANS,

with approval of SecDef, when voluntary capacity commitments are

insufficient to meet DoD Contingency requirements. USCINCTRANS will

notify the Administrator upon activation.

2. USTRANSCOM will implement Stage I Contingency contracts as

needed to meet operational requirements.

E. Stage II

1. Stage II will be activated, in whole or in part, when

Contingency requirements exceed the capability of Stage I and/or

voluntarily committed resources.

2. Stage II will be activated by USCINCTRANS, with approval of

SecDef, following the same procedures discussed in paragraph D above.

F. Stage III

1. Stage III will be activated, in whole or in part, when

Contingency requirements exceed the capability of Stages I and II, and

other shipping services are not available. This stage involves DoD use

of capacity and vessels operated by Participants which will be

furnished to DoD when required in accordance with this Agreement. The

capacity and vessels are allocated by MARAD on behalf of SecTrans to

USCINCTRANS.

2. Stage III will be activated by USCINCTRANS upon approval by

[[Page 8219]]

SecDef. Upon activation, DoD SecDef will request SecTrans to allocate

sealift capacity based on DoD requirements, in accordance with Title 1

of DPA, to meet the Contingency requirement. All Participants' capacity

committed to VISA is subject to use during Stage III.

3. Upon allocation of sealift assets by SecTrans, through its

designated representative MARAD, USTRANSCOM will negotiate and execute

Contingency contracts with Participants, using pre-approved rate

methodologies as established jointly by SecTrans and SecDef in

fulfillment of Section 653 of the Maritime Security Act of 1996. Until

execution of such contract, the Participant agrees that the assets

remain subject to the provisions of Section 902 of the Merchant Marine

Act of 1936, Title 46 App. U.S.C. 1242.

4. Simultaneously with activation of Stage III, the DoD Sealift

Readiness Program (SRP) will be activated for those carriers still

under obligation to that program.

G. Partial Activation

As used in this Section V, activation ``in part'' of any Stage

under this Agreement shall mean one of the following:

1. Activation of only a portion of the committed capacity of some,

but not all, of the Participants in any Stage that is activated; or

2. Activation of the entire committed capacity of some, but not

all, of the Participants in any Stage that is activated; or

3. Activation of only a portion of the entire committed capacity of

all of the Participants in any Stage that is activated.

VI. Terms and Conditions

A. Participation

1. Any U.S. Flag vessel operator organized under the laws of a

State of the United States, or the District of Columbia, may become a

``Participant'' in this Agreement by submitting an executed copy of the

form referenced in Section VII, and by entering into a VISA Enrollment

Contract with DoD which establishes a legal obligation to perform and

which specifies payment or payment methodology for all services

rendered.

2. The term ``Participant'' includes the entity described in VI.A.1

above, and all United States subsidiaries and affiliates of the entity

which own, operate, charter or lease ships and intermodal equipment in

the regular course of their business and in which the entity holds a

controlling interest.

3. Upon request of the entity executing the form referenced in

Section VII, the term ``Participant'' may include the controlled non-

domestic subsidiaries and affiliates of such entity signing this

Agreement, provided that the Administrator, in coordination with

USCINCTRANS, grants specific approval for their inclusion.

4. Any entity receiving payments under the Maritime Security

Program (MSP), pursuant to the Maritime Security Act of 1996 (MSA)

(P.L. 104-239), shall become a ``Participant'' with respect to all

vessels enrolled in MSP at all times until the date the MSP operating

agreement would have terminated according to its original terms. The

MSP operator shall be enrolled in VISA as a Stage III Participant, at a

minimum. Such participation will satisfy the requirement for an MSP

participant to be enrolled in an emergency preparedness program

approved by SecDef as provided in Section 653 of the MSA.

5. A Participant shall be subject only to the provisions of this

Agreement and not to the provisions of the SRP.

6. MARAD shall publish periodically in the Federal Register a list

of Participants.

B. Agreement of Participant

1. Each Participant agrees to provide commercial sealift and/or

intermodal shipping services/systems in accordance with DoD Contingency

contracts. USTRANSCOM will review and approve each Participant's

commitment to ensure it meets DoD Contingency requirements. A

Participant's capacity commitment to Stages I and II will be one of the

considerations in determining the level of DoD peacetime contracts

awarded with the exception of Jones Act capacity (as discussed in

paragraph 4 below).

