[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33409-33414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16147]


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DEPARTMENT OF DEFENSE

Department of the Army

32 CFR Part 619


Program for Qualifying DOD, Motor Common Carriers of Perishable 
Subsistence and Bulk Fuel

AGENCY: Military Traffic Management Command, DOD.

ACTION: Proposed rule.

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SUMMARY: This action revises the qualifications standards to the basic 
agreement between the Military Traffic Management Command and Motor 
Common Carriers for Approval to Transport General Commodities for and 
on behalf of U.S. Department of Defense. This action also updates the 
basic agreement between the Military Traffic Management Command and 
Motor Common Carriers for Governing the Transportation of Hazardous 
Material other than Class A and B Explosives for and on Behalf of the 
U.S. Department of Defense. The proposal to amend those qualifications, 
where appropriate, are submitted to be consistent with the program 
qualifications for DOD Motor Common Carriers of Perishable Subsistence 
and Bulk Fuel.

DATES: Comments must be received by July 29, 1996.

ADDRESSES: Headquarters, Military Traffic Management Command, ATTN: 
MTOP-Q, 5611 Columbia Pike, Falls Church, Virginia 22041-5050.

FOR FURTHER INFORMATION CONTACT:
Mr. Rick Wirtz at (703) 681-6393; Headquarters, Military Traffic 
Management Command, ATTN: MTOP-QQ, 5611 Columbia Pike, Falls Church, 
Virginia 22041-5050.

SUPPLEMENTARY INFORMATION: Basic information on the Carrier 
Qualification Program was previously published in the Federal Register, 
53 FR 17970, 54 FR 17070, 54 FR 27667, 55 FR 7361, 55 FR 52976, 56 FR 
45895, and 57 FR 11376.

Executive Order 12219

    This proposed rule was reviewed under Executive Order 12219 and the 
Secretary of the Army has classified this action as non major. The 
effect of the rule on the economy will be less than $100 million.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 and the Secretary of the Army has 
certified that this action does not have a significant impact on a 
substantial number of small entities. The objective of the program is 
to ensure that DOD obtains safe, dependable and reliable transportation 
services. The requirements are not designed to preclude participation 
by small business. Rather, they are part of a mechanism designed to 
ensure that the traffic offered to small businesses does not exceed 
their capabilities. The program's reporting and record keeping 
requirements are essentially administrative in nature and do not demand 
significant expenditures of resources such as personnel, computer 
equipment, or software. No professional or technical training is 
necessary to comply with these requirements. Alternatives to facilitate 
entry of small businesses have been identified and implemented.

Paperwork Reduction Act

    This rule has been approved by the Office of Management and Budget 
as required under the requirements of the Paperwork Reduction Act of 
1980 (44 U.S.C. 3507).

List of Subjects in 32 CFR Part 619

    Common carriers, Freight, Motor vehicle, Safety, Shipping, and 
Trucks.

    Accordingly, Title 32, Part 619, of the Code of Federal Regulations 
is amended by the following changes:

PART 619 [AMENDED]

    1. The authority citation for part 619 continues to read as 
follows:

    Authority: 49 U.S.C. 1801-1813, 2503, 2505, and 2509.

    2. In Sec. 619.4, the Insurance--Public liability and cargo text is 
amended by revising paragraphs (b), introductory text, (b) (3) and (4) 
as follows:


Sec. 619.4  Insurance--public liability and cargo.

* * * * *
    (b) Cargo. Motor common carriers, surface freight forwarders, 
shipper agents and air freight forwarders must have their insurance 
company provide a certificate of insurance form. The deductible portion 
will be shown on the certificate. The insurance underwriter must have a 
policyholder's rating in the Best's Insurance Guide, listed in the 
Fiscal Service Treasury Department Circular 570, Listing of Surety 
Companies or specifically approved by HQMTMC. DOD's minimum cargo 
insurance requirements are listed below.
* * * * *
    (3) Perishables carriers--$10,000 per shipment.
    (4) Bulk Fuel carriers--$10,000 per shipment.
* * * * *
    3. Appendix A to Part 619 is revised to read as follows:

Appendix A to Part 619--Basic Agreement Between the Military Traffic 
Management Command and Motor Common Carriers for Approval To Transport 
General Commodities for and on Behalf of U.S. Department of Defense.

