Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Rules and Regulations 59793 

Subpart 504.11—Central Contractor 

Registration 

Sec. 

504.1103 Procedures. 

Subpart 504.11—Central Contractor 

Registration 

504.1103 Procedures. 

In addition to the requirements found 

in FAR 4.1103, prior to awarding a 

contractual instrument the contracting 

officer must— 

(1) Verify that the prospective 

contractor’s legal business name, DoingBusiness-As (DBA) name (if any), 

physical street address, and Data 

Universal Number System (DUNS) 

number or DUNS+4 number, as found in 

the CCR, match the information that 

will be included in the contract, order, 

or agreement resulting from the vendor’s 

quote or proposal. Correct any 

mismatches by having the vendor 

amend the information in the CCR and/ 

or the quote or proposal. The CCR 

information can be accessed through 

GSA’s CCR repository (contact the GSA 

Systems Programming Branch for 

instructions, a user ID, and password). 

(2) Ensure that the contractor’s 

address code exists in Pegasys and that 

it is CCR enabled with the contractor’s 

DUNS or DUNS+4 number. This can be 

done by searching Pegasys records using 

the contractor’s Taxpayer Identification 

Number (TIN). If no code exists, request 

that a new address code be established 

by the Finance Center for CCR 

compliance. 

(3) Ensure that the contractor’s 

identifying information is correctly 

placed on the contractual instrument, 

using special care to ensure that the 

legal name and ‘‘remit to’’ name match 

exactly. (Note: Lockbox names or 

numbers should not be used to replace 

the contractor’s name in the remittance 

block on the contractual instrument.) 

(4) Unless one of the exceptions to 

registration in CCR applies (see FAR 

4.1102(a)), the contracting officer must 

not award a contract to a prospective 

contractor who is not registered in CCR. 

If no exceptions are applicable, and the 

needs of the requiring activity allows for 

a delay in award, see FAR 4.1103(b)(1). 

■ 11. Add Subpart 504.13 to read as 

follows: 

Subpart 504.13—Personal Identity 

Verification of Contractor Personnel 

Sec. 

504.1301 Policy. 

504.1303 Contract clause. 

Subpart 504.13—Personal Identity 

Verification of Contractor Personnel 

504.1301 Policy. 

Contracting officers must follow the 

procedures contained in CIO P2181.1— 

GSA HSPD–12 Personal Identity 

Verification and Credentialing 

Handbook, which may be obtained from 

the CIO Office of Enterprise Solutions, 

to ensure compliance with Homeland 

Security Presidential Directive-12 

(HSPD–12) ‘‘Policy for a Common 

Identification Standard for Federal 

Employees and Contractors,’’ Office of 

Management and Budget Memorandum 

M–05–24, and Department of Commerce 

FIPS PUB 201. 

504.1303 Contract clause. 

Insert the clause at 552.204–9, 

Personal Identity Verification 

Requirements, in solicitations and 

contracts when it is determined that 

contractor employees will require access 

to federally controlled facilities or 

information systems to perform contract 

requirements. 

PART 552—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 12. Add section 552.204–9 to read as 

follows: 

552.204–9 Personal Identity Verification 

Requirements. 

As prescribed in 504.1303, insert the 

following clause: 

Personal Identity Verification 

Requirements (Date) 

(a) The contractor shall comply with GSA 

personal identity verification requirements, 

identified at http://www.gsa.gov/hspd12, if 

contractor employees require access to GSA 

controlled facilities or information systems to 

perform contract requirements. 

(b) The Contractor shall insert this clause 

in all subcontracts when the subcontractor is 

required to have access to a GSA-controlled 

facility or access to a GSA-controlled 

information system. 

(End of clause) 

[FR Doc. 2012–24028 Filed 9–28–12; 8:45 am] 

BILLING CODE 6820–61–P 

DEPARTMENT OF TRANSPORTATION 

Office of the Secretary 

49 CFR Part 33 

[Docket No. OST 2010–0298] 

RIN 2105–AD83 

Prioritization and Allocation Authority 

Exercised by the Secretary of 

Transportation Under the Defense 

Production Act 

AGENCY: Office of the Secretary of 

Transportation (OST), DOT. 

ACTION: Final rule; request for 

comments. 

SUMMARY: This final rule clarifies the 

priorities and allocation authorities 

exercised by the Secretary of 

Transportation (Secretary) under title I 

of the Defense Production Act of 1950 

(Defense Production Act), and 

establishes the administrative 

procedures by which the Secretary will 

exercise this authority. In addition, in 

this final rule the Department is seeking 

comments on certain revised definitions 

found in section 33.20. This rule 

complies with the requirement in the 

Defense Production Act Reauthorization 

of 2009 (Pub. L. 111–67) to issue final 

rules establishing standards and 

procedures by which the priorities and 

allocations authority is used to promote 

the national defense, under both 

emergency and nonemergency 

conditions, and is part of a multi-agency 

effort that forms the Federal Priorities 

and Allocations System. 

DATES: This rule is effective on 

November 30, 2012. Comment Closing 

Date: Comments on the revised 

definitions are due on October 31, 2012. 

ADDRESSES: You may submit written 

comments on the revised definitions, as 

well as those regarding the burden-hour 

estimates or other aspects of the 

information collection requirements, 

(identified by the agency name and DOT 

Docket ID Number OST–2010–0298) by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

www.regulations.gov and follow the 

online instructions for submitting 

comments. 

• Mail: Docket Management Facility: 

U.S. Department of Transportation, 1200 

New Jersey Avenue SE., West Building 

Ground Floor, Room W12–140, 

Washington, DC 20590–0001. 

• Hand Delivery or Courier: West 

Building Ground Floor, Room W12–140, 

1200 New Jersey Avenue SE., between 

9 a.m. and 5 p.m. ET, Monday through 

Friday, except Federal holidays. 

• Fax: 202–493–2251. 

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59794 Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Rules and Regulations 

1Executive Order 13603 replaced Executive 

Order 12919, National Defense Industrial Resource 

Preparedness, June 3, 1994. In addition to the noted 

definition modifications for which DOT is seeking 

comment, the issuance of Executive Order 13603 

resulted in editorial changes that are reflected in 

this final rule. 

2Section 201 of Executive Order 13603 also 

delegates Defense Production Act section 101 

authority to: 

(1) The Secretary of Agriculture with respect to 

food resources, food resource facilities, livestock 

resources, veterinary resources, plant health 

resources and the domestic distribution of farm 

equipment and commercial fertilizer; 

(2) The Secretary of Energy with respect to all 

forms of energy; 

(3) The Secretary of Health and Human Services 

with respect to health resources; 

(4) The Secretary of Defense with respect to water 

resources; and 

Note that all comments received will 

be posted without change to 

www.regulations.gov including any 

personal information provided and will 

be available to internet users. You may 

review DOT’s complete Privacy Act 

Statement in the Federal Register 

published on April 11, 2000 (65 FR 

19477) or you may visit http:// 

DocketsInfo.dot.gov. 

Docket: For internet access to the 

docket to read background documents 

and comments received, go to 

www.regulations.gov. Background 

documents and comments received may 

also be viewed at the U.S. Department 

of Transportation, 1200 New Jersey Ave. 

SE., Docket Operations, M–30, West 

Building Ground Floor, Room W12–140, 

Washington, DC 20590, between 9:00 

a.m. and 5:00 p.m., Monday through 

Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Donna L. O’Berry, Office of the General 

Counsel, Department of Transportation, 

1200 New Jersey Avenue SE., Room 

W96–317, Washington, DC 20590; 

telephone: (202) 366–6136; email: 

donna.o’berry@dot.gov; or Lloyd E. 

Milburn, Office of Intelligence, Security 

and Emergency Response, Department 

of Transportation, 1200 New Jersey 

Avenue SE., Washington, DC 20590; 

telephone: (202) 366–4397; email: 

lloyd.milburn@dot.gov. 

SUPPLEMENTARY INFORMATION: 

I. Executive Summary 

A. Purpose of the Regulatory Action 

This final rule clarifies the priorities 

and allocation authorities exercised by 

the Secretary under title 1 of the 

Defense Production Act, and establishes 

the administrative procedures by which 

the Secretary will exercise this 

authority. In addition, in this final rule 

the Department is seeking comments on 

certain revised definitions found in 

section 33.20. This rule complies with 

the requirement in the Defense 

Production Act Reauthorization of 2009 

(Pub. L. 111–67) to issue final rules 

establishing standards and procedures 

by which the priorities and allocations 

authority is used to promote the 

national defense, under both emergency 

and nonemergency conditions, and is 

part of a multi-agency effort that forms 

the Federal Priorities and Allocations 

System. 

B. Summary of Major Provisions 

The Defense Production Act 

Reauthorization of 2009 requires each 

Federal agency with delegated authority 

under section 101 of the Defense 

Production Act to issue final rules 

establishing standards and procedures 

by which the priorities and allocations 

authority is used to promote the 

national defense, under both emergency 

and non-emergency conditions. 

Congress further directed that, to the 

extent practicable, the Federal agencies 

should work together to develop a 

consistent and unified Federal priorities 

and allocations system. 

In order to meet this mandate, the 

Department of Transportation (DOT) 

worked in conjunction with the 

Departments of Agriculture (USDA), 

Commerce (DOC), Defense (DoD), 

Energy (DOE), Health and Human 

Services (HHS), and Homeland Security 

(DHS) to develop common provisions 

that can be used by each Department in 

its own regulation. The six regulations 

to be promulgated by each Department 

with delegated Defense Production Act 

title I authority comprise the Federal 

Priorities and Allocations System 

(FPAS) of rules. DOT’s regulation is 

known as the Transportation Priorities 

and Allocations System (TPAS). DOT 

published a Notice of Proposed 

Rulemaking (NPRM) establishing the 

proposed structure for TPAS on 

February 15, 2011 (76 FR 8675). DOT 

solicited comments on the proposed 

rule, but did not receive any comments. 

C. Cost and Benefits 

This regulation sets criteria under 

which DOT, or agencies to which DOT 

delegates authority, will authorize 

prioritization of certain orders or 

contracts, as well as criteria under 

which DOT will issue orders allocating 

materials, services, or facilities. Because 

the rule mainly affects larger 

commercial transportation operations, 

DOT believes that small organizations 

and small governmental jurisdictions 

are unlikely to be affected by this rule. 

To date, DOT has not exercised its 

existing priorities authority and has 

only exercised its existing allocations 

authority for one aviation program and 

one sealift program, both of which rely 

on voluntary engagement by industry. 

Therefore, DOT has no basis on which 

to estimate the number of small 

businesses that might be affected by 

promulgation of this rule. 

Although DOT cannot determine 

precisely the number of small entities 

that are affected by this rule, for the 

reasons explained in section IV.D, DOT 

believes that the overall impact on such 

entities is not significant and, therefore, 

certifies that this rule will not have a 

significant economic impact on a 

substantial number of small entities. 

II. Background 

The Defense Production Act of 1950 

(Defense Production Act) (50 U.S.C. 

App. § 2061 et seq.) was enacted during 

the Korean War to ensure the 

availability of resources to meet national 

security needs. The Defense Production 

Act provides a number of important 

authorities to expedite and expand the 

supply of critical resources from the 

U.S. industrial base to support the 

national defense. While Defense 

Production Act provisions initially 

focused on DoD acquisition needs, 

several significant changes to the 

Defense Production Act’s definition of 

national defense have been added over 

time to expand the definition from 

military, energy, and space activities, to 

include emergency preparedness 

activities conducted pursuant to title VI 

of the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act (Stafford 

Act) (42 U.S.C. 5121 et seq.) and the 

protection and restoration of critical 

infrastructure. 

Section 101(a) of title I of the Defense 

Production Act (50 U.S.C. App. § 2071) 

authorizes the President: 

(1) To require that performance under 

contracts or orders (other than contracts of 

employment) which he deems necessary or 

appropriate to promote the national defense 

shall take priority over performance under 

any other contract or order, and, for the 

purpose of assuring such priority, to require 

acceptance and performance of such 

contracts or orders in preference to other 

contracts or orders by any person he finds to 

be capable of their performance, and (2) to 

allocate materials, services, and facilities in 

such manner, upon such conditions, and to 

such extent as he shall deem necessary or 

appropriate to promote the national defense. 

Executive Order 13603, National 

Defense Resources Preparedness (March 

16, 2012),1 delegates the President’s 

authority under section 101 of the 

Defense Production Act to the heads of 

several departments and agencies. The 

President has delegated this authority to 

the Secretary of Transportation with 

respect to all forms of civil 

transportation.2

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Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Rules and Regulations 59795 

(5) The Secretary of Commerce for all other 

materials, services, and facilities, including 

construction materials. 

3The other parts that will make up FPAS are: 

(1) Agricultural Priorities and Allocations System 

to be promulgated by the Department of 

Agriculture; 

(2) Defense Priorities and Allocations System 

promulgated by the Department of Commerce; 

(3) Energy Priorities and Allocations System to be 

promulgated by the Department of Energy; 

(4) Health Resources Priorities and Allocations 

System to be promulgated by the Department of 

Health and Human Service; and 

(5) Water Resources Priorities and Allocations 

System to be promulgated by the Department of 

Defense. 

Section 202 of Executive Order 13603 

provides that this delegated authority 

may only be used to support programs 

that have been determined in writing as 

necessary or appropriate to promote the 

national defense by the Secretary of 

Defense with respect to military 

production and construction, military 

assistance to foreign nations, military 

use of civil transportation, stockpiles 

managed by the Department of Defense, 

space, and directly related activities; the 

Secretary of Energy with respect to 

energy production and construction, 

distribution and use, and directly 

related activities; or the Secretary of 

Homeland Security with respect to all 

other national defense programs, 

including civil defense and continuity 

of Government. 

The Defense Production Act 

Reauthorization of 2009 (Pub. L. 111– 

67, September 30, 2009) requires each 

Federal agency with delegated authority 

under section 101 of the Defense 

Production Act to issue final rules 

establishing standards and procedures 

by which the priorities and allocations 

authority is used to promote the 

national defense, under both emergency 

and non-emergency conditions. 

Congress further directed that, to the 

extent practicable, the Federal agencies 

should work together to develop a 

consistent and unified Federal priorities 

and allocations system. 

In order to meet this mandate, DOT 

worked in conjunction with USDA, 

DOC, DoD, DOE, HHS, and DHS to 

develop common provisions that can be 

used by each Department in its own 

regulation. The six regulations to be 

promulgated by each Department with 

delegated Defense Production Act title I 

authority comprise the FPAS rules. 

DOT’s regulation is known as TPAS.3

DOT published an NPRM establishing 

the proposed structure for TPAS on 

February 15, 2011 (76 FR 8675). DOT 

solicited comments on the proposed 

rule, but not did receive any comments. 

However, DOT determined that two 

non-significant changes, discussed 

below, were necessary for additional 

clarity. In addition, Executive Order 

13603 updated certain definitions that 

are applicable to this rule and DOT has 

included those modifications, also 

discussed below, in this final rule. 

Therefore, subject to any comments on 

the revised definitions, DOT adopts the 

proposed rule with changes discussed 

below. 

III. Section-by-Section Analysis 

Subpart A—General 

Section 33.1 Purpose of this part. 

This section explains that the purpose 

of this rule is to provide guidance and 

procedures for use of the Defense 

Production Act priorities and 

allocations authority with respect to 

civil transportation, in accordance with 

the delegation of authority provided in 

section 201 of Executive Order 13603. 