2. DoD may also enter into Contingency contracts, not linked to

peacetime contract commitments, with Participants, as required to meet

Stage I and II requirements.

3. Commitment of Participants' resources to VISA is as follows:

a. Stage III: A carrier desiring to participate in DoD peacetime

contracts/traffic must commit no less than 50% of its total U.S. Flag

capacity into Stage III. Carriers receiving DOT payments under the MSP,

or carriers subject to Section 909 of Merchant Marine Act of 1936, as

amended, that are not enrolled in the SRP will have vessels receiving

such assistance enrolled in Stage III. Participants' capacity under

charter to DoD will be considered ``organic'' to DoD, and does not

count towards the Participant's Contingency commitment during the

period of the charter. Participants utilized under Stage III activation

will be compensated based upon a DoD pre-approved rate methodology.

b. Stages I and II: DoD will annually develop and publish minimum

commitment requirements for Stages I and II. Normally, the awarding of

a long-term (i.e., one year or longer) DoD contract, exclusive of

charters, will include the annual predesignated minimum commitment to

Stages I and/or II. Participants desiring to bid on DoD peacetime

contracts will be required to provide commitment levels to meet DoD-

established Stage I and/or II minimums on an annual basis. Participants

may gain additional consideration for peacetime contract cargo

allocation awards by committing capacity to Stages I and II beyond the

specified minimums. If the Participant is awarded a contract reflecting

such a commitment, that commitment shall become the actual amount of a

Participant's U.S. Flag capacity commitment to Stages I and II. A

Participant's Stage III U.S. Flag capacity commitment shall represent

its total minimum VISA commitment. That Participant's Stage I and II

capacity commitments as well as any volunteer capacity contribution by

Participant are portions of Participant's total VISA commitment.

Participants activated during Stages I and II will be compensated in

accordance with prenegotiated Contingency contracts.

4. Participants exclusively operating vessels engaged in domestic

trades will be required to commit 50% of that capacity to Stage III.

Such Participants will not be required to commit capacity to Stages I

and II as a consideration of domestic peacetime traffic and/or contract

award. However, such Participants may voluntarily agree to commit

capacity to Stages I and/or II.

5. The Participant owning, operating, or controlling an activated

ship or ship capacity will provide intermodal equipment and management

services needed to utilize the ship and equipment at not less than the

Participant's normal efficiency, in accordance with the prenegotiated

Contingency contracts implementing this Agreement.

C. Effective Date and Duration of Participation

1. Participation in this Agreement is effective upon execution by

MARAD of the submitted form referenced in Section VII, and approval by

USTRANSCOM by execution of an Enrollment Contract, for Stage III, at a

minimum.

[[Page 8220]]

2. VISA participation remains in effect until the Participant

terminates the Agreement in accordance with paragraph D below, or

termination of the Agreement in accordance with 44 CFR Sec. 332.4.

Notwithstanding termination of VISA or participation in VISA,

obligations pursuant to executed DoD peacetime contracts shall remain

in effect for the term of such contracts and are subject to all terms

and conditions thereof.

D. Participant Termination of VISA

1. Except as provided in paragraph 2 below, a Participant may

terminate its participation in VISA upon written notice to the

Administrator. Such termination shall become effective 30 days after

written notice is received, unless obligations incurred under VISA by

virtue of activation of any Contingency contract cannot be fulfilled

prior to the termination date, in which case the Participant shall be

required to complete the performance of such obligations. Voluntary

termination by a carrier of its VISA participation shall not act to

terminate or otherwise mitigate any separate contractual commitment

entered into with DoD.

2. A Participant having an MSP operating agreement with SecTrans

shall not withdraw from this Agreement at any time during the original

term of the MSP operating agreement.

3. A Participant's withdrawal, or termination of this Agreement,

will not deprive a Participant of an antitrust defense otherwise

available to it in accordance with DPA Section 708 for the fulfillment

of obligations incurred prior to withdrawal or termination.

4. A Participant otherwise subject to the DoD SRP that voluntarily

withdraws from this Agreement will become subject again to the DoD SRP.