    1. The undersigned, who is duly authorized and empowered to act 
on behalf of ____________ (Name of Company, Typed or Legibly 
Printed), hereinafter called the carrier, as a prerequisite for 
approval to transport general commodities for the account of the 
Department of Defense (DOD) and the Military Traffic Management 
Command (MTMC), hereinafter called the Government, agree to comply 
with all additional requirements, terms and conditions as set forth 
in this Agreement. This Agreement governs the transportation of all 
DOD general commodity freight administered by the Carrier 
Qualification Division, MTMC (except used household goods). 
Noncompliance by the carrier with any provision of this Agreement 
may result in MTMC taking action against the carrier under the 
Carrier Performance Program, governed by MTMC Regulation 15-1, and 
revoking approval to participate in this traffic. If the carrier's 
approval is revoked, the carrier may be disqualified from further 
participation in any DOD Freight Traffic.
    2. Approval and Revocation. a. Carrier understands that its 
initial approval and

[[Page 33410]]

retention of approval are contingent upon establishing and 
maintaining, to MTMC's satisfaction, sufficient resources to support 
its propose scope of operations and services. Sufficient resources 
include equipment, personnel facilities, and finances to handle 
traffic anticipated by DOD/MTMC under the carrier's proposed scope 
of operations in accordance with the service requirements of the 
shipper.
    b. The carrier understands that MTMC may revoke approval at any 
time upon discovery of grounds for ineligibility or 
disqualification. The carrier further understands that it is not 
authorized to submit tenders for shipments requiring a 
Transportation Protective Service (TPS) until it has served DOD in 
an approved status for 12 continuous months. Prior to being allowed 
to handle shipments which require a TPS or classes A & B explosives, 
the carrier must first meet any additional requirements in effect at 
the time.
    c. In addition to the initial evaluation, the carrier agrees 
that it will cooperate with MTMC follow-up evaluations at any time 
subsequent to signing this Agreement to confirm continued 
eligibility.
    d. The carrier certifies that neither the owners, company, 
corporate officials, nor any affiliation or subsidiary thereof are 
currently debarred or suspended, disqualified by a MTMC General 
Freight Board, or placed in non-use by MTMC from doing business with 
DOD.
    3. Lawful Performance.
    a. Carrier agrees to comply with all applicable Federal, State, 
municipal, and other local laws and regulations governing the safe, 
proper, and lawful operation of motor vehicles, to include Title 49 
Code of Federal Regulations (CFR) 386-397. Intrastate carriers are 
required to comply with all applicable state or federal regulations, 
whichever are more stringent.
    b. No fines, charges, or assessments for overload vehicles or 
other violations of applicable laws and regulations will be passed 
to or be paid by any agency of the Federal Government.
    4. Operating Authority. Carrier agrees to maintain valid motor 
common carrier operating certificates for its scope of operations. 
Any carrier found to be involved in brokerage, as defined by the 
Interstate Commerce Commission (ICC), of DOD freight traffic will 
have its approval revoked.
    5. Insurance. a. Minimum public liability insurance requirements 
are prescribed in title 49 of the Code of Federal Regulations (CFR) 
5387.9. Carrier agrees to ensure that the ICC is provided proof of 
their public liability insurance, in the form of a BMC 91 or 91-X, 
or MCS 90, in accordance with sections 29 and 30 of the Motor 
Carrier Act of 1980. Further, the motor carrier agrees to provide 
MTMC with a certificate of insurance form. The certificate holder 
block of the form will indicate that MTMC, 5611 Columbia Pike, Falls 
Church, Virginia 22041-5050, ATTN: MTOP-QQ, will be notified in 
writing, 30 days in advance of any change or cancellation. The 
deductible portion will be shown on the certificate. The insurance 
underwriter must have a policy holder's rating of ``Excellent'' or 
better in the Best's Key Rating Guide.
    (1) The carrier agrees to also file with MTMC proof of: $750,000 
per vehicle for property (excluding hazardous) and $1,000,000 per 
vehicle for oil, hazardous wastes, hazardous materials and hazardous 
substances defined in 49 Code of Federal Regulations (CFR) 171.8 and 
listed in 49 CFR 172.101.
    (2) Public liability insurance Intrastate Carriers--Public 
liability insurance shall be that as required by the state, except 
that for deregulated states, public liability shall be the same as 
that required of interstate carriers.
    (3) Cargo insurance. Cargo insurance in the minimum $150,000 for 
loss and damages of government freight per vehicle and/or $20,000 
per vehicle and/or $20,000 per vehicle transported (e.g. automobile 
transporters or vehicles in haulaway service) must be maintained. 
Perishable carriers will maintain, as a minimum, cargo insurance in 
the amount of $10,000 per shipment and bulk petroleum carriers will 
