DAVID GIONGCO Caltrans Local Assistance Engineer

OB 16-01 - Cargo Preference Act Requirements

DLA OB 16-01:

Local agencies must include the following contract clause (either directly or by reference) in all Federal- aid contracts awarded after February 15, 2016: *Use of United States –flag vessels:

The contractor agrees –

(1) To utilize privately owned United States-flag commercial vessels to ship at least 50 percent of the gross tonnage (computed separately for dry bulk carriers, dry cargo liners, and tankers) involved, whenever shipping any equipment, material, or commodities pursuant to this contract, to the extent such vessels are available at fair and reasonable rates for United States-flag commercial vessels.

(2) To furnish within 20 days following the date of loading for shipments originating within the United States or within 30 working days following the date of loading for shipments originating outside the United States, a legible copy of a rated, ‘on-board’ commercial ocean bill-of-lading in English for each shipment of cargo described in paragraph (1) of this section to both the Contracting Officer (through the prime contractor in the case of subcontractor bills-of-lading) and to the Division of National Cargo, Office of Market Development, Maritime Administration, Washington, DC 20590.

(3) To insert the substance of the provisions of this clause in all subcontracts issued pursuant to this contract.*

While these clauses may not be applicable to most Local Assistance projects, they must be included in all construction contracts awarded after February 15. The clauses will eventually be included in Form FHWA 1273 by FHWA, but until that happens, insert the clauses to ensure compliance.