This section also lists other agency 

regulations that, along with this 

regulation, form FPAS. 

Section 33.2 Priorities and 

allocations authority. This section 

summarizes the delegations of priorities 

and allocations authority in section 201 

of Executive Order 13603 and explains 

that these delegated authorities may 

only be used to support programs that 

have been determined in writing as 

necessary or appropriate to promote the 

national defense by the Secretaries of 

Defense, Energy, or Homeland Security 

in their respective areas of jurisdiction, 

as specified in section 202 of Executive 

Order 13603. 

Section 33.3 Program eligibility. 

This section lists the categories of 

programs eligible for priorities and 

allocations support, in accordance with 

the definition of ‘‘national defense’’ in 

section 702 of the Defense Production 

Act (50 U.S.C. App. § 2152). 

Subpart B—Definitions 

Section 33.20 Definitions. This 

section contains definitions used in this 

part. Some definitions are drawn from 

other sources, as follows: 

• Section 702 of the Defense 

Production Act (50 U.S.C. App. 

§ 2152)—‘‘critical infrastructure,’’ 

‘‘facilities,’’ ‘‘homeland security,’’ 

‘‘materials,’’ ‘‘national defense,’’ 

‘‘person,’’ and ‘‘services.’’ 

• Section 801 of Executive Order 

13603—‘‘civil transportation,’’ 

‘‘energy,’’ ‘‘farm equipment,’’ 

‘‘fertilizer,’’ ‘‘food resources,’’ ‘‘food 

resource facilities,’’ ‘‘health resources,’’ 

and ‘‘water resources.’’ 

• The current Defense Priorities and 

Allocations System (DPAS) regulation— 

‘‘allotment’’ (with technical 

modifications), ‘‘approved program’’ 

(with technical modifications), 

‘‘construction,’’ ‘‘delegate agency,’’ 

‘‘directive,’’ ‘‘item,’’ ‘‘maintenance and 

repair and operating supplies’’ or 

‘‘MRO,’’ ‘‘official action’’ (with 

technical modifications), ‘‘rated order,’’ 

and ‘‘set-aside’’ (with technical 

modifications). 

• Section 602 of the Stafford Act (42 

U.S.C. 5195a)—‘‘emergency 

preparedness’’ and ‘‘hazard.’’ 

• Section 18.3 of 49 Code of Federal 

Regulations—‘‘local government’’ and 

‘‘state.’’ 

The definitions of ‘‘allocation,’’ 

‘‘allocation authority,’’ and ‘‘allocation 

order’’ are based on language in section 

101 of the Defense Production Act that 

describes the allocation authority of the 

President. 

‘‘Defense Production Act’’ means the 

Defense Production Act of 1950, as 

amended (50 U.S.C. App. § 2061 et seq.). 

‘‘Planning order’’ defines an 

administrative tool used by DOT’s 

Maritime Administration. 

‘‘Resource agency’’ refers to one of the 

six Federal departments that has been 

delegated Defense Production Act 

priorities and allocations authority 

under section 201 of Executive Order 

13603. 

‘‘Secretary’’ refers to the Secretary of 

Transportation. 

‘‘Selective Service Act’’ refers to 

Section 18 of the Selective Service Act 

of 1948 (50 U.S.C. App. § 468). 

‘‘Stafford Act’’ refers to title VI 

(Emergency Preparedness) of the Robert 

T. Stafford Disaster Relief and 

Emergency Assistance Act (42 U.S.C. 

5195–5197g). 

Executive Order 13603 contains 

modifications to the following 

definitions: ‘‘civil transportation,’’ 

‘‘energy,’’ ‘‘food resources,’’ ‘‘food 

resource facilities,’’ ‘‘health resources,’’ 

and ‘‘water resources.’’ The most 

significant change is the movement of 

potable water packaged in commercially 

marketable containers from the 

jurisdiction of the DoD to the 

jurisdiction of the USDA. All other 

modifications are intended to 

modernize or clarify existing 

definitions. 

Subpart C—Placement of Rated Orders 

Section 33.30 Delegation of 

authority. This section describes the 

delegation of priorities and allocations 

authority from the President to the 

Secretary of Transportation for all forms 

of civil transportation. 

Section 33.31 Priority ratings. This 

section explains the following: ‘‘DO’’ 

and ‘‘DX’’ rating symbols; program 

identification symbols; order of 

precedence for directives and ratings; 

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59796 Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Rules and Regulations 

4 In 2007 DOT and DHS entered into a 

Memorandum of Understanding transferring the 

responsibility for evacuations and commodity and 

equipment movements to the Federal Emergency 

Management Agency (FEMA). New authority given 

to FEMA in the Post-Katrina Emergency 

Management Reform Act of 2006 necessitated 

redefining DOT’s role for providing emergency 

transportation services and for designating the 

Federal lead for planning, coordinating and 

conducting evacuations of the general population. 

5 DOT’s contract with Landstar Express America, 

Inc. contained the following requirements for Rapid 

Response Capability: 

Within one (1) hour of receiving the initial Order 

for Service (OFS) from the Contracting Officer, the 

Contractor (Landstar) shall acknowledge receipt of 

the OFS by electronic commerce or fax. 

Within four (4) hours of receipt of an OFS, the 

Contractor shall make transportation equipment 

available at the shipment place of origin to 

commence movement of cargo and passengers, 

using air and surface modes of transportation. The 

Contractor shall meet all pickup and transit 

deadlines. 

and priority ratings that consist of a 

rating symbol and a program 

identification symbol. 

A ‘‘DX’’ rating is reserved for those 

services or items that are determined to 

support programs that are of the highest 

national defense urgency based on the 

requesting entity’s mission objectives. A 

‘‘DX’’ rating takes precedence over a 

‘‘DO’’ rating. The Secretary of 

Transportation must approve all 

requests for a ‘‘DX’’ rating pertaining to 

civil transportation resources. 

Program Identification Symbols (PIS) 

are used to identify approved programs, 

meaning a program that has been 

determined by the Secretaries of DoD, 

DHS, or DOE, as appropriate, as 

necessary to promote the national 

defense. DOT currently has no approved 

programs, but anticipates working with 

DOC, DHS, DoD or DOE, as appropriate, 

in the near future to develop approved 

programs and will update Schedule I to 

TPAS as necessary. 

In the NPRM, DOT proposed a PIS for 

DOT-approved programs that would 

contain the letter ‘‘T’’ followed by a 

letter and a number; for example, T–L1. 

DOT solicited comments on this 

proposed PIS structure, but did not 

receive any comments. All other 

agencies issuing FPAS rules currently 

use or are proposing to use a four-digit 

symbol, consisting of a letter and 

number for the approved program, such 

as A1, that is preceded by the priority 

rating code, for example DO–A1 or DX– 

A1. In order to ensure consistency 

among the regulations and to reduce the 

likelihood of confusion on industry and 

stakeholders receiving rated orders 

under other FPAS regulations, DOT is 

adopting a four-digit symbol as well. 

DOT’s PIS for approved programs will 

contain the letter ‘‘T’’ followed by a 

number, for example, T1. All approved 

programs will have equal status. The 

PIS will be combined with the 

appropriate priority rating authority, 

either DX or DO, to form the priority 

rating, for example DO–T1 or DX–T1. 

Section 33.32 Elements of a rated 

order. This section describes the four 

elements that must be included in a 

contract or order to make it a ‘‘rated 

order,’’ in accordance with the 

standards and procedures provided in 

this part. The four elements are: (1) A 

priority rating; (2) specific delivery 

date(s) for materials or services covered 

in the rated order; (3) the signature of an 

individual authorized to place the rated 

order; and (4) a statement describing 

what is required of the rated order 

recipient, in accordance with 

procedures provided in this part. 

This section includes a provision for 

an additional statement to be included 

in a rated order involving emergency 

preparedness, which will require 

quicker action by the recipient to accept 

or reject the order. The justification for 

the expedited timeframes is explained 

below in the section 33.33 discussion. 

Section 33.33 Acceptance and 

rejection of rated orders. This section 

describes mandatory and optional 

conditions for acceptance or rejection of 

rated orders, as well as customer 

notification timeframes pertaining to 

acceptance or rejection. In general, a 

person is required to accept a rated 

order if the person normally supplies 

the materials or services covered by the 

rated order and must do so regardless of 

any other orders on hand. Persons are 

prohibited from charging higher prices, 

imposing different terms, or any other 

discriminatory practices for the rated 

order that are different from a 

comparable unrated order. 

A person is required to reject a rated 

order if unable to fill the order by the 

specified delivery date(s) or if the order 

will interfere with delivery under 

another rated order with a comparable 

or higher priority rating. In addition, a 

person is required to reject a rated order 

if the person is prohibited by law from 

meeting the terms of the order; for 

example, the provider of the services 

contemplated in the order does not have 

current operating authority to perform 

the service. A person has the option of 

rejecting a rated order if any one of a 

number of other conditions set forth in 

the regulation exists. 

In the NPRM, DOT proposed that 

under non-emergency conditions, the 

recipient of a rated order be required to 

accept or reject the rated order within 

fifteen calendar days for a ‘‘DO’’-rated 

order or ten working days for a ‘‘DX’’- 

rated order. (See § 33.33(d)). DOT 

proposed calendar days instead of 

working days in order to provide greater 

specificity for deadlines and sought 

public comment on the matter. DOT did 

not receive any comments. However, 

because of the potential for interaction 

and overlap with priority orders issued 

under other FPAS regulatory schemes, 

DOT believes that the timeframes 

should be consistent among the FPAS 

rules; therefore, DOT is adopting 

working days instead of calendar days 

to conform to the timeframes in the 

other FPAS rules. For purposes of this 

regulation, a working day is a day that 

the recipient of a rated order is open for 

business. Thus, if a recipient of a rated 

order normally closes its operations the 

week between Christmas and New 

Year’s, that time would not be 

considered as working days and would 

not be counted against the rated order 

timeframe. 

While the deadlines discussed above 

are appropriate for non-emergency 

circumstances, they are too long for 

emergency conditions when quick 

procurement actions may be needed to 

help save lives, protect property, or 

restore services. Transportation services 

are unique in that they are often the first 

services needed to move people out of 

harm’s way and to move rescue and 

response personnel and supplies into a 

disaster area; thus, transportation 

services often must be marshaled on 

very short notice. Under TPAS, orders 

placed for the purpose of emergency 

preparedness must be accepted or 

rejected within 6 hours from receipt of 

the order if the order is issued in 

response to a hazard that has occurred 

and within 12 hours from receipt of the 

order if the order is issued to prepare for 

an imminent hazard. 

As explained in the NPRM, prior to 

2008, DOT was the lead Federal agency 

responsible for providing and managing 

emergency transportation services, 

including those necessary for mass 

evacuations.4 Our experiences while 

carrying out this mission, which 

included managing the massive 

transportation needs for the evacuation 

of persons and the movement of 

supplies, equipment and teams in 

response to Hurricanes Katrina and Rita, 

confirm that transportation providers 

can respond within these expedited 

timeframes. Specifically, the contract 

that DOT had in place for transportation 

services required the contractor to 

acknowledge an order for service within 

one hour of receiving the order and to 

make transportation equipment 

available at the shipment place of origin 

to begin moving cargo and passengers 

within four hours from receipt of the 

order for service.5

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Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Rules and Regulations 59797 

6Legislative history indicates that Congress was 

concerned that national defense requirements, 

during times of emergency, could consume much of 

the output of key industrial sectors and selected 

producers within some sectors. Allocations 

authority was viewed as a means to ensure an 

equitable distribution of national defense demand 

among potential suppliers to avoid disproportionate 

impacts on each supplier’s share of the civilian 

market. 

Note that DOT is only requiring 

acceptance or rejection of a rated order 

within an expedited timeframe and not 

the actual fulfillment of the order within 

that timeframe. The expedited response 

periods are necessary in order for DOT 

to rapidly identify and obtain sufficient 

transportation resources to meet 

emergency response needs. 

DOT is mindful, however, that some 

circumstances may necessitate closer 

coordination between DOT and the 

potential recipient of a rated order. For 

example, if a rated order is placed in 

preparation for an imminent hazard, 

such as a hurricane that is projected to 

make landfall in 13 hours, DOT 

obviously does not wish to learn at the 

end of the 12-hour window that the 

proposed supplier is unable to accept 

the rated order. In these situations, DOT 

will work closely with industry to 

identify and resolve any potential issues 

in order to meet the transportation 

requirements. 

Not all regulations promulgated under 

FPAS will contain such expedited 

notification requirements because, 

unlike transportation resources, those 

resources normally are not required 

immediately for emergency response. 

However, for any orders issued under 

TPAS that ‘‘flow down’’ from the prime 

contractor to a subcontracted supplier of 

a necessary service, component, or part, 

the requirements of TPAS will apply to 

all subcontractors in the procurement or 

distribution chain. Therefore, 

transportation service providers should 

work with their suppliers to ensure they 

are aware that they may be asked to 

provide necessary services, parts, or 

components on an expedited basis. 

Section 33.34 Preferential 

scheduling. This section describes: (1) 

When a recipient of a rated order must 

modify production or delivery 

schedules to satisfy the delivery 

requirements of a rated order; (2) the 

order of precedence for rated, unrated, 

and conflicting orders; and (3) the use 

of inventoried production items when 

needed to fill a rated order. 

Section 33.35 Extension of priority 

ratings. This section requires that the 

recipient of a rated order must, in turn, 

use rated orders with suppliers to obtain 

items or services needed to fill a rated 

order. The requirement applies to all 

contractors and subcontractors 

throughout the procurement chain 

necessary to fill the rated order. 

Section 33.36 Changes or 

cancellations of priority ratings and 

rated orders. This section describes the 

procedures for changing or cancelling a 

priority rating or the provisions of a 

rated order. In addition, this section 

lists types of modifications that do not 

constitute a new rated order. 

Section 33.37 Use of rated orders. 

This section describes the process and 

procedures for when the recipient of a 

rated order: (1) Must use rated orders to 

obtain items and services needed to 

fulfill the rated order; (2) may use a 

rated order to replace inventoried items 

that were used to fulfill the order; (3) 

may combine orders with different 

priority ratings or with unrated orders; 

and (4) may forgo use of rated orders for 

orders below certain thresholds. 

In the NPRM, DOT proposed to use 

the letter ‘‘E’’ for combined programs, 

resulting in a PIS of DO–T–E plus the 

number. As previously mentioned, DOT 

is mindful of the need for consistency 

among the FPAS regulations, which will 

all use a four-digit symbol for combined 

programs. Therefore, although DOT did 

not receive any comments on its 

proposed PIS for combined programs, 

we are adopting ‘‘T9’’ as the PIS for 

combined programs. The ‘‘T9’’ will be 

combined with the appropriate priority 

rating resulting in a DO–T9 or a DX–T9 

PIS for any combined program. 

Section 33.38 Limitations on placing 

rated orders. This section describes 

specific circumstances when the use of 

rated orders is prohibited. This section 

also prohibits the use of TPAS to obtain 

rated orders for a resource under the 

resource jurisdiction of other agencies 

with delegated Defense Production Act 

priorities and allocations authority, 

unless specifically authorized by the 

resource agency. 

Subpart D—Special Priorities 

Assistance 

Section 33.40 General provisions. 

This section explains the circumstances 

and procedures under which DOT will 

provide assistance in resolving 

problems related to priority rated 

contracts and orders. This section also 

lists the DOT points of contact and the 

form to be used to request assistance. 