maintain $10,000 per shipment.
    b. The insurance, carrier in the name of the carrier, will be in 
force at all times while this Agreement is in effect or until such 
time as the carrier cancels all tenders. The carrier agrees to 
ensure that the policies include a provision requiring the insurer 
to notify MTMC prior to any performance of service for the carrier. 
Charges, renewals, and cancellation notices must also be sent to 
MTMC, 5611 Columbia Pike, Falls Church, Virginia 22041-5050, ATTN: 
MTOP-QQ. This requirement applies to both interstate and intrastate 
carriers. Carrier's insurance policy(s) must cover all equipment 
used to transport DOD freight.
    6. Performance Bond. a. Carrier agrees to provide MTMC with a 
Performance Bond. The bond secures performance and fulfillment of 
the carrier obligation to deliver DOD freight to destination. It 
will cover DOD re-procurement costs as a result of carrier default, 
abandoned shipments, or bankruptcy. The bond will not be utilized 
for operational problems such as late pick up or delivery, excessive 
transit time, refusals, no shows, improper/inadequate equipment or 
claims for lost or damaged cargo. The bond must be issued by a 
surety company listed in the Fiscal Service Treasury Department 
Circular No. 570. The bond must be completed on the form provided by 
MTMC. The bond will be continuous until canceled. MTMC will be 
notified in writing 30 days in advance of any change or 
cancellation. A letter of intent by the surety company is required 
with the initial application package. Upon MTMC approval, the 
carrier agrees to submit the Performance Bond before the Tender of 
Service will be accepted.
    b. The sum of the bond will be determined as follows:
    (1) Carriers having done business in their own name with DOD for 
3 years or more will be required to submit a Performance Bond in the 
amount of 2.5% of their total DOD revenue, taken from the Freight 
Information Systems Report (FINS), for the previous 12 months, not 
to exceed $100,000 and not less than $25,000.
    (2) New carriers and those carriers having done business in 
their own name with the DOD for less than 3 years will be required 
to submit a Performance Bond based on areas of service they offer. 
Areas of service will be computed as both origins and destinations 
served. 1 state (including intrastate)--$25,000; 2 to 3 states--
$50,000; 4 or more states--$100,000.
    (3) Once a carrier has been doing business with the DOD for 3 
years, their bond requirement will change from area of service to 
percent revenue.
    c. Bulk fuel carriers and Perishable carriers will be required 
to submit a $25,000 Performance Bond.
    d. Local drayage and commercial zone carriers are exempt from 
the bond requirement.
    e. If carrier has secured the Performance Bond as a result of 
qualifying under Ammunition and Explosive, Classes A and B program 
or hazardous materials, other than ammunition and explosives, 
Classes A and B program no additional Performance Bond is required.
    7. Safety. a. Carrier will not have an ``unsatisfactory'' safety 
rating with the Federal Highway Administration, Department of 
Transportation, and, if it is an intrastate motor carrier, with the 
appropriate state agency. The carrier further agrees to permit 
unannounced safety inspections of its facilities, terminals, 
equipment, employees, and procedures by DOD civilian, military 
personnel, or DOD contract employees. The inspection may include in-
transit surveillance of vehicles and drivers. The carrier agrees to 
provide evidence that fulfills the requirement set forth in 49 Code 
of Federal Regulations parts 390 through 396. Inspection of carrier 
equipment, drivers' records, route plans and inspection reports will 
be permitted during both the pickup and delivery of shipments and in 
coordination with local police or other authorities while in 
transit. Carrier also agrees to allow inspection of carrier records 
and individual driver qualification files. When requested, carrier 
agrees to provide adequate evidence of an active driver safety, 
security training and evaluation program. Upon request, the 
information to permit MTMC to verify or inspect carrier and driver 
records.
    b. The carrier agrees to have in place a company-wide safety 
management program. Carrier safety program will comply with 
applicable Federal, State, and local statutes or requirements. 
Safety programs at the company-wide level may be subject to 
evaluation by DOD representatives.
    c. The carrier agrees to notify, within 24 hours, the consignor 
and consignee named by the Government Bill of Lading (GBL) or 
Commercial Bill of Lading (CBL) of cargo loss, damage, or unusual 
delay. Information reported will include origin/destination, GBL/CBL 
number, shipping paper and other pertinent accident details. When 
requested, carrier agrees to furnish MTMC a copy of accident reports 
submitted to the Department of Transportation on Form MCS 50-T 
(Property).
    8. Drivers Requirement. a. The carrier agrees to ensure that any 
driver used by the carrier to transport DOD freight possesses a 
valid commercial driver's license (in compliance with Federal 
Commercial Motor

