[Federal Register: October 10, 2006 (Volume 71, Number 195)]
[Notices]
[Page 59496-59498]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10oc06-47]
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DEPARTMENT OF DEFENSE
Department of the Army
Publication of Changes to Surface Deployment and Distribution
Command Policy TR-12, Fuel Related Rate Adjustment Policy
AGENCY: Department of the Army, DOD.
ACTION: Notice IAW 41 U.S.C. 418b.
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SUMMARY: SDDC intends to modify SDDC Policy TR-12. SDDC intends to
implement the modified policy 90 (ninety) days from publication in the
Federal Register. Modifications include the following: 1. SDDC will no
longer pay a Fuel Related Adjustment (FRA) or fuel surcharge on
movements based on what is known as a ``Spot Bid'' tender. 2. SDDC will
no longer pay an FRA for any type of rail shipment. 3. SDDC will pay an
FRA based on an updated baseline of $2.50 rather than a baseline of
$1.30.
DATES: SDDC intends to implement the policy change 90 (ninety) days
from publication in the Federal Register, except that the effective
date of the policy change for the SDDC Personal Property Program is
April 1, 2007 for the domestic line haul portion of international
movements and May 1, 2007 for the line haul portion of
[[Page 59497]]
domestic interstate and intrastate movements including Alaska and
Hawaii. Until the policy change goes into effect for Personal Property
Program shipments, the policy in TR-12 dated October 5, 2005 shall
continue to be used to determine payment for Personal Property Program
shipments.
ADDRESSES: Submit comments to Ms. Carol Breen, 200 Stovall St., Hoffman
II, Room 11S19, Alexandria, VA 22332. Request for additional
information may be sent by e-mail to: breenc@sddc.army.mil.
SUPPLEMENTARY INFORMATION:
Military Surface Deployment And Distribution Command (SDDC)--
Transportation and Travel
[Policy No. TR-12]
Subject: Fuel-Related Adjustment (FRA) Policy
This version of Policy No. TR-12 supersedes all previous versions
of TR-12, except to the extent that a previous version is explicitly
referenced as the basis for payment in an agreement with SDDC.
A. Policy
1. The following FRA or fuel surcharge policy applies to commercial
carrier freight and personal property movements within the United
States. SDDC will pay an FRA for certain types of domestic movements,
as stated in paragraph E. SDDC will no longer pay an FRA on ``Spot
Bid'' movements, regardless of mode. Nor will SDDC pay an FRA for any
type of rail shipment. This policy provides the transportation
industry, including individual carriers, economic adjustment and
reasonable relief for unanticipated increases in diesel fuel prices.
Carriers are urged to consider anticipated variation in fuel prices
when submitting or supplementing rates during rate filing and/or bid
submission periods.
2. Written provision will be made in SDDC regulations and solicited
tender agreements for FRAs. At the sole discretion of the appropriate
Contracting Officer this policy may be applied to Federal Acquisitions
Regulation (FAR) contracts. SDDC has no obligation whatsoever to apply
this policy to FAR contracts other than where the appropriate
Contracting Officer determines that it shall apply.
B. Effective Date
The effective date of the policy change is 90 (ninety) days from
publication in Federal Register, except that the effective date of the
policy change for the SDDC Personal Property Program is April 1, 2007
for the domestic line haul portion of international movements and May
1, 2007 for the line haul portion of domestic interstate and intrastate
movements including Alaska and Hawaii. Until the policy change goes
into effect for Personal Property Program shipments, the policy in TR-
12 dated October 5, 2005 shall continue to be used to determine payment
for Personal Property Program shipments.
C. Expiration Date
This policy is in effect until superseded or withdrawn in writing.
D. Definitions
The following definitions shall apply to terms used in this
regulation.
1. Fuel Cost: The national average diesel fuel price published by
the Department of Energy (DOE) Energy Information Administration (EIA).
The diesel fuel prices published by the EIA may be found via the
following sources:
--EIA Website: http://www.eia.doe.gov/_EIA
Weekly Petroleum Status Report
--EIA Hotline: (202) 586-6966
2. Pick up date: The date listed on the bill of lading indicating
the calendar day on which the carrier takes possession of a given
shipment.
3. Spot Bid: A flexible and responsive one-touch electronic
resource that posts open shipments for bid by qualified carriers via
the Internet. It is a viable acquisition alternative for procuring
transportation services for one-time only, unique shipments of any or
all modes. It supports SDDC Operations policy on overweight/over-
dimensional shipments. Carriers bid on open shipments via the Internet,
and bids remain sealed until the bid timeframe closes. It allows the
Shipper to establish the bidding timeframe. Bids are used in place of
standard tenders in the generation of a Bill of Lading. It also
provides automatic open shipment notification for participating
carriers. All submitted bids reflect an all-inclusive expense
representing line haul, accessorial charges, and any additional
expenses anticipated to support that particular shipment.