Section 33.41 Requests for priority 

rating authority. This section establishes 

the procedures to request rating 

authority under special circumstances. 

DOT may grant priority ratings for items 

and services not normally rated under 

the regulation in order to prevent a 

delay of a rated order. This section also 

specifies that rating authority for 

production or construction equipment 

must come from the Department of 

Commerce. Finally, this section 

explains when DOT may authorize the 

use of a priority rating on an order to a 

supplier in advance of the issuance of 

a rated prime contract, and the factors 

DOT will consider in deciding whether 

to grant such a request. 

Section 33.42 Examples of 

assistance. This section lists examples 

of when special priority assistance may 

be provided. 

Section 33.43 Criteria for assistance. 

This section requires that a request for 

special priorities assistance be timely, 

that there be an urgent procurement 

need for the item, and that the applicant 

make a reasonable effort to resolve the 

problem for which assistance is needed. 

Section 33.44 Instances where 

assistance may not be provided. This 

section lists examples of when special 

priority assistance will not be provided. 

Section 33.45 Assistance programs 

with other nations. Reserved. 

Subpart E—Allocation Actions 

Section 33.50 Policy. This section 

explains the policy of the Federal 

Government regarding use of the 

allocations authority, which is based on 

the statutory language in section 101 of 

the Defense Production Act and the 

legislative history of section 101.6

Specifically, allocation authority will be 

used only when priority authority is 

unable to provide a sufficient supply of 

a material, service, or facility to meet 

the national defense, or when the use of 

priority authority would cause a severe 

and prolonged disruption in the supply 

of materials, services, or facilities 

available to support normal U.S. 

economic activities. 

Allocation authority will not be used 

to ration materials or services at the 

retail level. In other words, allocation 

authority will not be used to control 

how much of a product or service a 

person may have for personal use. For 

example, DOT could use allocation 

authority to require the nation’s bus 

companies to dedicate 40% of their bus 

fleet to a designated emergency, but 

DOT not could use allocation authority 

to tell a bus company how to distribute 

its buses to serve its commercial 

customers or to tell a bus company how 

many tickets it could sell to persons in 

a given month. 

Allocation orders will be distributed 

equitably among similarly situated 

suppliers of the resources being 

allocated and will not require any 

person to relinquish a disproportionate 

share of the civilian market. Allocation 

authority will not apply to resources 

owned by the Federal Government, as 

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7CRAF was formed through a joint agreement 

between DoD and the Department of Commerce. 

Executive Order 10999 placed responsibility for 

administration of the CRAF program in the 

Department of Commerce as a function of the Office 

of Emergency Transportation. In 1967, the Office of 

Emergency Transportation transferred in its entirety 

with its mission, functions and staff into the new 

Department of Transportation. Responsibility for 

carrying out the Secretary’s role with respect to the 

CRAF program now resides with the Office of 

Intelligence, Security and Emergency Response. 

those resources may be used by the 

controlling Federal entity in accordance 

with other governing laws. Nor, 

generally speaking, will allocation 

authority apply to resources owned by 

States, local governments or Native 

American tribes, as that could 

potentially undermine other Federal 

laws. For example, the Stafford Act is 

designed ‘‘to provide an orderly and 

continuing means of assistance by the 

Federal Government to States and local 

governments in carrying out their 

responsibilities to alleviate the suffering 

and damage which results from * * * 

disasters * * *.’’ 42 U.S.C. 5121(b). 

Thus, it would be counterproductive for 

the Federal Government to consider 

allocating for its own use the very 

resources the State, local or tribal 

government could be counting on as 

part of its response efforts. 

The Civil Reserve Air Fleet (CRAF) 

and the Voluntary Intermodal Sealift 

Agreement (VISA) are two examples of 

DOT’s use of its allocation authority.7

Concerning CRAF, under the terms of a 

Memorandum of Understanding, DOT 

develops plans and allocates aircraft to 

the CRAF program based on DoD 

requirements. DOT advises DoD if it 

intends to allocate fewer aircraft than 

requested by DoD, notifies DoD if a 

particular level of CRAF activation will 

have a serious adverse impact on the 

civil air carrier’s ability to provide 

essential service, and works with DoD to 

identify alternatives or determine ways 

to minimize the impact. DOT publishes 

a periodic allocation of aircraft, by 

registration or ‘‘N’’ number, of each 

airline participating in the CRAF 

program. 

The VISA program is a preparedness 

program designed to make intermodal 

shipping services and systems available 

to DoD as required to support the 

emergency deployment and sustainment 

of U.S. military forces. This is done 

through cooperation among the 

maritime industry, DOT and DoD 

pursuant to a voluntary agreement 

entered into in accordance with Section 

708 of the Defense Product Act (50 

U.S.C. App. § 2158). During a Stage III 

activation, the Secretary of DoD will 

request the Secretary of DOT to allocate 

sealift capacity based on DoD 

requirements. 

Section 33.51 General procedures. 

The procedures set out in this section 

and in section 33.52 are intended to 

provide a reasonable assurance that 

allocation authority will be used only in 

situations where such authority is 

justified. Section 33.51 sets out the 

specific requirements and findings that 

DOT must meet before it can use its 

allocation authority. 

One requirement is for DOT to obtain 

a written determination from either 

DoD, DHS or DOE, as appropriate, that 

the program DOT intends to support 

through its allocation authority is 

necessary or appropriate to support the 

national defense. As previously 

mentioned, section 202 of Executive 

Order 13603 requires such a finding 

before DOT can take an allocation 

action. Additionally, DOT is required to 

provide a detailed description of the 

situation creating the need for allocation 

and the specific objectives to be 

obtained through the allocation action; 

a list of the materials, services, or 

facilities to be allocated, and of the 

sources that will be subject to the 

allocation action; a detailed description 

of the requirements to be contained in 

the allocation action, to include the 

percentage or quantity of capacity to be 

allocated and the duration of the 

allocation action; and an evaluation of 

the potential impact on the civilian 

market and proposed actions to mitigate 

any disruption of the civilian market. 

Section 33.52 Controlling the 

general distribution of a material in the 

civilian market. This section provides 

procedures for making the findings 

required by section 101(b) of the 

Defense Production Act and section 

201(e) of Executive Order 13603. 

Defense Production Act section 101(b) 

states that the priorities and allocations 

authority shall not be used to control 

the general distribution of any material 

in the civilian market unless the 

President finds (1) that such material is 

a scarce and critical material essential to 

the national defense, and (2) that the 

requirements of the national defense for 

such material cannot otherwise be met 

without creating a significant 

dislocation of the normal distribution of 

such material in the civilian market to 

such a degree as to create appreciable 

hardship. Section 201(e) of Executive 

Order 13603 directs each Secretary with 

delegated authority under section 101 of 

the Defense Production Act to make the 

finding required by section 101(b) and 

submit the finding for the President’s 

approval through the Assistant to the 

President and National Security Advisor 

and the Assistant to the President for 

Homeland Security and 

Counterterrorism. By definition under 

the Defense Production Act, services, 

including transportation services, are 

not considered a ‘‘material’’ as 

contemplated in section 101(b) of the 

Defense Production Act or section 

201(e) of Executive Order 13603. 

Section 33.53 Types of allocation 

orders. This section describes the three 

types of allocation orders DOT will 

issue: A set-aside; an allocation 

directive; or an allotment. A set-aside is 

an official action that requires a person 

to reserve a resource capacity in 

anticipation of receipt of rated orders. 

An allocation directive is an official 

action that requires a person to take or 

refrain from taking certain actions in 

accordance with its provisions. For 

example, an allocation directive could 

require a person to stop or reduce 

production of an item or service; 

prohibit the use of selected materials, 

services or facilities; divert supply of 

one type of material, service or facility 

to another; or supply a specific quantity, 

size, shape, and type of an item or 

service within a specific time period. 

An allotment is an official action that 

specifies the maximum quantity of a 

material, service, or facility authorized 

for use in a specific program or 

application. 

Section 33.54 Elements of an 

allocation order. This section describes 

the minimum elements of an allocation 

order. These elements are: (1) A detailed 

description of the required allocation 

action(s); (2) specific start and end 

calendar dates for each required 

allocation action; (3) the written 

signature on a manually placed order, or 

the digital signature or name on an 

electronically placed order, of the 

Secretary of DOT, which will certify 

that the order is authorized under this 

regulation and that the requirements of 

this part are being followed; (4) a 

statement that the order is certified for 

national defense use and that recipients 

are required to comply with the order; 

and (5) a copy of the TPAS regulation. 

Section 33.55 Mandatory acceptance 

of an allocation order. This section 

requires a person to accept and comply 

with allocation orders if the person is 

capable of complying. If a person is 

unable to comply fully with the 

required actions specified in an 

allocation order, the person is required 

to notify DOT immediately, explain the 

extent to which compliance is possible, 

and give reasons why full compliance is 

not possible. Furthermore, notifying 

DOT of possible non-compliance does 

not release the person from complying 

with the allocation order to the extent 

possible. 

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This section also states that a person 

may not discriminate against an 

allocation order in any manner, such as 

by charging higher prices or imposing 

terms and conditions on allocation 

orders that are different from what the 

person imposed on contracts or orders 

for the same resource prior to receiving 

the allocation order. 

Section 33.56 Changes or 

cancellations of an allocation order. 

This section states that DOT may 

modify or cancel an allocation order. 

Subpart F—Official Actions 

Section 33.60 General provisions. 

This section sets out the specific official 

actions that DOT may take to implement 

the provisions of this regulation. These 

official actions include Rating 

Authorizations, Directives, Planning 

Orders, and Memoranda of 

Understanding. 

Section 33.61 Rating authorizations. 

This section defines a rating 

authorization as an official action 

granting priority rating authority. 

Section 33.62 Directives. This 

section defines a directive as an official 

action that requires a person to take or 

refrain from taking certain actions in 

accordance with its provisions. A 

priority directive takes precedence over 

rated orders, and allocation directives 

take precedence over a priority 

directive. 

Section 33.63 Memoranda of 

Understanding. This section explains 

that a Memorandum of Understanding is 

an official action that may be issued to 

reflect an agreement resolving a request 

for special priorities assistance. A 

Memorandum of Understanding may 

not be used to alter scheduling between 

rated orders, authorize the use of 

priority ratings, impose restrictions 

under this regulation, or take other 

official actions. 

Subpart G—Compliance 

Section 33.70 General provisions. 

This section clarifies that DOT has the 

authority to enforce or administer the 

Defense Production Act, this regulation, 

or an official action. Additionally, this 

section states that willful violations of 

title I or section 705 of the Defense 

Production Act, this regulation, or an 

official DOT action, are criminal acts, 

punishable as provided in the Defense 

Production Act, and as set forth in 

§ 33.74 below. 

Section 33.71 Audits and 

investigations. This section provides the 

procedures for conducting audits and 

investigations to ensure that the 

provisions of the Defense Production 

Act and other applicable statutes, this 

regulation, and official actions have 

been properly followed. This provision 

is limited to activities conducted under 

DPA authorities and does not limit the 

authority of DOT elements to initiate 

and conduct audits, investigations, or 

other inquiries under their specific 

statutes or authorities, nor does it affect 

the process for such audits, 

investigations or inquiries. 

Section 33.72 Compulsory process. 

This section explains the procedures 

DOT may use to seek a compulsory 

process if a person refuses to permit a 

duly authorized DOT representative to 

have access to any premises or any 

necessary information. For purposes of 

this regulation, compulsory process 

means the institution of appropriate 

legal action, including ex parte 

application for an inspection warrant or 

its equivalent in any forum of 

appropriate jurisdiction. Furthermore, 

compulsory process under this 

regulation may be sought in advance of 

an audit or investigation if DOT believes 

a person will refuse to comply with the 

audit or investigation. 

Section 33.73 Notification of failure 

to comply. This section provides 

procedures for notification of failure to 

comply with the Defense Production 

Act, other applicable statutes, this 

regulation, or an official DOT action. 

Section 33.74 Violations, penalties, 

and remedies. This section sets out the 

penalties and related actions the 

Government may take for violations of 

the provisions of title I or sections 705 

or 707 of the Defense Production Act, 

the priorities provisions of the Selective 

Service Act, when applicable, this 

regulation, or an official DOT action. 

Section 33.75 Compliance conflicts. 

This section require persons to 

immediately notify DOT if compliance 

with any provision of the Defense 

Production Act, other applicable 

statutes, this part, or an official action 

will prevent a person from filling a rated 

order or from complying with another 

provision of the Defense Production 

Act, other applicable statutes, this 

regulation, or an official action. 

Subpart H—Adjustments, Exceptions, 

and Appeals 

Section 33.80 Adjustments or 

exceptions. This section describe the 

procedures necessary to request an 

adjustment or exception to a provision 

of this regulation or an official action on 

the grounds that it will create an undue 

or exceptional hardship or compliance 

is contrary to the intent of the Defense 

Production Act or this regulation. Such 

requests must be submitted in writing 

and the submission of a request for 

adjustment or exception does not relieve 

the requester from compliance while the 

request is being considered by DOT. 

Section 33.81 Appeals. This section 

provides procedures and timeframes for 

appealing a decision denying relief from 

a request for an adjustment or exception 

under this regulation. This section 

provides for an expedited procedure for 

appeals involving a rated order placed 

for the purpose of emergency 

preparedness. 

Subpart I—Miscellaneous Provisions 

Section 33.90 Protection against 

claims. This section provides that a 

person shall not be held liable for 

damages or penalties for any act or 

failure to act resulting directly or 

indirectly from compliance with any 

provision of this regulation or an official 

action. This ‘‘hold harmless’’ provision 

applies even if any provision of this 

regulation or action is subsequently 

declared to be invalid by judicial or 

other competent authority. 

Section 33.91 Records and reports. 

This section requires persons to create 

and preserve for at least three years 

accurate and complete records of any 

transaction covered by this regulation or 

an official action. This section also 

details the various requirements 

pertaining to the required records and 

reports. In addition, this section 

describes the confidentiality provision 

of the Defense Production Act 

pertaining to information submitted 

under the Defense Production Act or 

this regulation. 

Section 33.92 Applicability of this 

part and official actions. This section 

establishes the jurisdictional 

applicability of this regulation. 

Section 33.93 Communications. This 

section provides DOT contact 

information for communications 

concerning this regulation. 

IV. Public Comments Received 

DOT received no comments on these 

proposed regulations or on the proposed 

Form OST F 1254. With the exceptions 

discussed above, DOT finalizes the rule 

without change. 

V. Regulatory Analyses and Notices 

A. Executive Orders 12866 and 13563— 

Regulatory Planning and Review 

This final rule is a ‘‘significant 

regulatory action’’ under section 3(f) of 

Executive Order 12866, Regulatory 

Planning and Review. Executive Order 

13563 is supplemental to and reaffirms 

the principles, structures, and 

definitions governing regulatory review 

that were established in Executive Order 

12866. In addition, Executive Order 

13563 specifically requires agencies to: 

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59800 Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Rules and Regulations 

(1) Involve the public in the regulatory 

process; (2) promote simplification and 

harmonization through interagency 

coordination; (3) identify and consider 

regulatory approaches that reduce 

burden and maintain flexibility; (4) 

ensure the objectivity of any scientific 

or technological information used to 

support regulatory action; consider how 

to best promote retrospective analysis to 

modify, streamline, expand, or repeal 

existing rules that are outmoded, 

ineffective, insufficient or excessively 

burdensome. While the requirements 

under title I of the Defense Production 

Act have been in existence for years, 

these regulations are new to the 

transportation industry and could be 

considered to raise novel legal or policy 

issues under section 3(f)(4) of Executive 

Order 12866. The rule is not 

economically significant, however, as it 

would not have an annual economic 

impact of over $100 million. 