[[Page 33411]]

Vehicle Safety Act of 1986) issued by his or her state of domicile. 
Drivers must have a minimum 1 year of driving experience driving 
equipment similar to that used to transport DOD freight, or have 
proof of graduation from an accredited trade truck motor driving 
school, operating the aforementioned equipment.
    b. The carrier agrees to further ensure that driver carry a 
company picture identification card to verify affiliation with the 
carrier named on the Government Bill of Lading.
    9. Equipment. The carrier is prohibited from using trip-leased 
equipment or drivers, except upon prior approval from MTMC. Leases 
of less than 30 days are considered trip-leases. In order to trip-
lease, a carrier must apply for approval under MTMC's trip-lease 
program. In order to trip-lease, a carrier must apply for approval 
under MTMC's trip-lease program.
    10. Shipment. The carrier agrees to provide, at no additional 
cost to the government, the status of any shipment within 24 hours 
after an inquiry is made. Further, the carrier agrees to not divulge 
any information to unauthorized persons concerning the nature and 
movement of any DOD shipment.
    11. Documentation. a. The carrier agrees to accept GBLs and CBLs 
on which freight charges will be paid by the Government, and be 
bound by all terms stated on the SF 1103, Government Bill of Lading, 
regardless of the type of bill of lading tendered.
    b. The carrier agrees to comply with the documentation prelodge 
procedures in effect at Military Ocean Terminals or the 
installation, when cargo is consigned for further movement overseas. 
(Prelodging is the submission of advance shipment documents which 
identifies the shipment to the Military Ocean Terminal prior to 
delivery of the cargo at the terminal.) Instructions will be 
provided by the consignor to furnish certain data at least 24 hours 
in advance of cargo delivery to the terminal.
    12. Loss of Damage. The carrier agrees to be liable for loss or 
damage to cargo in accordance with the provisions of 49 U.S.C. 11707 
(the Carmack Amendment to the Interstate Commerce Act). Carrier 
agrees to promptly settle uncontested claims for loss or damage.
    13. Standard Tender of Service. a. The carrier agrees to comply 
with the preparation and filing instructions in applicable freight 
traffic rules publications issued by MTMC. Carrier understands that 
MTMC will reject tenders not in compliance with these instructions.
    b. Carrier agrees to provide a street address where the company 
office is located in lieu of a post office box number. Carrier 
agrees to provide the address prior to or in conjunction with 
submission of any tenders or other rate schedules. The carrier 
agrees to also advise MTMC of any change in address prior to the 
effective date of the change. Failure to do so is grounds to 
discontinue use of the carriers.
    c. Carrier understands that tenders inadvertently accepted and 
distributed for use and not in compliance with this agreement, the 
provisions contained in the Standard Tender of Freight Services (MT 
Form 364-R), or the applicable MTMC Freight Traffic Rules 
Publication, and supplements thereof, will be subject to immediate 
removal or non-use until corrections are made. The issuing carrier 
tender will be placed in an inactive status.
    14. Rates. a. Carrier agrees to transport Government shipments 
at the lowest tender rate specifically applicable to the department 
or agency involved.
    b. Carrier agrees to publish guaranteed through rates for at 
least 30 days. These rates must be filed with MTMC, HQ, Eastern 
Area, ATTN: MTE-IN, Bayonne, New Jersey 07002-5302. The carrier must 
publish all rates, charges, and accessorial services on a MTMC 
approved form, and must comply with the tender preparation 
instructions. (Only services annotated with a charge in the tender 
will be paid by the shipper.)
    15. Carrier Performance. Carrier agrees that carrier's 
equipment, performance, and standards of service will conform with 
its obligations under Federal, State and local law and regulation as 
well as with the guidelines found in the Defense Traffic Management 
Regulation (DTMR) and this Agreement. The carrier fully understands 
its obligation to remain current in its knowledge of service 
standards. The carrier accepts the government's right to revoke 
approval, declare ineligible, non-use, or disqualify the carrier for 
unsatisfactory service for any operating deficiency, noncompliance 
with terms of this Agreement or terms of any negotiated agreements, 
tariffs, tenders, bills of lading or similar arrangements 
determining the relationship of the parties, or for the publications 
or assessment of unreasonable rates, charges, rules, descriptions 
classifications, practices, or other unreasonable provisions of 
tariffs/tenders. Rules governing the Carrier Performance Program are 
found in MTMC Regulation 15-1, and Army Regulation 55-355, DTMR. If 
a carrier is removed or disqualified for 6 months or more, it will 
have to be re-qualified.
    16. General Provisions. The carrier agrees to possess a valid 
Standard Carrier Alpha Code (SCAC). When a company holding the 
appropriate authority has operating divisions each with its own 
unique SCAC, each such division is required to execute a separate 
agreement with MTMC governing the transportation of protected 
commodities.
    17. Terms of the Agreement. a. The terms of this Agreement will 
be applicable to each shipment.
    b. This agreement shall be effective from the date of approval 
by MTMC, until terminated. Termination is effective upon receipt of 
written notice by either party.
    c. Nothing in this Agreement will be construed as a guarantee by 
the Government of any particular volume of traffic.
    d. The carrier agrees to immediately notify MTMC of any changes 
in ownership, in affiliations, executive officers, and/or board 
members, and carrier name. Carrier understands that failure to 
notify MTMC shall be grounds for immediate revocation of the 
carrier's approval and their participation in the movement of DOD 
freight.
    18. Additional Specialized Requirements. The terms of this 
Agreement will not prevent different or additional requirements with 
respect to negotiated agreements or added requirements for other 
types of service and/or commodities.
    19. Inquiries. Inquiries may be referred to: Commander, Military 
Traffic Management Command, ATTN: MTOP-QQ, 5611 Columbia Pike, Falls 
Church, VA 22041-5050.
    20. Carrier Acknowledgment and Acceptance. The certifying 
carrier official agrees to ensure that the appropriate company 
officials and employees are familiar with the requirements, terms, 
and conditions of this Agreement and are in full compliance with the 
applicable provisions herein. Any information found to be falsely 
represented in the Motor Carrier Qualification Form, the attachments 
or during the qualification procedures, to include additional 
requirements of this Agreement, shall be grounds for automatic 
revocation of this Agreement and immediate non-use of the carrier, 
the affiliated companies, divisions and entities.