E. Application
SDDC shall pay an FRA in accordance with this policy on the
following types of movements.
1. Personal Property Program: a. Pickup occurs on or after April 1,
2007 for the domestic line haul portion of international movements and
on or after May 1, 2007 for the line haul portion of domestic
interstate and intrastate movements including Alaska and Hawaii.
b. The transportation charges applicable on domestic and
international storage-in-transit shipments when such shipments are
delivered or removed from the domestic storage-in transit warehouse of
the CONUS segment including Alaska and Hawaii.
2. Domestic Freight Program: a. The domestic line haul portion of
the carrier rate including Alaska and Hawaii.
b. The accessorial, Commercial Security Escort Vehicles (CSEV).
F. Determination of Adjustment Amount
1. Formula: For applicable shipments, the FRA shipments shall be
paid based on a percentage of the line-haul rate. The line-haul rate
does not include accessorials unless specified in the policy, i.e.,
E.2.b, or specifically called for in the solicitation for the freight
movement on which the FRA is based. Where the FRA applies, SDDC shall
pay the carrier 1% (one percent) of the line-haul rate, not including
accessorial charges, for every increment of $.10 (ten cents) by which
the fuel cost exceeds $2.50 at the time of pickup.
2. Determination of Fuel Cost at Time of Shipment: a. For
applicable personal property program shipments, SDDC shall pay the FRA
based on the fuel cost published on the first Monday of the month in
which the shipment subject to the FRA is picked up. If Monday is a
holiday the fuel price will be determined based on the price on the
next business day. The fuel adjustment will automatically apply to
shipments picked up on or after the 15th day of the month through the
14th day of the following month.
b. For applicable domestic freight program shipments, SDDC shall
pay the FRA based on the fuel cost published on the Monday of the week
in which the shipment subject to the FRA was picked up. If Monday is a
holiday the fuel price will be determined based on the price on the
next business day.
G. Monitoring Diesel Fuel Prices
1. Fuel Price Source: It is the responsibility of the carrier to
monitor diesel fuel prices via one of the sources identified in this
policy. The National Average diesel fuel price determined by the DOE,
EIA will serve as the basis for determining the entitlement to an FRA.
The National Average fuel price and the actual pickup date of shipment
will determine if there is an entitlement to an adjustment and the
amount of the adjustment. An adjustment is not applicable to any
portion of transportation in which a surcharge or
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any other additional payment for fuel is already in existence.
2. Percentage: Please see the table included to the Attachment to
this policy for a demonstration of the percentage amount of the FRA for
applicable shipments.
H. Billing Procedures
Carriers will clearly show fuel price adjustments on all paper and
electronic commercial freight bills and Bills of Lading and invoices.
The amount of any diesel fuel rate surcharge must be shown as a
separate item on the carrier's invoice.
Regulatory Flexibility Act
This action is not considered rulemaking within the meaning of
Regulatory Flexibility Act, 5 U.S.C. 601-612.
Paperwork Reduction Act
The Paperwork Reduction Act, 44 U.S.C. 3051 et seq., does not apply
because no information collection or record keeping requirements are
imposed on contractors, offerors or members of the public.
David R. McClean,
Colonel, U.S. Army, Deputy Chief of Staff for Strategy, Plans, Policy
and Programs.
Attachment
The table below demonstrates the percentage of the line-haul
rate SDDC will pay at a given fuel cost given a $2.50 baseline.
Should the baseline differ at any time, the same principle applies
simply with a different starting point for calculating the percent
adjustment. The table ends at $4.40, but the same principle applies
to fuel costs above that dollar amount.
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Rate adjustment
Cost per gallon (percent)
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250.0 and below...................................... 0
251.1--260.0......................................... 1
260.1--270.0......................................... 2
270.1--280.0......................................... 3
280.1--290.0......................................... 4
290.1--300.0......................................... 5
300.1--310.0......................................... 6
310.1--320.0......................................... 7
320.1--330.0......................................... 8
330.1--340.0......................................... 9
340.1--350.0......................................... 10
350.1--360.0......................................... 11
360.1--370.0......................................... 12
370.1--380.0......................................... 13
380.1--390.0......................................... 14
400.1--410.0......................................... 15
410.1--420.0......................................... 16
420.1--430.0......................................... 17
430.1--440.0......................................... 18
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For example, if the reported DOE, EIA National Average diesel
fuel price is $3.15 the carrier would be entitled to an FRA of 7% of
the line-haul rate.
[FR Doc. E6-16685 Filed 10-6-06; 8:45 am]
BILLING CODE 3710-08-P