B. Executive Order 13132—Federalism 

This final rule has been analyzed in 

accordance with the principles and 

criteria contained in Executive Order 

13132, Federalism. This final rule will 

not have a substantial direct effect on, 

or sufficient federalism implications for, 

the States, nor will it limit the 

policymaking discretion of the States. 

Therefore, the consultation 

requirements of Executive Order 13132 

do not apply. 

C. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

This final rule has been analyzed in 

accordance with the principles and 

criteria contained in Executive Order 

13175, Consultation and Coordination 

with Indian Tribal Governments. 

Because this final rule does not 

significantly or uniquely affect the 

communities of the Indian tribal 

governments and does not impose 

substantial direct compliance costs, the 

funding and consultation requirements 

of Executive Order 13175 do not apply. 

D. Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires an agency to 

review regulations to assess their impact 

on small entities unless the agency 

determines that a rule is not expected to 

have significant impact on a substantial 

number of small entities. 

Potentially Affected Small Entities 

Small entities include small 

businesses, small organizations and 

small governmental jurisdictions. For 

purposes of assessing the impacts of this 

final rule on small entities, a small 

business, as described in the Small 

Business Administration’s Table of 

Small Business Size Standards Matched 

to North American Industry 

Classification System Codes (August 

2008 Edition), has a maximum annual 

revenue of $33.5 million and a 

maximum of 1,500 employees (for some 

business categories, these number are 

lower). A small governmental 

jurisdiction is a government of a city, 

town, school district or special district 

with a population of less than 50,000. A 

small organization is any not-for-profit 

enterprise that is independently owned 

and operated and is not dominant in its 

field. 

This regulation sets criteria under 

which DOT, or agencies to which DOT 

delegates authority, will authorize 

prioritization of certain orders or 

contracts, as well as criteria under 

which DOT will issue orders allocating 

materials, services, or facilities. Because 

the rule mainly affects larger 

commercial transportation operations, 

DOT believes that small organizations 

and small governmental jurisdictions 

are unlikely to be affected by this rule. 

To date, DOT has not exercised its 

existing priorities authority and has 

only exercised its existing allocations 

authority for one aviation program and 

one sealift program, both of which rely 

on voluntary engagement by industry. 

Therefore, DOT has no basis on which 

to estimate the number of small 

businesses that might be affected by 

promulgation of this rule. 

Impacts 

Although DOT cannot determine 

precisely the number of small entities 

that are affected by this rule, DOT 

believes that the overall impact on such 

entities is not significant. There are two 

components in the rule: prioritization 

and allocation. Under prioritization, 

DOT or its Delegate Agency designates 

certain orders as one of two possible 

rating levels. Once designated, the order 

is considered a ‘‘rated order.’’ A 

recipient of a rated order must give it 

priority over an unrated order or an 

order with a lower priority rating. A 

recipient of a rated order may place 

orders at the same priority level with 

suppliers and subcontractors for 

supplies and services necessary to fulfill 

the recipient’s rated order and the 

suppliers and subcontractors must treat 

the request from the rated order 

recipient as a rated order with the same 

priority level as the original rated order. 

This rule does not require recipients to 

fulfill rated orders if the price or terms 

of sale are not consistent with the price 

or terms of sale of similar non-rated 

orders. In addition, the rule provides a 

defense from liability for damage or 

penalties for actions taken in, or 

inactions required for, compliance with 

the rule. 

Although rated orders could require a 

company to fill one order prior to filling 

another, this would not necessarily 

require a reduction in the total volume 

or orders filled. In fact, in most 

instances rated orders will be fulfilled 

in addition to other (unrated) contracts 

and this could actually increase the total 

amount of business for a firm that 

receives a rated contract. Additionally, 

this rule does not require the recipient 

of a rated order to reduce prices or 

provide a rated order with more 

favorable terms than a similar non-rated 

order. Thus, the economic effects on the 

rated order recipient of having to 

substitute a rated order for a non-rated 

order are likely to be mutually 

offsetting, resulting in no net economic 

impact. 

Allocations could be used to control 

the general distribution of materials or 

services in the civilian market. Specific 

allocation actions that DOT might take 

are as follows: 

Set-aside: an official action that requires a 

person to reserve resource capacity in 

anticipation of receipt of rated orders. 

Allocations directive: an official action that 

requires a person to take or refrain from 

taking certain actions in accordance with its 

provisions. An allocation directive can 

require a person to stop or reduce production 

of an item, prohibit the use of selected items, 

or divert supply of one type of product to 

another, or to supply a specific quantity, size, 

shape, and type of an item within a specific 

time period. 

Allotment: an official action that specifies 

the maximum quantity of an item authorized 

for use in a specific program or application. 

Allocations will be ordered only in 

extraordinary circumstances, other than 

in the two well-established, voluntary 

programs discussed above. Furthermore, 

DOT believes that the provisions of 

section 701(e) of the Defense Production 

Act, which requires that small 

businesses be considered in allocations, 

indicate that any impact on small 

business will not be significant and 

may, in fact, provide an economic 

benefit to small businesses. 

Conclusion 

Although DOT cannot precisely 

determine the number of small entities 

that would be affected by this rule, DOT 

believes that the overall impact on such 

entities will not be significant and, 

therefore, for the reasons set forth above, 

I certify that this rule will not have a 

significant economic impact on a 

substantial number of small entities. 

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Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Rules and Regulations 59801 

E. Paperwork Reduction Act 

This rule contains an information 

collection requirement that is subject to 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520). The Office of 

Management and Budget (OMB) is 

reviewing the information collection 

requirement and will provide an OMB 

control number upon completion. DOT 

will publish a separate notice in the 

Federal Register once the collection is 

approved and a control number is 

assigned. The public reporting burden 

for submission of Form OST F 1254 is 

an average of 30 minutes per response, 

including the time for reviewing 

instructions, searching existing data 

sources, gathering and maintaining the 

data needed, and completing and 

reviewing the collection of information. 

OMB is required to make a decision 

concerning the collection of information 

requirements contained in this final rule 

between 30 and 60 days after 

publication of this document in the 

Federal Register. Therefore, a comment 

to OMB is best assured of having its full 

effect if OMB receives it within 30 days 

of publication. 

Send comments on this burden 

estimate or any other aspect of the 

collection of information to the Office of 

Management and Budget, Attention: 

Desk Officer for the Office of the 

Secretary of Transportation, Office of 

Information and Regulatory Affairs, 

Washington, DC 20505. Comments 

should also be sent to the Department of 

Transportation, Attn: Defense 

Production Act Activities Coordinator, 

Office of Intelligence, Security, and 

Emergency Response, 1200 New Jersey 

Avenue SE., Washington DC 20590. 

No person is required to respond to or 

shall be subject to a penalty for failure 

to comply with a collection of 

information subject to the Paperwork 

Reduction Act, unless that collection of 

information displays a currently valid 

OMB Control Number. 

List of Subjects in 49 CFR Part 33 

Administrative practice and 

procedure, Business and industry, 

Government contracts, National 

Defense, Reporting and recordkeeping 

requirements, Strategic and critical 

materials, Transportation. 

Issued in Washington, DC on September 

20, 2012. 

Ray LaHood, 

Secretary of Transportation. 

In consideration of the foregoing, the 

Department is adding Part 33 of Title 49, 

Code of Federal Regulations, to read as 

follows: 

PART 33—TRANSPORTATION 

PRIORITIES AND ALLOCATION 

SYSTEM 

Subpart A—General 

Sec. 

33.1 Purpose of this part. 

33.2 Priorities and allocations authority. 

33.3 Program eligibility. 

Subpart B—Definitions 

33.20 Definitions. 

Subpart C—Placement of Rated Orders 

33.30 Delegation of authority. 

33.31 Priority ratings. 

33.32 Elements of a rated order. 

33.33 Acceptance and rejection of rated 

orders. 

33.34 Preferential scheduling. 

33.35 Extension of priority ratings. 

33.36 Changes or cancellations of priority 

ratings and rated orders. 

33.37 Use of rated orders. 

33.38 Limitations on placing rated orders. 

Subpart D—Special Priorities Assistance 

33.40 General provisions. 

33.41 Requests for priority rating authority. 

33.42 Examples of assistance. 

33.43 Criteria for assistance. 

33.44 Instances where assistance may not 

be provided. 

33.45 Assistance programs with other 

nations. [Reserved] 

Subpart E—Allocation Actions 

33.50 Policy. 

33.51 General procedures. 

33.52 Controlling the general distribution of 

a material in the civilian market. 

33.53 Types of allocation orders. 

33.54 Elements of an allocation order. 

33.55 Mandatory acceptance of an 

allocation order. 

33.56 Changes or cancellations of an 

allocation order. 

Subpart F—Official Actions 

33.60 General provisions. 

33.61 Rating Authorizations. 

33.62 Directives. 

33.63 Memoranda of Understanding. 

Subpart G—Compliance 

33.70 General provisions. 

33.71 Audits and investigations. 

33.72 Compulsory process. 

33.73 Notification of failure to comply. 

33.74 Violations, penalties, and remedies. 

33.75 Compliance conflicts. 

Subpart H—Adjustments, Exceptions, and 

Appeals 

33.80 Adjustments or exceptions. 

33.81 Appeals. 

Subpart I—Miscellaneous Provisions 

33.90 Protection against claims. 

33.91 Records and reports. 

33.92 Applicability of this part and official 

actions. 

33.93 Communications. 

Appendix I to Part 33—Sample Form OST F 

1254 

Schedule 1 to Part 33—Approved Programs 

Authority: Defense Production Act of 

1950, as amended, 50 U.S.C. 82; 50 U.S.C. 

App. §§ 2061–2171; 50 U.S.C. App § 468; 

Executive Order 12742, (56 FR 1079, January 

8, 1991); Executive Order 13603, (77 FR 

16651, March 16, 2012). 

Subpart A—General 

§ 33.1 Purpose of this part. 

This part provides guidance and 

procedures for use of the Defense 

Production Act priorities and 

allocations authority with respect to all 

forms of civil transportation. The 

guidance and procedures in this part are 

generally consistent with the guidance 

and procedures provided in other 

regulations issued under EO 13603 

authority. 

§ 33.2 Priorities and allocations authority. 

(a) Section 201 of Executive Order 

13603 (77 FR 16651, March 16, 2012) 

delegates the President’s authority 

under section 101 of the Defense 

Production Act to require acceptance 

and priority performance of contracts 

and orders (other than contracts of 

employment) to promote the national 

defense over performance of any other 

contracts or orders, and to allocate 

materials, services, and facilities as 

deemed necessary or appropriate to 

promote the national defense to: 

(1) The Secretary of Agriculture with 

respect to food resources, food resource 

facilities, livestock resources, veterinary 

resources, plant health resources, and 

the domestic distribution of farm 

equipment and commercial fertilizer; 

(2) The Secretary of Energy with 

respect to all forms of energy; 

(3) The Secretary of Health and 

Human Services with respect to health 

resources; 

(4) The Secretary of Transportation 

with respect to all forms of civil 

transportation; 

(5) The Secretary of Defense with 

respect to water resources; and 

(6) The Secretary of Commerce for all 

other materials, services, and facilities, 

including construction materials. 

(b) Section 202 of Executive Order 

13603 states that the priorities and 

allocations authority delegated in 

section 201 of the order may be used 

only to support programs that have been 

determined in writing as necessary or 

appropriate to promote the national 

defense: 

(1) By the Secretary of Defense with 

respect to military production and 

construction, military assistance to 

foreign nations, military use of civil 

transportation, stockpiles, managed by 

the Department of Defense, space, and 

directly related activities; 

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(2) By the Secretary of Energy with 

respect to energy production and 

construction, distribution and use, and 

directly related activities; and 

(3) By the Secretary of Homeland 

Security with respect to all other 

national defense programs, including 

civil defense and continuity of 

Government. 

§ 33.3 Program eligibility. 

Certain programs to promote the 

national defense are eligible for 

priorities and allocations support. These 

include programs for military and 

energy production or construction, 

military or critical infrastructure 

assistance to any foreign nation, 

homeland security, stockpiling, space, 

and any directly related activity. Other 

eligible programs include emergency 

preparedness activities conducted 

pursuant to title VI of the Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act (42 U.S.C. 5195 et seq.) 

and critical infrastructure protection 

and restoration. 

Subpart B—Definitions 

§ 33.20 Definitions. 

The following definitions pertain to 

all sections of this part: 

Allocation means the control of the 

distribution of materials, services, or 

facilities for a purpose deemed 

necessary or appropriate to promote the 

national defense. 

Allocation authority means the 

authority of the Department of 

Transportation, pursuant to section 101 

of the Defense Production Act, to 

allocate materials, services, and 

facilities for use in approved programs. 

Allocation order means an official 

action to control the distribution of 

materials, services, or facilities for a 

purpose deemed necessary or 

appropriate to promote the national 

defense. 

Allotment means an official action 

that specifies the maximum quantity of 

a material, service, or facility authorized 

for a specific use to promote the 

national defense. 

Approved program means a program 

determined by the Secretary of Defense, 

the Secretary of Energy, or the Secretary 

of Homeland Security to be necessary or 

appropriate to promote the national 

defense, in accordance with section 202 

of Executive Order 13603. 

Civil transportation includes 

movement of persons and property by 

all modes of transportation in interstate, 

intrastate, or foreign commerce within 

the United States, its territories and 

possessions, and the District of 

Columbia, and related public storage 

and warehousing, ports, services, 

equipment and facilities, such as 

transportation carrier shop and repair 

facilities. ‘‘Civil transportation’’ also 

shall include direction, control, and 

coordination of civil transportation 

capacity regardless of ownership. ‘‘Civil 

transportation’’ shall not include 

transportation owned or controlled by 

the Department of Defense, use of 

petroleum and gas pipelines, and coal 

slurry pipelines used only to supply 

energy production facilities directly. 

Construction means the erection, 

addition, extension, or alteration of any 

building, structure, or project, using 

materials or products which are to be an 

integral and permanent part of the 

building, structure, or project. 

Construction does not include 

maintenance and repair. 

Critical infrastructure means any 

systems and assets, whether physical or 

cyber-based, so vital to the United States 

that the degradation or destruction of 

such systems and assets would have a 

debilitating impact on national security, 

including, but not limited to, national 

economic security and national public 

health or safety. 

Defense Production Act means the 

Defense Production Act of 1950, as 

amended (50 U.S.C. App. § 2061 et seq.). 

Delegate Agency means a government 

agency authorized by delegation from 

the Department of Transportation to 

place priority ratings on contracts or 

orders needed to support approved 

programs. 

Directive means an official action that 

requires a person to take or refrain from 

taking certain actions in accordance 

with its provisions. 