I,---------------------------------------------------------------------
(Typed Name and Title of Carrier Official) verify under penalty of 
perjury under the laws of the United States of America, that the 
information contained in the carrier qualification application 
packet and this Agreement is true, correct and complete. If 
representing a company or organization, I certify that I am 
qualified and authorized to offer this information. I know that 
willful misstatements or omissions of material facts constitute 
Federal criminal violations punishable under 18 U.S.C. 1001 by up to 
5 years imprisonment and fines up to $10,000 for each offense, or 
punishable as perjury under 18 U.S.C. 1621 by fines up to $2,000 or 
imprisonment up to 5 years for each offense. Further I understand 
the requirements of this Agreement and on behalf of

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(Typed Name of Carrier and MC Number) agree to comply with the terms 
and conditions contained herein. Signature of Carrier Official and 
Title

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Date

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Carrier Address

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Telephone number

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24 hr Emergency Number

(________, ________) Interstate Operating Authority Certificate 
Number--MC
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Intrastate Operating Authority

    4. Appendix C to part 619 is revised as follows:

Appendix C to Part 619--Agreement Between the Military Traffic 
Management Command and Motor Common Carriers Governing the 
Transportation of Hazardous Material Other Than Class A and B 
Explosives for and on Behalf of the U.S. Department of Defense.

    1. I, the undersigned, who is duly authorized and empowered to 
act on behalf

[[Page 33412]]