E. Rules and Regulations

Each Participant acknowledges and agrees to abide by all provisions

of DPA Section 708, and regulations related thereto which are

promulgated by the Secretary, the Attorney General, and the Chairman-

FTC. Standards and procedures pertaining to voluntary agreements have

been promulgated in 44 CFR Part 332. 46 CFR Part 340 establishes

procedures for assigning the priority for use and the allocation of

shipping services, containers and chassis. The JPAG will inform

Participants of new and amended rules and regulations as they are

issued in accordance with law and administrative due process. Although

Participants may withdraw from VISA, they remain subject to all

authorized rules and regulations while in Participant status.

F. Carrier Coordination Agreements (CCA)

1. When any Stage of VISA is activated or when DoD has requested

volunteer capacity pursuant to Section V.B. of VISA, Participants may

implement approved CCAs to meet the needs of the DoD and to minimize

the disruption of their services to the civil economy.

2. A CCA for which the parties seek the benefit of Section 708(j)

of the DPA shall be identified as such and shall be submitted to the

Administrator for approval and certification in accordance with Section

708(f)(1)(A) of the DPA. Upon approval and certification, the

Administrator shall transmit the Agreement to the Attorney General for

a finding in accordance with Section 708(f)(1)(B) of the DPA. Parties

to approved CCAs may avail themselves of the antitrust defenses set

forth in Section 708(j) of the DPA. Nothing in VISA precludes

Participants from engaging in lawful conduct (including carrier

coordination activities) that lies outside the scope of an approved

Carrier Coordination Agreement; but antitrust defenses will not be

available pursuant to Section 708(j) of the DPA for such conduct.

3. Participants may seek approval for CCAs at any time.

G. Enrollment of Capacity (Ships and Equipment)

1. A list identifying the ships/capacity and intermodal equipment

committed by a Participant to each Stage of VISA will be prepared by

the Participant and submitted to USTRANSCOM within seven days after a

carrier has become a Participant. USTRANSCOM will maintain a record of

all such commitments. Participants will notify USTRANSCOM of any

changes not later than seven days prior to the change.

2. USTRANSCOM will provide a copy of each Participant's VISA

commitment data and all changes to MARAD.

3. Information which a Participant identifies as privileged or

business confidential/proprietary data shall be withheld from public

disclosure in accordance with Section 708(h)(3) and Section 705(e) of

the DPA, 5 App. U.S.C. 552(b), and 44 CFR Part 332.

4. Enrolled ships are required to comply with 46 CFR Part 307,

Establishment of Mandatory Position Reporting System for Vessels.

H. War Risk Insurance

1. Where commercial war risk insurance is not available on

reasonable terms and conditions, DOT shall provide non-premium

government war risk insurance, subject to the provisions of Section

1205 of the Merchant Marine Act, 1936, as amended (46 App. U.S.C.

1285(a)).

2. Pursuant to 46 CFR 308.1(c), the Administrator (or DOT) will

find each ship enrolled or utilized under this agreement eligible for

U.S. Government war risk insurance.

I. Antitrust Defense

1. Under the provisions of DPA Section 708, each carrier shall have

available as a defense to any civil or criminal action brought under

the antitrust laws (or any similar law of any State) with respect to

any action taken to develop or carry out this Agreement, that such act

was taken in the course of developing or carrying out this Agreement

and that the Participant complied with the provisions of DPA Section

708 and any regulation thereunder, and acted in accordance with the

terms of this Agreement.

2. This defense shall not be available to the Participant for any

action occurring after termination of this Agreement. This defense

shall not be available upon the modification of this Agreement with

respect to any subsequent action that is beyond the scope of the

modified text of this Agreement, except that no such modification shall

be accomplished in a way that will deprive the Participant of antitrust

defense for the fulfillment of obligations incurred.

3. This defense shall be available only if and to the extent that

the Participant asserting it demonstrates that the action, which

includes a discussion or agreement, was within the scope of this

Agreement.

4. The person asserting the defense bears the burden of proof.

5. The defense shall not be available if the person against whom it

is asserted shows that the action was taken for the purpose of

violating the antitrust laws.

6. As appropriate, the Administrator, on behalf of SecTrans, and

DoD will support agreements filed by Participants with the Federal

Maritime Commission that are related to the standby or Contingency

implementation of VISA.