Emergency preparedness means all 

those activities and measures designed 

or undertaken to prepare for or 

minimize the effects of a hazard upon 

the civilian population, to deal with the 

immediate emergency conditions which 

would be created by the hazard, and to 

effectuate emergency repairs to, or the 

emergency restoration of, vital utilities 

and facilities destroyed or damaged by 

the hazard. Such term includes the 

following: 

(1) Measures to be undertaken in 

preparation for anticipated hazards 

(including the establishment of 

appropriate organizations, operational 

plans, and supporting agreements, the 

recruitment and training of personnel, 

the conduct of research, the 

procurement and stockpiling of 

necessary materials and supplies, the 

provision of suitable warning systems, 

the construction or preparation of 

shelters, shelter areas, and control 

centers, and, when appropriate, the nonmilitary evacuation of the civilian 

population). 

(2) Measures to be undertaken during 

a hazard (including the enforcement of 

passive defense regulations prescribed 

by duly established military or civil 

authorities, the evacuation of personnel 

to shelter areas, the control of traffic and 

panic, and the control and use of 

lighting and civil communications). 

(3) Measures to be undertaken 

following a hazard (including activities 

for fire fighting, rescue, emergency 

medical, health and sanitation services, 

monitoring for specific dangers of 

special weapons, unexploded bomb 

reconnaissance, essential debris 

clearance, emergency welfare measures, 

and immediately essential emergency 

repair or restoration of damaged vital 

facilities). 

Energy means all forms of energy 

including petroleum, gas (both natural 

and manufactured), electricity, solid 

fuels (including all forms of coal, coke, 

coal chemicals, coal liquification, and 

coal gasification), solar, wind, other 

types of renewable energy, atomic 

energy, and the production, 

conservation, use, control, and 

distribution (including pipelines) of all 

of these forms of energy. 

Facilities includes all types of 

buildings, structures, or other 

improvements to real property (but 

excluding farms, churches or other 

places of worship, and private dwelling 

houses), and services relating to the use 

of any such building, structure, or other 

improvement. 

Farm equipment means equipment, 

machinery, and repair parts 

manufactured for use on farms in 

connection with the production or 

preparation for market use of food 

resources. 

Fertilizer means any product or 

combination of products that contain 

one or more of the elements nitrogen, 

phosphorus, and potassium for use as a 

plant nutrient. 

Food resources means all 

commodities and products, (simple, 

mixed, or compound), or complements 

to such commodities or products, that 

are capable of being ingested by either 

human beings or animals, irrespective of 

other uses to which such commodities 

or products may be put, at all stages of 

processing from the raw commodity to 

the products thereof in vendible form 

for human or animal consumption. 

‘‘Food resources’’ also means potable 

water packaged in commercially 

marketable containers, all starches, 

sugars, vegetable and animal or marine 

fats and oils, seed, cotton, hemp, and 

flax fiber, but does not mean any such 

material after it loses its identity as an 

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agricultural commodity or agricultural 

product. 

Food resource facilities means plants, 

machinery, vehicles (including on 

farm), and other facilities required for 

the production, processing, distribution, 

and storage (including cold storage) of 

food resources, and for the domestic 

distribution of farm equipment and 

fertilizer (excluding transportation 

thereof). 

Hazard means an emergency or 

disaster resulting from— 

(1) A natural disaster; or 

(2) An accidental or man-caused 

event. 

Health resources means drugs, 

biological products, medical devices, 

materials, facilities, health supplies, 

services and equipment required to 

diagnose, mitigate or prevent the 

impairment of, improve, treat, cure, or 

restore the physical or mental health 

conditions of the population. 

Homeland security includes efforts— 

(1) To prevent terrorist attacks within 

the United States; 

(2) To reduce the vulnerability of the 

United States to terrorism; 

(3) To minimize damage from a 

terrorist attack in the United States; and 

(4) To recover from a terrorist attack 

in the United States. 

Item means any raw, in process, or 

manufactured material, article, 

commodity, supply, equipment, 

component, accessory, part, assembly, 

or product of any kind, technical 

information, process, or service. 

Local government means a county, 

municipality, city, town, township, 

local public authority (including any 

public and Indian housing agency under 

the United States Housing Act of 1937) 

school district, special district, 

intrastate district, council of 

governments (whether or not 

incorporated as a nonprofit corporation 

under state law), any other regional or 

interstate government entity, or any 

agency or instrumentality of a local 

government. 

Maintenance and repair and 

operating supplies or MRO— 

(1) ‘‘Maintenance’’ is the upkeep 

necessary to continue any plant, facility, 

or equipment in working condition. 

(2) ‘‘Repair’’ is the restoration of any 

plant, facility, or equipment to working 

condition when it has been rendered 

unsafe or unfit for service by wear and 

tear, damage, or failure of parts. 

(3) ‘‘Operating supplies’’ are any 

resources carried as operating supplies 

according to a person’s established 

accounting practice. Operating supplies 

may include hand tools and expendable 

tools, jigs, dies, fixtures used on 

production equipment, lubricants, 

cleaners, chemicals and other 

expendable items. 

(4) MRO does not include items 

produced or obtained for sale to other 

persons or for installation upon or 

attachment to the property of another 

person, or items required for the 

production of such items; items needed 

for the replacement of any plant, 

facility, or equipment; or items for the 

improvement of any plant, facility, or 

equipment by replacing items which are 

still in working condition with items of 

a new or different kind, quality, or 

design. 

Materials includes— 

(1) Any raw materials (including 

minerals, metals, and advanced 

processed materials), commodities, 

articles, components (including critical 

components), products, and items of 

supply; and 

(2) Any technical information or 

services ancillary to the use of any such 

materials, commodities, articles, 

components, products, or items. 

National defense means programs for 

military and energy production or 

construction, military or critical 

infrastructure assistance to any foreign 

nation, homeland security, stockpiling, 

space, and any directly related activity. 

Such term includes emergency 

preparedness activities conducted 

pursuant to title VI of the Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act and critical 

infrastructure protection and 

restoration. 

Official action means an action taken 

by the Department of Transportation or 

another resource agency under the 

authority of the Defense Production Act, 

Executive Order 13603, and this part. 

Such actions include, but are not 

limited to, the issuance of Rating 

Authorizations, Directives, Set-Asides, 

Allotments, Planning Orders, 

Memoranda of Understanding, Demands 

for Information, Inspection 

Authorizations, and Administrative 

Subpoenas. 

Person includes an individual, 

corporation, partnership, association, or 

any other organized group of persons, or 

legal successor or representative thereof, 

or any State or local government or 

agency thereof. 

Planning order means notification of 

tentative arrangements to meet national 

defense requirements issued in priority 

order or allocation order format, for 

planning purposes only. 

Rated order means a prime contract, 

a subcontract, or a purchase order in 

support of an approved program issued 

in accordance with the provisions of 

this part. 

Resource agency means any agency 

delegated priorities and allocations 

authority as specified in § 33.2. 

Secretary means the Secretary of 

Transportation. 

Selective Service Act refers to Section 

18 of the Selective Service Act of 1948 

(50 U.S.C. App. § 468). 

Services includes any effort that is 

needed for or incidental to— 

(1) The development, production, 

processing, distribution, delivery, or use 

of an industrial resource or a critical 

technology item; 

(2) The construction of facilities; 

(3) The movement of individuals and 

property by all modes of civil 

transportation; or 

(4) Other national defense programs 

and activities. 

Set-aside means an official action that 

requires a person to reserve materials, 

services, or facilities capacity in 

anticipation of the receipt of rated 

orders. 

Stafford Act means title VI 

(Emergency Preparedness) of the Robert 

T. Stafford Disaster Relief and 

Emergency Assistance Act, as amended 

(42 U.S.C. 5195–5197g). 

State means any of the several States 

of the United States, the District of 

Columbia, the Commonwealth of Puerto 

Rico, any territory or possession of the 

United States, or any agency or 

instrumentality of a State exclusive of 

local governments. The term does not 

include any public and Indian housing 

agency under United States Housing Act 

of 1937. 

Water resources means all usable 

water, from all sources, within the 

jurisdiction of the United States, that 

can be managed, controlled, and 

allocated to meet emergency 

requirements, except ‘‘water resources’’ 

does not include usable water that 

qualifies as ‘‘food resources.’’ 

Subpart C—Placement of Rated Orders 

§ 33.30 Delegation of authority. 

The priorities and allocations 

authorities of the President under title I 

of the Defense Production Act with 

respect to all forms of civil 

transportation have been delegated to 

the Secretary of Transportation under 

section 201(a)(4) of Executive Order 

13603 of March 16, 2012 (77 FR 16651). 

§ 33.31 Priority ratings. 

(a) Levels of priority. (1) There are two 

levels of priority established by the 

Transportation Priorities and 

Allocations System regulations, 

identified by the rating symbols ‘‘DO’’ 

and ‘‘DX’’. 

(2) All DO-rated orders have equal 

priority with each other and take 

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precedence over unrated orders. All DXrated orders have equal priority with 

each other and take precedence over 

DO-rated orders and unrated orders. 

(For resolution of conflicts among rated 

orders of equal priority, see § 33.34(c).) 

(3) In addition, a Directive regarding 

priority treatment for a given item 

issued by the resource agency with 

priorities jurisdiction for that item takes 

precedence over any DX-rated order, 

DO-rated order, or unrated order, as 

stipulated in the Directive. (For a full 

discussion of Directives, see § 33.62.) 

(b) Program identification symbols. 

Program identification symbols indicate 

which approved program is being 

supported by a rated order. DOT will 

use the letter ‘‘T’’ followed by a number 

for all transportation-related approved 

programs. Programs may be approved 

under the procedures of Executive 

Order 13603 at any time. Program 

identification symbols, in themselves, 

do not connote any priority. 

(c) Priority ratings. A priority rating 

consists of the rating symbol—DO and 

DX—and the program identification 

symbol, such as DO–T1 or DX–T1 for a 

priority rating under TPAS. 

§ 33.32 Elements of a rated order. 

Each rated order must include: 

(a) The appropriate priority rating 

(e.g. DO–T1 or DX–T1); 

(b) A required delivery date or dates. 

The words ‘‘immediately’’ or ‘‘as soon 

as possible’’ do not constitute a delivery 

date. A ‘‘requirements contract,’’ ‘‘basic 

ordering agreement,’’ ‘‘prime vendor 

contract,’’ or similar procurement 

document bearing a priority rating may 

contain no specific delivery date or 

dates and may provide for the 

furnishing of items or service from timeto-time or within a stated period against 

specific purchase orders, such as 

‘‘calls,’’ ‘‘requisitions,’’ and ‘‘delivery 

orders.’’ These purchase orders must 

specify a required delivery date or dates 

and are to be considered as rated as of 

the date of their receipt by the supplier 

and not as of the date of the original 

procurement document; 

(c) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of an individual 

authorized to sign rated orders for the 

person placing the order. The signature 

or use of the name certifies that the 

rated order is authorized under this part 

and that the requirements of this part 

are being followed; and 

(d)(1) A statement that reads in 

substance: 

This is a rated order certified for 

national defense use, and you are 

required to follow all the provisions of 

the Transportation Priorities and 

Allocations System regulation at 49 CFR 

Part 33. 

(2) If the rated order is placed in 

support of emergency preparedness 

requirements and expedited action is 

necessary and appropriate to meet these 

requirements, the following sentences 

should be added following the 

statement set forth in paragraph (d)(1) 

above: 

This rated order is placed for the 

purpose of emergency preparedness. It 

must be accepted or rejected within 

[INSERT NUMBER OF HOURS 

REQUIRED IN § 33.33] hours from 

receipt of the order, in accordance with 

§ 33.33(e) of the Transportation 

Priorities and Allocations System 

regulation at 49 CFR Part 33. 

§ 33.33 Acceptance and rejection of rated 

orders. 

(a) Mandatory acceptance. (1) Except 

as otherwise specified in this section, a 

person shall accept every rated order 

received and must fill such orders 

regardless of any other rated or unrated 

orders that have been accepted. 

(2) A person shall not discriminate 

against rated orders in any manner such 

as by charging higher prices or by 

imposing different terms and conditions 

than for comparable unrated orders. 

(b) Mandatory rejection. Unless 

otherwise directed by the Department of 

Transportation for a rated order 

involving all forms of civil 

transportation: 

(1) A person shall not accept a rated 

order for delivery on a specific date if 

unable to fill the order by that date. 

However, the person must inform the 

customer of the earliest date on which 

delivery can be made and offer to accept 

the order on the basis of that date. 

Scheduling conflicts with previously 

accepted lower rated or unrated orders 

are not sufficient reason for rejection 

under this section. 

(2) A person shall not accept a DOrated order for delivery on a date which 

would interfere with delivery of any 

previously accepted DO- or DX-rated 

orders. However, the person must offer 

to accept the order based on the earliest 

delivery date otherwise possible. 

(3) A person shall not accept a DXrated order for delivery on a date which 

would interfere with delivery of any 

previously accepted DX-rated orders, 

but must offer to accept the order based 

on the earliest delivery date otherwise 

possible. 

(4) If a person is unable to fill all of 

the rated orders of equal priority status 

received on the same day, the person 

must accept, based upon the earliest 

delivery dates, only those orders which 

can be filled, and reject the other orders. 

For example, a person must accept order 

A requiring delivery on December 15 

before accepting order B requiring 

delivery on December 31. However, the 

person must offer to accept the rejected 

orders based on the earliest delivery 

dates otherwise possible. 

(5) A person shall not accept a rated 

order if the person is prohibited by 

Federal law from meeting the terms of 

the order. 

(c) Optional rejection. Unless 

otherwise directed by the Department of 

Transportation for a rated order 

involving all forms of civil 

transportation, rated orders may be 

rejected in any of the following cases as 

long as a supplier does not discriminate 

among customers: 

(1) If the person placing the order is 

unwilling or unable to meet regularly 

established terms of sale or payment; 

(2) If the order is for an item not 

supplied or for a service not capable of 

being performed; 

(3) If the order is for an item or service 

produced, acquired, or provided only 

for the supplier’s own use for which no 

orders have been filled for two years 

prior to the date of receipt of the rated 

order. If, however, a supplier has sold 

some of these items or provided similar 

services, the supplier is obligated to 

accept rated orders up to that quantity 

or portion of production or service, 

whichever is greater, sold or provided 

within the past two years; 

(4) If the person placing the rated 

order, other than the U.S. Government, 

makes the item or performs the service 

being ordered; 

(5) If acceptance of a rated order or 

performance against a rated order would 

violate any other regulation, official 

action, or order of the Department of 

Transportation, issued under the 

authority of the Defense Production Act 

or another relevant statute. 

(d) Customer notification 

requirements. (1) Except as provided in 

paragraph (e) of this section, a person 

must accept or reject a rated order in 

writing or electronically within fifteen 

(15) working days after receipt of a DO 

rated order and within ten (10) working 

days after receipt of a DX rated order. If 

the order is rejected, the person must 

give reasons in writing or electronically 

for the rejection. 

(2) If a person has accepted a rated 

order and subsequently finds that 

shipment or performance will be 

delayed, the person must notify the 

customer immediately, give the reasons 

for the delay, and advise of a new 

shipment or performance date. If 

notification is given verbally, written or 

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electronic confirmation must be 

provided within five (5) working days. 

(e) Exception for emergency 

preparedness conditions. If a rated order 

is placed for the purpose of emergency 

preparedness and includes the 

additional statement set forth in 

§ 33.32(d)(2), a person must accept or 

reject the rated order and transmit the 

acceptance or rejection in writing or in 

an electronic format: 

(1) Within six (6) hours after receipt 

of the order if the order is issued in 

response to a hazard that has occurred; 

or 

(2) Within the greater of twelve (12) 

hours from receipt of the order or the 

time specified in the order, if the order 

is issued to prepare for an imminent 

hazard. 