of ________________________________________, hereinafter called the 
carrier to transport hazardous materials, (other than class A and B 
explosives), as defined in 49 Code of Federal Regulations (CFR) 
172.3. Hazardous commodities in bulk include, but not limited to, 
such items as gasoline, kerosene, lubricating oil, turbine fuel and 
fuel oil, for the account for the DOD and the Military Traffic 
Management Command (MTMC), hereinafter called the Government, agrees 
to comply with all additional requirements, terms and conditions as 
set forth in this Agreement. If the carrier wishes to participate in 
DOD traffic, which requires a protective service, the carrier must 
also be a party to and in full compliance with requirements 
contained in the Agreement governing shipments which required a 
Transportation Protective Service (TPS). Noncompliance by the 
carrier with any provision of this or any other Agreement it is a 
party to will be sufficient grounds for immediate revocation of the 
carrier's approval to participate in the movement of hazardous 
materials. This carrier may also be subject to further action under 
the carrier Performance Program, governed by MTMC Regulation 15-1, 
which could result in nationwide disqualification on all DOD freight 
shipments.
    2. Approval and Revocation. a. Carrier understands that its 
initial approval and retention of approval are contingent upon 
establishing and maintaining to MTMC's satisfaction, sufficient 
resources to support its proposed scope of operations and services. 
Sufficient resources include equipment, personnel, facilities, and 
finances to handle traffic anticipated by DOD/MTMC under the 
carrier's proposed scope of operations in accordance with the 
service requirements of the shipper.
    b. The carrier understands that MTMC may revoke approval at any 
time upon discovery of grounds for ineligibility or 
disqualification. The carrier further understands that it is not 
authorized to submit tenders for shipments requiring a TPS until it 
has served DOD in an approved status for 12 continuous months. Prior 
to being allowed to handle shipments which require a TPS or class A 
and B explosives, the carrier must first meet any additional 
requirements in effect at that time.
    c. In addition to the initial evaluation, the carrier agrees 
that it will cooperate with MTMC follow-up evaluations at any time 
subsequent to signing this agreement to confirm continued 
eligibility.
    d. The carrier certifies that neither the owners, company, 
corporate officials, nor any affiliation or subsidiary thereof are 
currently debarred or suspended, disqualified by a MTMC General 
Freight Board, or placed in non-use by MTMC from doing business with 
DOD.
    3. Lawful Performance. a. Carrier agrees to comply with all 
applicable Federal, State, municipal, and other local law and 
regulations governing the safe, proper, and lawful operation of 
motor vehicles, to include Title 49 Code of Federal Regulations 
(CFR) 177 and 386 through 397. Provisions for exempt intricate 
operations as defined in 49 CFR will not apply to the transpiration 
of explosives for the DOD. Intrastate carries are required to comply 
with all applicable state or federal regulations, whichever are more 
stringent.
    b. No fines, charges, or assessments for overloaded vehicles or 
other violations of applicable laws and regulations will be passed 
to or be paid by any agency of the Federal Government.
    4. Operating Authority. Carrier agrees to maintain valid Motor 
Common Carrier operating certificates for its scope of operations 
which is not restricted against the handling and transport of 
hazardous materials or ammunition and explosives, class A and B. Any 
carrier found to be involved in brokerage, as defined by the 
Interstate Commerce Commission (ICC), of DOD freight traffic will 
have its approval revoked.
    5. Insurance. a. Minimum public liability insurance requirements 
are prescribed in title 49 of the Code of Federal Regulations (CFR) 
387.9. Carrier agrees to ensure that the ICC is provided proof of 
their public liability insurance, in the form of a BMC 91 or 91-X, 
or MCS 90, in accordance with sections 29 and 30 of the Motor 
Carrier Act of 1980. Further, the Motor carrier agrees to provide 
MTMC with a certificate of insurance form. The certificate holder 
block of the form will indicate that MTMC, ATTN: MTOP-QQ, will be 
notified in writing, 30 days in advance of any change or 
cancellation. The deductible portion will be shown on the 
certificate. The insurance underwriter must have a policy holder's 