J. Breach of Contract Defense

Under the provisions of DPA Section 708, in any action in any

Federal or State court for breach of contract, there shall be available

as a defense that the alleged breach of contract was caused

predominantly by action taken by a Participant during an emergency

(including action taken in imminent anticipation of an emergency) to

carry out this Agreement. Such defense shall not release the party

asserting it from

[[Page 8221]]

any obligation under applicable law to mitigate damages to the greatest

extent possible.

K. Vessel Sharing Agreements (VSA)

1. VISA allows Participants the use of a VSA to utilize non-

Participant U.S. Flag or foreign-owned and operated foreign flag vessel

capacity as a substitute for VISA Contingency capability provided:

a. The foreign flag capacity is utilized in accordance with cargo

preference laws and regulations.

b. The use of a VSA, either currently in use or a new proposal, as

a substitution to meet DoD Contingency requirements is agreed upon by

USTRANSCOM and MARAD.

c. The Participant carrier demonstrates adequate control over the

offered VSA capacity during the period of utilization.

d. Service requirements are satisfied.

e. Participant is responsible to DoD for the carriage or services

contracted for. Though VSA capacity may be utilized to fulfill a

Contingency commitment, a Participant's U.S. Flag VSA capacity in

another Participant's vessel shall not act in a manner to increase a

Participant's capacity commitment to VISA.

2. Participants will apprise MARAD and USTRANSCOM in advance of any

change in a VSA of which it is a member, if such changes reduce the

availability of Participant capacity provided for in any approved and

accepted Contingency Concept of Operations.

3. Participants will not act as a broker for DoD cargo unless

requested by USTRANSCOM.

VII. Application and Agreement

The Administrator, in coordination with USCINCTRANS has adopted the

form on page 31 (``Application to Participate in the Voluntary

Intermodal Sealift Agreement'') on which intermodal ship operators may

apply to become a Participant in this Agreement. The form incorporates,

by reference, the terms of this Agreement.

United States of America, Department of Transportation, Maritime

Administration

Application To Participate in the Voluntary Intermodal Sealift

Agreement

The applicant identified below hereby applies to participate in the

Maritime Administration's agreement entitled ``Voluntary Intermodal

Sealift Agreement.'' The text of said Agreement is published in

________________ Federal Register ________________,

____________________, 19____. This Agreement is authorized under

Section 708 of the Defense Production Act of 1950, as amended (50 App.

U.S.C. 2158). Regulations governing this Agreement appear at 44 CFR

Part 332 and are reflected at 49 CFR Subtitle A.

The applicant, if selected, hereby acknowledges and agrees to the

incorporation by reference into this Application and Agreement of the

entire text of the Voluntary Intermodal Sealift Agreement published in

________________ Federal Register ________________,

____________________, 19____, as though said text were physically

recited herein.

The Applicant, as a Participant, agrees to comply with the

provisions of Section 708 of the Defense Production Act of 1950, as

amended, the regulations of 44 CFR Part 332 and as reflected at 49 CFR

Subtitle A, and the terms of the Voluntary Intermodal Sealift

Agreement. Further, the applicant, if selected as a Participant, hereby

agrees to contractually commit to make specifically enrolled vessels or

capacity, intermodal equipment and management of intermodal

transportation systems available for use by the Department of Defense

and to other Participants as discussed in this Agreement and the

subsequent Department of Defense Voluntary Intermodal Sealift Agreement

Enrollment Contract for the purpose of meeting national defense

requirement.

Attest:

(Corporate Secretary)

(CORPORATE SEAL)

Effective Date:--------------------------------------------------------

(Secretary)

(SEAL)

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

(Applicant--Corporate Name)

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

(Signature)

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

(Position Title)

United States of America, Department of Transportation, Maritime

Administration

By:--------------------------------------------------------------------

Maritime Administrator

Dated: February 11, 1999.

By Order of the Maritime Administrator.

Joel C. Richard,

Secretary, Maritime Administration.

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[GRAPHIC] [TIFF OMITTED] TN18FE99.000

[FR Doc. 99-3826 Filed 2-17-99; 8:45 am]

BILLING CODE 4910-81-C