§ 33.34 Preferential scheduling. 

(a) A person must schedule 

operations, including the acquisition of 

all needed production items or services, 

in a timely manner to satisfy the 

delivery requirements of each rated 

order. Modifying production or delivery 

schedules is necessary only when 

required delivery dates for rated orders 

cannot otherwise be met. 

(b) DO-rated orders must be given 

production or performance preference 

over unrated orders, if necessary to meet 

required delivery dates, even if this 

requires the diversion of items being 

processed or ready for delivery or 

services being performed against 

unrated orders. Similarly, DX-rated 

orders must be given preference over 

DO-rated orders and unrated orders. 

(Examples: If a person receives a DOrated order with a delivery date of June 

3 and if meeting that date would mean 

delaying production or delivery of an 

item for an unrated order, the unrated 

order must be delayed. If a DX-rated 

order is received calling for delivery on 

July 15 and a person has a DO-rated 

order requiring delivery on June 2 and 

operations can be scheduled to meet 

both deliveries, there is no need to alter 

production schedules to give any 

additional preference to the DX-rated 

order.) 

(c) Conflicting rated orders. (1) If a 

person finds that delivery or 

performance against any accepted rated 

orders conflicts with the delivery or 

performance against other accepted 

rated orders of equal priority status, the 

person shall give precedence to the 

conflicting orders in the sequence in 

which they are to be delivered or 

performed (not to the receipt dates). If 

the conflicting orders are scheduled to 

be delivered or performed on the same 

day, the person shall give precedence to 

those orders that have the earliest 

receipt dates. 

(2) If a person is unable to resolve 

rated order delivery or performance 

conflicts under this section, the person 

should promptly seek special priorities 

assistance as provided in §§ 33.40 

through 33.44. If the person’s customer 

objects to the rescheduling of delivery 

or performance of a rated order, the 

customer should promptly seek special 

priorities assistance as provided in 

§§ 33.40 through 33.44. For any rated 

order against which delivery or 

performance will be delayed, the person 

must notify the customer as provided in 

§ 33.33. 

(d) If a person is unable to purchase 

needed production items in time to fill 

a rated order by its required delivery 

date, the person must fill the rated order 

by using inventoried production items. 

A person who uses inventoried items to 

fill a rated order may replace those 

items with the use of a rated order as 

provided in § 33.37(b). 

§ 33.35 Extension of priority ratings. 

(a) A person must use rated orders 

with suppliers to obtain items or 

services needed to fill a rated order. The 

person must use the priority rating 

indicated on the customer’s rated order, 

except as otherwise provided in this 

part or as directed by the Department of 

Transportation. For example, if a person 

is in receipt of a DO–T1 priority rating 

for a bus and has several buses in 

inventory that are in need of repair, that 

person must use a DO–T1 rated order to 

obtain the needed bus repairs. 

(b) The priority rating must be 

included on each successive order 

placed to obtain items or services 

needed to fill a customer’s rated order. 

This continues from contractor to 

subcontractor to supplier throughout the 

entire procurement chain. 

§ 33.36 Changes or cancellations of 

priority ratings and rated orders. 

(a) The priority rating on a rated order 

may be changed or canceled by: 

(1) An official action of the 

Department of Transportation; or 

(2) Written notification from the 

person who placed the rated order. 

(b) If an unrated order is amended so 

as to make it a rated order, or a DO 

rating is changed to a DX rating, the 

supplier must give the appropriate 

preferential treatment to the order as of 

the date the change is received by the 

supplier. 

(c) An amendment to a rated order 

that significantly alters a supplier’s 

original production or delivery schedule 

shall constitute a new rated order as of 

the date of its receipt. The supplier must 

accept or reject the amended order 

according to the provisions of § 33.33. 

(d) The following amendments do not 

constitute a new rated order: a change 

in shipping destination; a reduction in 

the total amount of the order; an 

increase in the total amount of the order 

which has negligible impact upon 

deliveries; a minor variation in size or 

design; or a change which is agreed 

upon between the supplier and the 

customer. 

(e) If a person no longer needs items 

or services to fill a rated order, any rated 

orders placed with suppliers for the 

items or services, or the priority rating 

on those orders, must be canceled. 

(f) When a priority rating is added to 

an unrated order, or is changed or 

canceled, all suppliers must be 

promptly notified in writing. 

§ 33.37 Use of rated orders. 

(a) A person must use rated orders to 

obtain: 

(1) Items which will be physically 

incorporated into other items to fill 

rated orders, including that portion of 

such items normally consumed or 

converted into scrap or by-products in 

the course of processing; 

(2) Containers or other packaging 

materials required to make delivery of 

the finished items against rated orders; 

(3) Services, other than contracts of 

employment, needed to fill rated orders; 

and 

(4) MRO needed to produce the 

finished items to fill rated orders. 

(b) A person may use a rated order to 

replace inventoried items (including 

finished items) if such items were used 

to fill rated orders, as follows: 

(1) The order must be placed within 

90 days of the date of use of the 

inventory. 

(2) A DO rating and the program 

identification symbol indicated on the 

customer’s rated order must be used on 

the order. A DX rating may not be used 

even if the inventory was used to fill a 

DX-rated order. 

(3) If the priority ratings on rated 

orders from one customer or several 

customers contain different program 

identification symbols, the rated orders 

may be combined. In this case, the 

program identification symbol ‘‘T9’’ 

must be used (i.e., DO–T9). 

(c) A person may combine DX- and 

DO-rated orders from one customer or 

several customers if the items or 

services covered by each level of 

priority are identified separately and 

clearly. If different program 

identification symbols are indicated on 

those rated orders of equal priority, the 

person must use the program 

identification symbol ‘‘T9’’ (i.e., DO–T9 

or DX–T9). 

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(d) Combining rated and unrated 

orders. 

(1) A person may combine rated and 

unrated order quantities on one 

purchase order provided that: 

(i) The rated quantities are separately 

and clearly identified; and 

(ii) The four elements of a rated order, 

as required by § 33.32, are included on 

the order with the statement required in 

§ 33.32(d) modified to read in substance: 

This purchase order contains rated 

order quantities certified for national 

defense use, and you are required to 

follow all the provisions of the 

Transportation Priorities and 

Allocations System regulations at 49 

CFR Part 33 only as it pertains to the 

rated quantities. 

(2) A supplier must accept or reject 

the rated portion of the purchase order 

as provided in § 33.33 and give 

preferential treatment only to the rated 

quantities as required by this part. This 

part may not be used to require 

preferential treatment for the unrated 

portion of the order. 

(3) Any supplier who believes that 

rated and unrated orders are being 

combined in a manner contrary to the 

intent of this part or in a fashion that 

causes undue or exceptional hardship 

may submit a request for adjustment or 

exception under § 33.80. 

(e) A person may place a rated order 

for the minimum commercially 

procurable quantity even if the quantity 

needed to fill a rated order is less than 

that minimum. However, a person must 

combine rated orders as provided in 

paragraph (c) of this section, if possible, 

to obtain minimum procurable 

quantities. 

(f) A person is not required to place 

a priority rating on an order for less than 

$75,000, or one-half of the Simplified 

Acquisition Threshold (as established in 

the Federal Acquisition Regulations 

(FAR) (see FAR section 2.101) or in 

other authorized acquisition regulatory 

or management systems), whichever 

amount is greater, provided that 

delivery can be obtained in a timely 

fashion without the use of the priority 

rating. 

§ 33.38 Limitations on placing rated 

orders. 

(a) General limitations. (1) A person 

may not place a DO- or DX-rated order 

unless entitled to do so under this part. 

(2) Rated orders may not be used to 

obtain: 

(i) Delivery or performance on a date 

earlier than needed; 

(ii) A greater quantity of the item or 

services than needed, except to obtain a 

minimum procurable quantity. Separate 

rated orders may not be placed solely 

for the purpose of obtaining minimum 

procurable quantities on each order; 

(iii) Items or services in advance of 

the receipt of a rated order, except as 

specifically authorized by the 

Department of Transportation (see 

§ 33.41(c) for information on obtaining 

authorization for a priority rating in 

advance of a rated order); 

(iv) Items that are not needed to fill 

a rated order, except as specifically 

authorized by the Department of 

Transportation, or as otherwise 

permitted by this part; 

(v) Any of the following items unless 

specific priority rating authority has 

been obtained from the Department of 

Transportation, a Delegate Agency, or 

the Department of Commerce, as 

appropriate: 

(A) Items for plant improvement, 

expansion, or construction, unless they 

will be physically incorporated into a 

construction project covered by a rated 

order; and 

(B) Production or construction 

equipment or items to be used for the 

manufacture of production equipment 

(For information on requesting priority 

rating authority, see § 33.41); or 

(vi) Any items related to the 

development of chemical or biological 

warfare capabilities or the production of 

chemical or biological weapons, unless 

such development or production has 

been authorized by the President or the 

Secretary of Defense. 

(b) Jurisdictional limitations. (1) 

Unless authorized by the resource 

agency with jurisdiction, the provisions 

of this part are not applicable to the 

following resources: 

(i) Food resources, food resource 

facilities, livestock resources, veterinary 

resources, plant health resources, and 

the domestic distribution of farm 

equipment and commercial fertilizer 

(Resource agency with jurisdiction— 

Department of Agriculture); 

(ii) All forms of energy (Resource 

agency with jurisdiction—Department 

of Energy); 

(iii) Health resources (Resource 

agency with jurisdiction—Department 

of Health and Human Services); 

(iv) Water resources (Resource agency 

with jurisdiction—Department of 

Defense/U.S. Army Corps of Engineers); 

and 

(v) All materials, services, and 

facilities, including construction 

materials the authority for which has 

not been delegated to other agencies 

under Executive Order 13603. (Resource 

Agency with jurisdiction—Department 

of Commerce); 

(vi) Communications services 

(Resource agency with jurisdiction— 

National Communications System under 

Executive Order 12472 of April 3, 1984). 

(2) [Reserved] 

Subpart D—Special Priorities 

Assistance 

§ 33.40 General provisions. 

(a) TPAS is designed to be largely selfexecuting. However, from time-to-time 

production or delivery problems will 

arise. In this event, a person should 

immediately contact DOT’s Defense 

Production Act Activities Coordinator, 

Office of Intelligence, Security, and 

Emergency Response, 1200 New Jersey 

Avenue SE., Washington, DC 20590, for 

guidance or assistance. If the problem(s) 

cannot otherwise be resolved, special 

priorities assistance should be sought 

from the Department of Transportation 

through the Director, Office of 

Intelligence, Security, and Emergency 

Response, 1200 New Jersey Avenue SE., 

Washington, DC 20590. If the 

Department of Transportation is unable 

to resolve the problem or to authorize 

the use of a priority rating and believes 

additional assistance is warranted, the 

Department of Transportation may 

forward the request to another resource 

agency, as appropriate, for action. 

Special priorities assistance is a service 

provided to alleviate problems that do 

arise. 

(b) Special priorities assistance is 

available for any reason consistent with 

this part. Generally, special priorities 

assistance is provided to expedite 

deliveries, resolve delivery conflicts, 

place rated orders, locate suppliers, or 

to verify information supplied by 

customers and vendors. Special 

priorities assistance may also be used to 

request rating authority for items that 

are not normally eligible for priority 

treatment. 

(c) A request for special priorities 

assistance or priority rating authority 

must be submitted on Form OST F 1254 

(OMB control number to be inserted in 

the subsequent final rule) to the Defense 

Production Act Activities Coordinator, 

Office of Intelligence, Security, and 

Emergency Response, 1200 New Jersey 

Avenue SE., Washington, DC 20590. 

Form OST F 1254 may be obtained from 

the Department of Transportation or a 

Delegate Agency. A sample Form OST F 

1254 is attached at Appendix I to this 

part. 

§ 33.41 Requests for priority rating 

authority. 

(a) If a rated order is likely to be 

delayed because a person is unable to 

obtain items or services not normally 

rated under this part, the person may 

request the authority to use a priority 

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rating in ordering the needed items or 

services. 

(b) Rating authority for production or 

construction equipment. (1) A request 

for priority rating authority for 

production or construction equipment 

must be submitted to the U.S. 

Department of Commerce on FORM 

BIS–999. (See 15 CFR 700.51). 

(2) When the use of a priority rating 

is authorized for the procurement of 

production or construction equipment, a 

rated order may be used either to 

purchase or to lease such equipment. 

However, in the latter case, the 

equipment may be leased only from a 

person engaged in the business of 

leasing such equipment or from a 

person willing to lease rather than sell. 

(c) Rating authority in advance of a 

rated prime contract. (1) In certain cases 

and upon specific request, the 

Department of Transportation, in order 

to promote the national defense, may 

authorize a person to place a priority 

rating on an order to a supplier in 

advance of the issuance of a rated prime 

contract. In these instances, the person 

requesting advance rating authority 

must obtain sponsorship of the request 

from the Department of Transportation 

or the appropriate Delegate Agency. The 

person shall also assume any business 

risk associated with the placing of rated 

orders if these orders have to be 

cancelled in the event the rated prime 

contract is not issued. 

(2) The person must state the 

following in the request: 

It is understood that the authorization 

of a priority rating in advance of our 

receiving a rated prime contract from 

the Department of Transportation and 

our use of that priority rating with our 

suppliers in no way commits the 

Department of Transportation or any 

other government agency to enter into a 

contract or order or to expend funds. 

Further, we understand that the Federal 

Government shall not be liable for any 

cancellation charges, termination costs, 

or other damages that may accrue if a 

rated prime contract is not eventually 

placed and, as a result, we must 

subsequently cancel orders placed with 

the use of the priority rating authorized 

as a result of this request. 

(3) In reviewing requests for rating 

authority in advance of a rated prime 

contract, the Department of 

Transportation will consider, among 

other things, the following criteria: 

(i) The probability that the prime 

contract will be awarded; 

(ii) The impact of the resulting rated 

orders on suppliers and on other 

authorized programs; 

(iii) Whether the contractor is the sole 

source; 

(iv) Whether the item being produced 

has a long lead time; and 

(v) The time period for which the 

rating is being requested. 

(4) The Department of Transportation 

may require periodic reports on the use 

of the rating authority granted under 

paragraph (c) of this section. 

(5) If a rated prime contract is not 

issued, the person shall promptly notify 

all suppliers who have received rated 

orders pursuant to the advanced rating 

authority that the priority rating on 

those orders is cancelled. 

§ 33.42 Examples of assistance. 

(a) While special priorities assistance 

may be provided for any reason in 

support of this part, it is usually 

provided in situations where: 

(1) A person is experiencing difficulty 

in obtaining delivery against a rated 

order by the required delivery date; or 

(2) A person cannot locate a supplier 

for an item or service needed to fill a 

rated order. 

(b) Other examples of special 

priorities assistance include: 

(1) Ensuring that rated orders receive 

preferential treatment by suppliers; 

(2) Resolving production or delivery 

conflicts between various rated orders; 

(3) Assisting in placing rated orders 

with suppliers; 

(4) Verifying the urgency of rated 

orders; and 

(5) Determining the validity of rated 

orders. 

§ 33.43 Criteria for assistance. 

Requests for special priorities 

assistance should be timely, e.g., the 

request has been submitted promptly 

and enough time exists for the 

Department of Transportation or the 

Delegate Agency to effect a meaningful 

resolution to the problem, and must 

establish that: 

(a) There is an urgent need for the 

item; and 

(b) The applicant has made a 

reasonable effort to resolve the problem. 

