Defense Federal Acquisition Regulation Supplement; Motor Carrier Fuel Surcharge (DFARS Case 2008-D040)

Ynette R. Shelkin
September 27, 2010

[Federal Register: September 27, 2010 (Volume 75, Number 186)]
[Rules and Regulations]               
[Page 59103-59105]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27se10-24]                         

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 247 and 252

RIN 0750-AG30

 
Defense Federal Acquisition Regulation Supplement; Motor Carrier 
Fuel Surcharge (DFARS Case 2008-D040)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, with changes, an interim rule that 
implements section 884 of the National Defense Authorization Act for 
Fiscal Year 2009. Section 884 requires DoD to ensure that, to the 
maximum extent practicable, in all carriage contracts in which a fuel-
related adjustment is provided for, any fuel-related adjustment is 
passed through to the person who bears the cost of the fuel to which 
the adjustment relates.

[[Page 59104]]


DATES: Effective Date: September 27, 2010.

FOR FURTHER INFORMATION CONTACT: Ms. Mary Overstreet, Defense 
Acquisition Regulations System, OUSD (AT&L)DPAP(DARS), 3060 Defense 
Pentagon, Room 3B855, Washington, DC 20301-3060. Telephone 703-602-
0311; facsimile 703-602-0350. Please cite DFARS Case 2008-D040.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD published an interim rule at 74 FR 37652 on July 29, 2009, to 
implement section 884 of the National Defense Authorization Act for 
Fiscal Year 2009 (Pub. L. 110-417). Section 884 requires DoD to ensure 
that, to the maximum extent practicable, in all carriage contracts for 
which a fuel-related adjustment is provided, any fuel-related 
adjustment is passed through to the person who bears the cost of the 
fuel to which the adjustment relates. Section 884 also applies to 
commercial contracts for carriage.
    Two respondents submitted comments on the interim rule. A 
discussion of the comments received and the changes to the rule as a 
result of these comments is provided below:
    1. Comment. One respondent stated that it is customary in the motor 
carrier freight industry to assume a fixed cost of diesel fuel with a 
cost recovery mechanism (fuel surcharge) for a time period exceeding 30 
days. In the majority of instances, approximately 99 percent of the 
time, industry passes fuel surcharges to the party that pays for the 
fuel. The respondent is concerned that the new law will require 
documenting 100 percent of all activity and as a result, there will be 
additional administrative work and cost for no appreciable benefit.
    Response. DoD does not agree. The statute requires that, to the 
maximum extent practicable, any fuel-related adjustment is passed 
through to the person who bears the cost. Since, for the majority of 
instances, industry passes the fuel surcharges to the party that pays 
for the fuel, contractor records would reflect this. The only 
additional documentation requirement would be for the estimated one 
percent of actions where the fuel-adjustment is not passed through.
    2. Comment. Both respondents stated that there are some instances 
where it is not practicable to mandate an absolute requirement to pass 
the fuel-related adjustment to the party that paid for the fuel, and 
one respondent proposed the following remedy:

    ``(a) Except in instances where doing so would be impracticable, 
or pose a disproportionate administrative burden, the contractor 
shall pass through any motor carrier fuel-related surcharge 
adjustments to the person, corporation, or entity that directly 
bears the cost of fuel for shipment(s) transported under this 
contract.
    (i) Examples of impracticable instances may include but not be 
limited to, spot bids, one-time-only bids, or other services that 
are provided within 30 days of the time service was ordered.''

    Response. DoD agrees with the respondents in part. The examples of 
impracticable instances provided, however, are for short-term 
arrangements where there would not generally be a fuel surcharge and 
where the clause would not apply. DoD recognizes there may be limited 
instances where pass-through of fuel surcharge may not be feasible. 
Since the statute provides for application to the maximum practicable 
extent, the clause will include a statement that ``Unless an exception 
is approved by the Contracting Officer,'' the contractor shall pass 
through any motor carrier fuel-related surcharge adjustments to the 
person, corporation, or entity that directly bears the cost of fuel for 
shipment(s) transported under this contract.
    This regulatory action was not subject to review under Section 6(b) 
of Executive Order 12866, Regulatory Planning and Review, dated 
September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    DoD does not expect this final rule to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. However, DoD has 
prepared a final regulatory flexibility analysis consistent with 5 
U.S.C. 604. A copy of the analysis may be obtained from the point of 
contact specified herein. The analysis is summarized as follows:
    This final rule amends the DFARS to implement section 884 of the 
National Defense Authorization Act for Fiscal Year 2009. Section 884 
requires DoD to ensure that, to the maximum extent practicable, in all 
carriage contracts in which a fuel-related adjustment is provided for, 
any fuel-related adjustment is passed through to the person who bears 
the cost of the fuel to which the adjustment relates. The objective of 
the rule is to establish a DoD contract clause with appropriate flow-
down requirements addressing the statutory requirement for fuel-related 
contract adjustments to be passed to the entity bearing the cost of the 
fuel. The clause is to be inserted in all contracts with motor 
carriers, brokers, or freight forwarders providing or arranging truck 
transportation services that provide for a fuel-related adjustment.
    An interim rule was published on July 29, 2009, at 74 FR 37652 to 
which two responses were received. The responses indicated that current 
commercial marketplace practices already reflect the requirement to 
flow down any fuel surcharge to the party that incurs the cost of the 
fuel. Therefore, any impact of this rule on small entities is expected 
to be minimal.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this rule does 
not impose any new information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 48 CFR Parts 247 and 252

    Government procurement.

Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.

0
Accordingly, the interim rule amending 48 CFR parts 247 and 252, which 
was published at 74 FR 37652 on July 29, 2009, is adopted as a final 
rule with the following changes:
0
1. The authority citation for 48 CFR parts 247 and 252 continues to 
read as follows:

    Authority:  41 U.S.C. 421 and 48 CFR chapter 1.

PART 247--TRANSPORTATION

0
2. Section 247.207 is revised to read as follows:


247.207  Solicitation provisions, contract clauses, and special 
requirements.

    Use the clause at 252.247-7003, Pass-Through of Motor Carrier Fuel 
Surcharge Adjustment to the Cost Bearer, in solicitations and contracts 
for carriage in which a motor carrier, broker, or freight forwarder 
will provide or arrange truck transportation services that provide for 
a fuel-related adjustment.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 252.2--Text of Provisions and Clauses


252.212-7001  [Amended]

0
3. Section 252.212-7001 is amended by revising the clause date, and the

[[Page 59105]]

dates of the clauses in paragraphs (b)(22) and (c)(2) to read ``(SEP 
2010)''.

0
4. Section 252.247-7003 is revised to read as follows:


252.247-7003   Pass-Through of Motor Carrier Fuel Surcharge Adjustment 
To The Cost Bearer.

    As prescribed in 247.207, use the following clause:

PASS-THROUGH OF MOTOR CARRIER FUEL SURCHARGE ADJUSTMENT TO THE COST 
BEARER (SEP 2010)

    (a) This clause implements section 884 of the National Defense 
Authorization Act for Fiscal Year 2009 (Pub. L. 110-417).
    (b) Unless an exception is authorized by the Contracting 
Officer, the Contractor shall pass through any motor carrier fuel-
related surcharge adjustments to the person, corporation, or entity 
that directly bears the cost of fuel for shipment(s) transported 
under this contract.
    (c) The Contractor shall insert the substance of this clause, 
including this paragraph (c), in all subcontracts with motor 
carriers, brokers, or freight forwarders.


(End of clause)

[FR Doc. 2010-23664 Filed 9-24-10; 8:45 am]
BILLING CODE 5001-08-P