[Code of Federal Regulations]
[Title 46, Volume 8]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 46CFR381.8]

[Page 348-349]
 
                           TITLE 46--SHIPPING
 
    CHAPTER II--MARITIME ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 381_CARGO PREFERENCE_U.S.-FLAG VESSELS--Table of Contents
 
Sec. 381.8  Subsidized vessel participation.

    (a) For the purpose of approving subsidized U.S.-flag liner and bulk 
vessels competing for the carriage of dry bulk preference cargoes, each 
department or agency having responsibility under the Cargo Preference 
Act of 1954 (46 U.S.C. 1214(b)), shall evaluate bids received from the 
operators of such vessels in the manner described in this section.
    (b) When a subsidized vessel operator is the apparent low U.S.-flag 
responsive bidder for a dry bulk preference cargo, the responsible 
department or agency shall evaluate the subsidized operator's bid by:
    (1) Requesting from MARAD an amount for the operating-differential 
subsidy (ODS) likely to be paid for the carriage of such cargo expressed 
as a cost per ton for performing the voyage by the apparent low 
responsive subsidized bidders;
    (2) Deriving ``augmented bids'' for the subsidized operators by 
adding the ODS amount to each subsidized operator's bid;
    (3) Comparing the augmented bids of the subsidized operators and the 
bids of

[[Page 349]]

unsubsidized operators to determine the apparent low responsive bidder;
    (4) Requesting from MARAD a fair and reasonable guideline rate for 
the apparent low responsive bidder which shall be based on MARAD's 
calculation of anticipated costs (less ODS in the case of a subsidized 
vessel) for the voyage plus a reasonable amount for profit for the 
voyage; and
    (5) Determining whether the subsidized operator's unaugmented bid or 
the unsubsidized operator's bid, whichever was determined to be the 
lowest responsive bid pursuant to paragraph (b)(3) of this section, is 
at or below the fair and reasonable guideline rate.
    (c) If the amount of dry bulk cargo to be shipped is changed at any 
time prior to award, the department or agency shall request that MARAD 
provide new ODS amounts applicable to the carriage. The department or 
agency shall redetermine the augmented bids before determining the 
lowest responsive bid and requesting from MARAD a revised fair and 
reasonable guideline rate in accordance with the provisions of paragraph 
(b) of this section.
    (d) Whenever a bid is submitted for a U.S.-flag vessel for the 
transportation of dry bulk preference cargo, the responsible department 
or agency shall only approve bids that apply to an individual vessel, 
and may not accept combined bids submitted for more than one vessel. If 
two or more vessels are offered, separate bids shall be submitted for 
each vessel. A bidder may submit a conditional lower bid for each vessel 
to be effective only if more than one vessel is contracted to carry the 
cargo.
    (e) The requirements of this section shall apply only to those 
departments or agencies that directly pay or finance all or part of 
U.S.-flag ocean freight transportation costs for the carriage of dry 
bulk preference cargoes, in accordance with this part.
    (f) The requirements of this section shall not apply to foreign aid 
consisting of direct cash transfer payments under specific agreements 
between departments or agencies and the recipient country with respect 
to the utilization of U.S.-flag vessels for transportation of 
commodities purchased with such funds.

[53 FR 24272, June 28, 1988]