rating in the Best's Insurance Guide, listed in the Fiscal Service 
Treasury Department Circular 570, Listing of surety companies.
    b. The carrier agrees to also file with MTMC proof of:
    (1) Interstate Public Liability. Carrier will ensure that its 
insurance company(s) file with MTMC proof of public liability and 
property damage insurance for the transportation of hazardous 
commodities in the minimum and amounts prescribed in 49 CFR 387.9.
    (2) Intrastate Public Liability. Carrier will ensure that its 
insurance company(s) file with MTMC proof of insurance which meets 
the estate requirements for public liability and property damage for 
the transportation of hazardous materials.
    (3) Cargo Insurance. Carrier will also file with MTMC proof of 
$150,000 per incident minimum cargo insurance for loss and bulk fuel 
which is set at $10,000.
    c. The insurance, carried in the name of the carrier, will be in 
force at all times while this Agreement is in effect or until such 
time as the carrier cancels all tenders. The carrier agrees to 
ensure that the policies include a provision requiring the insurer 
to notify MTMC prior to any performance of service by the carrier. 
Changes, renewals, and cancellation notices must be also sent to: 
MTMC, ATTN: MTOP-QQ. This requirement applies to both interstate and 
intrastate carriers. Carrier's insurance policy(s) must cover all 
equipment used to transport DOD freight.
    6. Performance Bond. a. Carrier agrees to provide MTMC with a 
Performance Bond. The bond secures performance and fulfillment of 
the carrier obligation to deliver DOD freight to destination. It 
will cover DOD reprocurement costs as a result of carrier default, 
abandoned shipments, or bankruptcy by the carrier. The bond will not 
be utilized for operational problems such as late pick up or 
delivery, excessive transit time, refusals, no shows, improper/
inadequate equipment or claims for lost or damaged cargo. The bond 
must be issued by a surety company listed in the Fiscal Service 
Treasury Department Circular No. 570. The bond must be completed on 
the form provided by MTMC. The bond will be continuous until 
canceled. MTMC will be notified in writing, 30 days in advance of 
any change or cancellation. A letter of intent, by the surety 
company, is required with the initial application package. Upon MTMC 
approval, the carrier agrees to submit the performance bond before 
the Tender of Service will be accepted.
    b. The sum of the bond will be determined as follows:
    (1) Carriers having done business in their own name with DOD for 
3 years or more will be required to submit a Performance Bond in the 
amount of 2.5% of their total DOD revenue, taken from the Freight 
Information Systems Report (FINS), for the previous 12-months, not 
to exceed $100,000 and not less than $10,000.
    (2) New carriers and those carriers having done business in 
their own name with the DOD for less than 3 years will be required 
to submit a Performance Bond based on areas of service they offer. 
Areas of service will be computed as both origins and destinations 
served.
    1 state (including intrastate)--$10,000;
    2 to 3 states--$50,000; and
    4 or more states--$100,000.
    (3) Once a carrier has been doing business with the DOD for 3 
years, their bond requirement will change from areas of service to 
percent revenue.
    c. Bulk fuel carriers will be required to submit a $10,000 
performance bond.
    d. Local drayage and commercial zone carriers are exempt from 
the bond requirement.
    e. If carrier has secured the performance bond as a result of 
qualifying under the general commodity program or class A and B 
program, no additional performance bond is required.
    7. Safety and Security. a. A ``unsatisfactory'' safety rating 
with the Federal Highway Administration, Department of 
Transportation, and/or with the appropriate state agency or 
commission in the case of intrastate. Safety ratings which are 
``unsatisfactory,'' ``unconditional,'' ``insufficient information,'' 
or ``not rated'' will not be accepted. The carrier agrees to permit 
unannounced safety inspections of its facilities, terminals, 
equipment, employees, and procedures by DOD civilian, military 
personnel, or DOD contract employees, inspection. Inspection of 
carrier equipment, drivers' records, route plans and inspection 
reports will be permitted during both the pickup and delivery of 
shipments and in coordination with local police or other authorities 
while in transit. Carrier also agrees to allow inspection of carrier 
records