§ 33.44 Instances where assistance may 

not be provided. 

Special priorities assistance is 

provided at the discretion of the 

Department of Transportation or the 

Delegate Agencies, when it is 

determined that such assistance is 

warranted to meet the objectives of this 

part. Examples where assistance may 

not be provided include situations when 

a person is attempting to: 

(a) Secure a price advantage; 

(b) Obtain delivery prior to the time 

required to fill a rated order; 

(c) Gain competitive advantage; 

(d) Disrupt an industry apportionment 

program in a manner designed to 

provide a person with an unwarranted 

share of scarce items; or 

(e) Overcome a supplier’s regularly 

established terms of sale or conditions 

of doing business. 

§ 33.45 Assistance programs with other 

nations. [Reserved] 

Subpart E—Allocation Actions 

§ 33.50 Policy. 

(a) It is the policy of the Federal 

Government that the allocations 

authority under title I of the Defense 

Production Act may: 

(1) Only be used when there is 

insufficient supply of a material, 

service, or facility to satisfy national 

defense supply requirements through 

the use of the priorities authority or 

when the use of the priorities authority 

would cause a severe and prolonged 

disruption in the supply of materials, 

services, or facilities available to 

support normal U.S. economic 

activities; and 

(2) Not be used to ration materials or 

services at the retail level. 

(b) Allocation orders, when used, will 

be distributed equitably among the 

suppliers of the materials, services, or 

facilities being allocated and not require 

any person to relinquish a 

disproportionate share of the civilian 

market. 

§ 33.51 General procedures. 

When the Department of 

Transportation plans to execute its 

allocations authority to address a supply 

problem within its resource jurisdiction, 

the Department shall develop a plan 

that includes the following information: 

(a) A copy of the written 

determination made in accordance with 

section 202 of Executive Order 13603, 

that the program or programs that would 

be supported by the allocation action 

are necessary or appropriate to promote 

the national defense; 

(b) A detailed description of the 

situation to include any unusual events 

or circumstances that have created the 

requirement for an allocation action; 

(c) A statement of the specific 

objective(s) of the allocation action; 

(d) A list of the materials, services, or 

facilities to be allocated; 

(e) A list of the sources of the 

materials, services, or facilities that will 

be subject to the allocation action; 

(f) A detailed description of the 

provisions that will be included in the 

allocation orders, including the type(s) 

of allocation orders, the percentages or 

quantity of capacity or output to be 

allocated for each purpose, and the 

duration of the allocation action (e.g., 

anticipated start and end dates); 

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(g) An evaluation of the impact of the 

proposed allocation action on the 

civilian market; and 

(h) Proposed actions, if any, to 

mitigate disruptions to civilian market 

operations. 

§ 33.52 Controlling the general distribution 

of a material in the civilian market. 

No allocation action by the 

Department of Transportation may be 

used to control the general distribution 

of a material in the civilian market, 

unless the Secretary of the Department 

of Transportation has: 

(a) Made a written finding that: 

(1) Such material is a scarce and 

critical material essential to the national 

defense, and 

(2) The requirements of the national 

defense for such material cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material in the 

civilian market to such a degree as to 

create appreciable hardship; 

(b) Submitted the finding for the 

President’s approval through the 

Assistant to the President and National 

Security Advisor and the Assistant to 

the President for Homeland Security 

and Counterterrorism; and 

(c) The President has approved the 

finding. 

§ 33.53 Types of allocation orders. 

There are three types of allocation 

orders available for communicating 

allocation actions. These are: 

(a) Set-aside: An official action that 

requires a person to reserve materials, 

services, or facilities capacity in 

anticipation of the receipt of rated 

orders; 

(b) Directive: An official action that 

requires a person to take or refrain from 

taking certain actions in accordance 

with its provisions. For example, a 

directive can require a person to: stop or 

reduce production of an item; prohibit 

the use of selected materials, services, or 

facilities; or divert the use of materials, 

services, or facilities from one purpose 

to another; and 

(c) Allotment: An official action that 

specifies the maximum quantity of a 

material, service, or facility authorized 

for a specific use. 

§ 33.54 Elements of an allocation order. 

Each allocation order must include: 

(a) A detailed description of the 

required allocation action(s); 

(b) Specific start and end calendar 

dates for each required allocation 

action; 

(c) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of the Secretary. The 

signature or use of the name certifies 

that the order is authorized under this 

part and that the requirements of this 

part are being followed; 

(d) A statement that reads in 

substance: ‘‘This is an allocation order 

certified for national defense use. [Insert 

the legal name of the person receiving 

the order] is required to comply with 

this order, in accordance with the 

provisions of the Transportation 

Priorities and Allocations System 

regulation (49 CFR Part 33)’’; and 

(e) A current copy of the 

Transportation Priorities and 

Allocations System regulation (49 CFR 

Part 33) as of the date of the allocation 

order. 

§ 33.55 Mandatory acceptance of an 

allocation order. 

(a) Except as otherwise specified in 

this section, a person shall accept and 

comply with every allocation order 

received. 

(b) A person shall not discriminate 

against an allocation order in any 

manner such as by charging higher 

prices for materials, services, or 

facilities covered by the order or by 

imposing terms and conditions for 

contracts and orders involving allocated 

materials, services, or facilities that 

differ from the person’s terms and 

conditions for contracts and orders for 

the materials, services, or facilities prior 

to receiving the allocation order. 

(c) If a person is unable to comply 

fully with the required action(s) 

specified in an allocation order, the 

person must notify the Department of 

Transportation immediately, explain the 

extent to which compliance is possible, 

and give the reasons why full 

compliance is not possible. If 

notification is given verbally, written or 

electronic confirmation must be 

provided within five (5) working days. 

Such notification does not release the 

person from complying with the order 

to the fullest extent possible, until the 

person is notified by the Department of 

Transportation that the order has been 

changed or cancelled. 

§ 33.56 Changes or cancellations of an 

allocation order. 

An allocation order may be changed 

or canceled by an official action of the 

Department of Transportation. 

Subpart F—Official Actions 

§ 33.60 General provisions. 

(a) The Department of Transportation 

may take specific official actions to 

implement the provisions of this part. 

(b) These official actions include, but 

are not limited to, Rating 

Authorizations, Directives, Planning 

Orders, and Memoranda of 

Understanding. 

§ 33.61 Rating authorizations. 

(a) A Rating Authorization is an 

official action granting specific priority 

rating authority that: 

(1) Permits a person to place a priority 

rating on an order for an item or service 

not normally ratable under this part; or 

(2) Authorizes a person to modify a 

priority rating on a specific order or 

series of contracts or orders. 

(b) To request priority rating 

authority, see § 33.41. 

§ 33.62 Directives. 

(a) A Directive is an official action 

that requires a person to take or refrain 

from taking certain actions in 

accordance with its provisions. 

(b) A person must comply with each 

Directive issued. However, a person 

may not use or extend a Directive to 

obtain any items from a supplier, unless 

expressly authorized to do so in the 

Directive. 

(c) A Priorities Directive takes 

precedence over all DX-rated orders, 

DO-rated orders, and unrated orders 

previously or subsequently received, 

unless a contrary instruction appears in 

the Directive. 

(d) An Allocations Directive takes 

precedence over all Priorities Directives, 

DX-rated orders, DO-rated orders, and 

unrated orders previously or 

subsequently received, unless a contrary 

instruction appears in the Directive. 

§ 33.63 Memoranda of Understanding. 

(a) A Memorandum of Understanding 

is an official action that may be issued 

in resolving special priorities assistance 

cases to reflect an agreement reached by 

all parties (the Department of 

Transportation, the Department of 

Commerce (if applicable), a Delegate 

Agency (if applicable), the supplier, and 

the customer). 

(b) A Memorandum of Understanding 

is not used to alter scheduling between 

rated orders, authorize the use of 

priority ratings, impose restrictions 

under this part, or take other official 

actions. Rather, Memoranda of 

Understanding are used to confirm 

production or shipping schedules that 

do not require modifications to other 

rated orders. 

Subpart G—Compliance 

§ 33.70 General provisions. 

(a) The Department of Transportation 

may take specific official actions for any 

reason necessary or appropriate to the 

enforcement or the administration of the 

Defense Production Act and other 

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applicable statutes or this part. Such 

actions include Administrative 

Subpoenas, Demands for Information, 

and Inspection Authorizations. 

(b) Any person who places or receives 

a rated order or an allocation order must 

comply with the provisions of this part. 

(c) Willful violation of the provisions 

of title I or Section 705 of the Defense 

Production Act and other applicable 

statutes, this part, or an official action 

of the Department of Transportation, is 

a criminal act, punishable as provided 

in the Defense Production Act and other 

applicable statutes, and as set forth in 

section 33.74 of this part. 

§ 33.71 Audits and investigations. 

(a) Audits and investigations are 

official actions involving the 

examination of books, records, 

documents, other writings and 

information to ensure that the 

provisions of the Defense Production 

Act and other applicable statutes, this 

part, and official actions have been 

properly followed. An audit or 

investigation may also include 

interviews and a systems evaluation to 

detect problems or failures in the 

implementation of this part. 

(b) When undertaking an audit, 

investigation, or other inquiry, the 

Department of Transportation shall: 

(1) Define the scope and purpose in 

the official action given to the person 

under investigation; and 

(2) Have ascertained that the 

information sought or other adequate 

and authoritative data are not available 

from any Federal or other responsible 

agency. 

(c) In administering this part, the 

Department of Transportation may issue 

the following documents that constitute 

official actions: 

(1) Administrative Subpoenas. An 

Administrative Subpoena requires a 

person to appear as a witness before an 

official designated by the Department of 

Transportation to testify under oath on 

matters of which that person has 

knowledge relating to the enforcement 

or the administration of the Defense 

Production Act and other applicable 

statutes, this part, or official actions. An 

Administrative Subpoena may also 

require the production of books, papers, 

records, documents and physical objects 

or property. 

(2) Demands for Information. A 

Demand for Information requires a 

person to furnish to a duly authorized 

representative of the Department of 

Transportation any information 

necessary or appropriate to the 

enforcement or the administration of the 

Defense Production Act and other 

applicable statutes, this part, or official 

actions. 

(3) Inspection Authorizations. An 

Inspection Authorization requires a 

person to permit a duly authorized 

representative of the Department of 

Transportation to interview the person’s 

employees or agents, to inspect books, 

records, documents, other writings, and 

information, including electronicallystored information, in the person’s 

possession or control at the place where 

that person usually keeps them or 

otherwise, and to inspect a person’s 

property when such interviews and 

inspections are necessary or appropriate 

to the enforcement or the administration 

of the Defense Production Act and 

related statutes, this part, or official 

actions. 

(d) The production of books, records, 

documents, other writings, and 

information will not be required at any 

place other than where they are usually 

kept if, prior to the return date specified 

in the Administrative Subpoena or 

Demand for Information, a duly 

authorized official of the Department of 

Transportation is furnished with copies 

of such material that are certified under 

oath to be true copies. As an alternative, 

a person may enter into a stipulation 

with a duly authorized official of the 

Department of Transportation as to the 

content of the material. 

(e) An Administrative Subpoena, 

Demand for Information, or Inspection 

Authorization, shall include the name, 

title, or official position of the person 

issuing the document and of the person 

to be served, the evidence sought to be 

adduced, and its general relevance to 

the scope and purpose of the audit, 

investigation, or other inquiry. If 

employees or agents are to be 

interviewed; if books, records, 

documents, other writings, or 

information are to be produced; or if 

property is to be inspected; the 

Administrative Subpoena, Demand for 

Information, or Inspection 

Authorization will describe them with 

particularity. 

(f) Service of documents shall be 

made in the following manner: 

(1) Service of a Demand for 

Information or Inspection Authorization 

shall be made personally, or by Certified 

Mail-Return Receipt Requested at the 

person’s last known address. Service of 

an Administrative Subpoena shall be 

made personally. Personal service may 

also be made by leaving a copy of the 

document with someone at least 18 

years old at the person’s last known 

dwelling or place of business. 

(2) Service upon other than an 

individual may be made by serving a 

partner, corporate officer, or a managing 

or general agent authorized by 

appointment or by law to accept service 

of process. If an agent is served, a copy 

of the document shall be mailed to the 

person named in the document. 

(3) Any individual 18 years of age or 

over may serve an Administrative 

Subpoena, Demand for Information, or 

Inspection Authorization. When 

personal service is made, the individual 

making the service shall prepare an 

affidavit as to the manner in which 

service was made and the identity of the 

person served, and return the affidavit, 

and in the case of subpoenas, the 

original document, to the issuing officer. 

In case of failure to make service, the 

reasons for the failure shall be stated on 

the original document. 

(g) This section is neither intended to 

limit the authority of the Inspector 

General of the Department of 

Transportation to initiate and conduct 

audits and investigations nor confer 

additional authority beyond that 

provided by the Inspector General Act. 

§ 33.72 Compulsory process. 

(a) If a person refuses to permit a duly 

authorized representative of the 

Department of Transportation to have 

access to any premises or source of 

information necessary to the 

administration or the enforcement of the 

Defense Production Act and other 

applicable statutes, or this part, the 

Department of Transportation 

representative may seek compulsory 

process. Compulsory process means the 

institution of appropriate legal action, 

including ex parte application for an 

inspection warrant or its equivalent, in 

any forum of appropriate jurisdiction. 

(b) Compulsory process may be 

sought in advance of an audit, 

investigation, or other inquiry, if, in the 

judgment of the Department of 

Transportation there is reason to believe 

that a person will refuse to permit an 

audit, investigation, or other inquiry, or 

that other circumstances exist which 

make such process desirable or 

necessary. 

§ 33.73 Notification of failure to comply. 

(a) At the conclusion of an audit, 

investigation, or other inquiry, or at any 

other time, the Department of 

Transportation may inform the person 

in writing where compliance with the 

requirements of the Defense Production 

Act and other applicable statutes, this 

part, or an official action were not met. 

(b) In cases where the Department of 

Transportation determines that failure 

to comply with the provisions of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action was inadvertent, the 

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person may be informed in writing of 

the particulars involved and the 

corrective action to be taken. Failure to 

take corrective action may then be 

construed as a willful violation of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action. 

§ 33.74 Violations, penalties, and 

remedies. 

(a) Willful violation of the provisions 

of title 1 or section 705 or 707 of the 

Defense Production Act, the priorities 

provisions of the Selective Service Act, 

this part, or an official action, is a crime 

and upon conviction, a person may be 

punished by fine or imprisonment, or 

both. The maximum penalty currently 

provided by the Defense Production Act 

is a $10,000 fine, or one year in prison, 

or both. The maximum penalty 

currently provided by the Selective 

Service Act is a $50,000 fine, or three 

years in prison, or both. 

(b) The Government may also seek an 

injunction from a court of appropriate 

jurisdiction to prohibit the continuance 

of any violation of, or to enforce 

compliance with, the Defense 

Production Act, this part, or an official 

action. 

(c) In order to secure the effective 

enforcement of the Defense Production 

Act and other applicable statutes, this 

part, and official actions, the following 

are prohibited: 

(1) No person may solicit, influence or 

permit another person to perform any 

act prohibited by, or to omit any act 

required by, the Defense Production Act 

and other applicable statutes, this part, 

or an official action. 

(2) No person may conspire or act in 

concert with any other person to 

perform any act prohibited by, or to 

omit any act required by, the Defense 

Production Act and other applicable 

statutes, this part, or an official action. 

(3) No person shall deliver any item 

or perform any service if the person 

knows or has reason to believe that the 

item will be accepted, redelivered, held, 

or used in violation of the Defense 

Production Act and other applicable 

statutes, this part, or an official action. 

In such instances, the person must 

immediately notify the Department of 

Transportation that, in accordance with 

this provision, delivery of the item or 

performance of the service has not been 

made. 

§ 33.75 Compliance conflicts. 

If compliance with any provision of 

the Defense Production Act and other 

applicable statutes, this part, or an 

official action would prevent a person 

from filling a rated order or from 

complying with another provision of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action, the person must 

immediately notify the Department of 

Transportation for resolution of the 

conflict. 

Subpart H—Adjustments, Exceptions, 

and Appeals 

§ 33.80 Adjustments or exceptions. 

(a) A person may submit a request to 

the Defense Production Act Activities 

Coordinator, Office of Intelligence 

Security, and Emergency Response, 

1200 New Jersey Avenue SE., 

Washington, DC 20590, for an 

adjustment or exception on the ground 

that: 

(1) A provision of this part or an 

official action results in an undue or 

exceptional hardship on that person not 

suffered generally by others in similar 

situations and circumstances; or 

(2) The consequences of following a 

provision of this part or an official 

action are contrary to the intent of the 

Defense Production Act and other 

applicable statutes, or this part. 

(b) Each request for adjustment or 

exception must be in writing and 

contain a complete statement of all the 

facts and circumstances related to the 

provision of this part or official action 

from which adjustment or exception is 

sought and a full and precise statement 

of the reasons why relief should be 

provided. 

(c) The submission of a request for 

adjustment or exception shall not 

relieve any person from the obligation of 

complying with the provision of this 

part or official action in question while 

the request is being considered unless 

such interim relief is granted in writing 

by the Office of Intelligence, Security, 

and Emergency Response. 

(d) A decision of the Defense 

Production Act Activities Coordinator 

under this section may be appealed to 

the Assistant Secretary for 

Administration. (For information on the 

appeal procedure, see § 33.81.) 

§ 33.81 Appeals. 

(a) Any person who has had a request 

for adjustment or exception denied by 

the Defense Production Act Activities 

Coordinator under § 33.80, may appeal 

to the Department of Transportation’s 

Assistant Secretary for Administration, 

who shall review and reconsider the 

denial. 

(b)(1) Except as provided in paragraph 

(b)(2) of this section, an appeal must be 

received by the Assistant Secretary for 

Administration no later than 45 days 

after receipt of a written notice of denial 

from the Defense Production Act 

Activities Coordinator. After this 45-day 

period, an appeal may be accepted at 

the discretion of the Assistant Secretary 

for Administration for good cause 

shown. 

(2) For requests for adjustment or 

exception involving rated orders placed 

for the purpose of emergency 

preparedness, an appeal must be 

received by the Assistant Secretary for 

Administration, no later than five (5) 

days after receipt of a written notice of 

denial from the Defense Production Act 

Activities Coordinator. Contract 

performance under the order shall not 

be stayed pending resolution of the 

appeal. 

(c) Each appeal must be in writing 

and contain a complete statement of all 

the facts and circumstances related to 

the action appealed from, all necessary 

documents, and a full and precise 

statement of the reasons the decision 

should be modified or reversed. 

(d) In addition to the written materials 

submitted in support of an appeal, an 

appellant may request, in writing, an 

opportunity for an informal hearing. 

This request may be granted or denied 

at the discretion of the Assistant 

Secretary for Administration. 

(e) When a hearing is granted, the 

Assistant Secretary for Administration 

may designate an employee of the Office 

of the Senior Procurement Executive to 

conduct the hearing and to prepare a 

report. The hearing officer shall 

determine all procedural questions and 

impose such time or other limitations 

deemed reasonable. In the event that the 

hearing officer decides that a printed 

transcript is necessary, all expenses 

shall be borne by the appellant. 

(f) When determining an appeal, the 

Assistant Secretary for Administration 

may consider all information submitted 

during the appeal as well as any 

recommendations, reports, or other 

relevant information and documents 

available to the Department of 

Transportation, or consult with any 

other persons or groups. 

(g) The submission of an appeal under 

this section shall not relieve any person 

from the obligation of complying with 

the provision of this part or official 

action in question while the appeal is 

being considered unless such relief is 

granted in writing by the Assistant 

Secretary for Administration. 

(h) The decision of the Assistant 

Secretary for Administration shall be 

made within five (5) working days after 

receipt of the appeal, or within one (1) 

working day for appeals pertaining to 

emergency preparedness and shall be 

the final administrative action. It shall 

be issued to the appellant in writing 

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with a statement of the reasons for the 

decision. 

Subpart I—Miscellaneous Provisions 

§ 33.90 Protection against claims. 

A person shall not be held liable for 

damages or penalties for any act or 

failure to act resulting directly or 

indirectly from compliance with any 

provision of this part, or an official 

action, notwithstanding that such 

provision or action shall subsequently 

be declared invalid by judicial or other 

competent authority. 

§ 33.91 Records and reports. 

(a) Persons are required to make and 

preserve for at least three years, accurate 

and complete records of any transaction 

covered by this part or an official action. 

(b) Records must be maintained in 

sufficient detail to permit the 

determination, upon examination, of 

whether each transaction complies with 

the provisions of this part or any official 

action. However, this part does not 

specify any particular method or system 

to be used. 

(c) Records required to be maintained 

by this part must be made available for 

examination on demand by duly 

authorized representatives of the 

Department of Transportation as 

provided in § 33.71. 

(d) In addition, persons must develop, 

maintain, and submit any other records 

and reports to the Department of 

Transportation that may be required for 

the administration of the Defense 

Production Act and other applicable 

statutes, and this part. 

(e) Section 705(d) of the Defense 

Production Act, as implemented by 

Executive Order 13603, provides that 

information obtained under this section 

which the Secretary deems confidential, 

or with reference to which a request for 

confidential treatment is made by the 

person furnishing such information, 

shall not be published or disclosed 

unless the Secretary determines that the 

withholding of this information is 

contrary to the interest of the national 

defense. Information required to be 

submitted to the Department of 

Transportation in connection with the 

enforcement or administration of the 

Defense Production Act, this part, or an 

official action, is deemed to be 

confidential under section 705(d) of the 

Defense Production Act and shall be 

handled in accordance with applicable 

Federal law. 

§ 33.92 Applicability of this part and 

official actions. 

(a) This part and all official actions, 

unless specifically stated otherwise, 

apply to transactions in any State, 

territory, or possession of the United 

States and the District of Columbia. 

(b) This part and all official actions 

apply not only to deliveries to other 

persons but also include deliveries to 

affiliates and subsidiaries of a person 

and deliveries from one branch, 

division, or section of a single entity to 

another branch, division, or section 

under common ownership or control. 

(c) This part and its schedules shall 

not be construed to affect any 

administrative actions taken by the 

Department of Transportation, or any 

outstanding contracts or orders placed 

pursuant to any of the parts, orders, 

schedules or delegations of authority 

previously issued by the Department of 

Transportation pursuant to authority 

granted by the President to the 

Department under in the Defense 

Production Act. Such actions, contracts, 

or orders shall continue in full force and 

effect under this part unless modified or 

terminated by proper authority. 

§ 33.93 Communications. 

All communications concerning this 

part, including requests for copies of the 

part and explanatory information, 

requests for guidance or clarification, 

and requests for adjustment or 

exception shall be addressed to the 

Defense Production Act Activities 

Coordinator, Office of Intelligence, 

Security and Emergency Response, 1200 

New Jersey Avenue SE., Washington, 

DC 20590. 

BILLING CODE 4910–9X–P 

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Schedule 1 to Part 33—Approved 

Programs 

The programs listed in this schedule have 

been approved for priorities and allocations 

support under this part by DoD, DOE, or 

DHS, in accordance with section 203 of 

Executive Order 13603. They have equal 

preferential status. 

Approved Program—[Reserved] 

Program Identification Symbol—[Reserved] 

[FR Doc. 2012–23789 Filed 9–28–12; 8:45 am] 

BILLING CODE 4910–9X–C 

DEPARTMENT OF TRANSPORTATION 

Federal Motor Carrier Safety 

Administration 

49 CFR Parts 303, 325, 350, 355, 356, 

360, 365, 366, 367, 368, 369, 370, 371, 

372, 373, 374, 375, 376, 377, 378, 379, 

380, 381, 382, 383, 384, 385, 386, 387, 

388, 389, 390, 391, 392, 393, 395, 396, 

397, 398, and 399, and Appendices B 

and G of Subchapter B of Chapter III 

[Docket No. FMCSA–2012–0274] 

RIN 2126–AB54 

Technical, Organizational, and 

Conforming Amendments to the 

Federal Motor Carrier Safety 

Regulations 

AGENCY: Federal Motor Carrier Safety 

Administration (FMCSA), DOT. 

ACTION: Final rule. 

SUMMARY: This final rule makes 

technical corrections throughout title 49 

CFR subtitle B, chapter III. The Agency 

is making minor editorial changes to 

add revised delegations of authority 

from the Secretary of Transportation 

(Secretary), correct errors and 

omissions, and improve clarity. This 

rule does not make any substantive 

changes to the affected parts of the 

Federal Motor Carrier Safety 

Regulations (FMCSRs). 

DATES: Effective October 1, 2012. The 

incorporation by reference of a certain 

publication listed in the rule is 

approved by the Director of the Federal 

Register as of October 1, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Andrea Manka or Elaine Walls, Federal 

Motor Carrier Safety Administration, 

Office of the Chief Counsel, Regulatory 

Affairs Division, 1200 New Jersey 

Avenue SE., Washington, DC 20590– 

0001, by telephone, for Ms. Manka at 

(202) 366–0975 or via email at 

andrea.manka@dot.gov; and for Ms. 

Walls at (202) 366–1394 or via email at 

elaine.walls@dot.gov. Office hours are 

from 9 a.m. to 5 p.m. e.t., Monday 

through Friday, except Federal holidays. 

If you have questions on viewing the 

docket, call Renee V. Wright, Program 

Manager, Docket Operations, telephone 

202–366–9826. 

SUPPLEMENTARY INFORMATION: 

I. Legal Basis for the Rulemaking 

Congress delegated certain powers to 

regulate interstate commerce to the 

United States Department of 

Transportation (DOT) in numerous 

pieces of legislation, most notably in 

section 6 of the Department of 

Transportation Act (DOT Act) (Pub. L. 

85–670, 80 Stat. 931 (1966)). Section 55 

of the DOT Act transferred to DOT the 

authority of the former Interstate 

Commerce Commission (ICC) to regulate 

the qualifications and maximum hoursof-service of employees, the safety of 

operations, and the equipment of motor 

carriers in interstate commerce. See 49 

U.S.C. 104. This authority, first granted 

to the ICC in the Motor Carrier Act of 

1935 (Pub. L. 74–255, 49 Stat. 543, Aug. 

9, 1935), now appears in chapter 315 of 

title 49 of the U.S. Code. The regulations 

issued under this authority became 

known as the FMCSRs, appearing 

generally at 49 CFR parts 350–399. The 

administrative powers to enforce 

chapter 315 were also transferred from 

the ICC to the DOT in 1966 and appear 

in chapter 5 of title 49 of the U.S. Code. 

The Secretary of DOT delegated 

oversight of these provisions to the 

Federal Highway Administration 

(FHWA), a predecessor agency of 

FMCSA. 

Between 1984 and 1999, a number of 

statutes added to FHWA’s authority. 

Various statutes authorize the 

enforcement of the FMCSRs, the 

Hazardous Materials Regulations 

(HMRs), and the Commercial 

Regulations, and provide both civil and 

criminal penalties for violations. These 

statutes include the Motor Carrier Safety 

Act of 1984 (Pub. L. 98–554, 98 Stat. 

2832, Oct. 30, 1984), codified at 49 

U.S.C. chapter 311, subchapter III; the 

Commercial Motor Vehicle Safety Act of 

1986 (Pub. L. 99–570, 100 Stat. 3207– 

170, Oct. 27, 1986), codified at 49 U.S.C. 

chapter 313; the Hazardous Materials 

Transportation Uniform Safety Act of 

1990, as amended (Pub. L. 101–615, 104 

Stat. 3244, Nov. 16, 1990), codified at 49 

U.S.C. chapter 51; and the ICC 

Termination Act of 1995 (Pub. L. 104– 

88, 109 Stat. 803, Dec. 29, 1995), 

codified at 49 U.S.C. chapters 131–149. 

The Motor Carrier Safety 

Improvement Act of 1999 (MCSIA) (Pub. 

L. 106–159, 113 Stat. 1748, Dec. 9, 1999) 

established FMCSA as a new operating 

administration within the DOT, 

effective January 1, 2000. The motor 

carrier safety staff and responsibilities 

previously assigned to FHWA are now 

assigned to FMCSA. Congress 

expanded, modified, and amended 

FMCSA’s authority in the Uniting and 

Strengthening America by Providing 

Appropriate Tools Required to Intercept 

and Obstruct Terrorism (USA PATRIOT) 

Act of 2001 (Pub. L. 107–56, 115 Stat. 

272, Oct. 26, 2001), the Safe, 

Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for 

Users (SAFETEA–LU) (Pub. L. 109–59, 

119 Stat. 1144, Aug. 10, 2005), the 

SAFETEA–LU Technical Corrections 

Act of 2008 (Pub. L. 110–244, 122 Stat. 

1572, June 6, 2008), and the Moving 

Ahead for Progress in the 21st Century 

Act (MAP–21) (Pub. L. 112–141, July 6, 

2012). 

Most of the provisions of the FMCSRs 

amended by this rule are based on the 

statutes detailed above. The legal 

authority for each of those provisions 

was explained when the requirement 

was originally adopted and is 

summarized at the beginning of each 

part in title 49 of the Code of Federal 

Regulations (CFR). No further analysis is 

required here. Title 49 CFR subtitle B, 

chapter III, contains all of the FMCSRs. 

On August 17, 2012, the Secretary 

issued a final rule (77 FR 49964) to 

update the CFR sections that set forth 

the organizational structure of the 

Department and delegations of authority 

from the Secretary to other modal 

administrations—including the FMCSA. 

Because the Secretary revised part 1 of 

subtitle A of title 49, CFR, by moving 

FMCSA delegations from 49 CFR 1.73 to 

49 CFR 1.87, FMCSA must also revise 

all of its delegations of authority 

citations in chapter III of subtitle B of 

title 49, CFR, to accommodate this 

change. 

The Administrative Procedure Act 

(APA) (5 U.S.C. 553) specifically 

provides that exceptions to its notice 

and public comment rulemaking 

procedures are not required where the 

Agency finds there is good cause (and 

incorporates the finding and a brief 

statement of reasons therefor in the 

rules issued) to dispense with them. 

Generally, good cause exists where the 

Agency determines that notice and 

public procedures are impractical, 

unnecessary, or contrary to the public 

interest. (see 5 U.S.C. 553(b). The 

amendments made in this final rule 

merely correct inadvertent errors and 

omissions, remove obsolete references, 

and make minor editorial changes to 

improve clarity and consistency. The 

technical amendments do not impose 

any new requirements, nor do they 

make any substantive changes to the 

CFR. For these reasons, the FMCSA 

finds good cause that notice and public 

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