[[Page 33413]]

and individual driver qualification files. When requested, carrier 
agrees to provide adequate evidence of an active driver safety, 
security training and evaluation program. Carrier agrees to furnish, 
on request, driver's Social Security Numbers to verify their 
security clearances and allow for inspection of carrier/driver 
records.
    b. The carrier agrees to have in place a company-wide safety and 
security management program which includes specific on-going safety 
and security programs for each terminal location. Individual 
terminal programs will encompass planning and execution of safety 
and security in routine operations, to include emergency responders 
and planners, and with the local police and fire authority. Carrier 
programs will incorporate compliance with all applicable Federal, 
State and local statutes or requirements. Conformance with other 
safety standards, such as NFPA Code 498, will be accomplished as 
much as possible, with compensating measures for deviations. Safety 
and security programs at the company wide or terminal level may be 
subject to evaluation by a DOD representative.
    c. The carrier agrees to notify, within a reasonable period of 
time, the consignor and consignee names by the Government Bill of 
Lading (GBL) of cargo loss, damage, or unusual delay. Carrier also 
agrees to notify the consignor or consignee named on the GBL 
immediately by telephone of an accident, incident or significant 
delay. The information to be reported will include origin/
destination, GBL number, shipping paper information, time and place 
of occurrence and other pertinent accident details. Carriers agrees 
to notify the MTMC area command annotated on the GBL and the Defense 
Logistics Agency (DLA), within one half (\1/2\) hour after 
notification of the consignor and consignee, and provide status 
updates as required. The MTMC HOTLINE and AOC telephone numbers are 
as follows:

--Eastern Area: (800) 524-0331; New Jersey only: (800) 624-1361
--Western Area: (800) 331-1822; California only: (800) 348-4639
--DLA: (800) 851-8061
When requested, carrier agrees to furnish MTMC a copy of accident 
reports submitted to Department of Transportation on Form MCS 50-T 
(Property) or MCS 50-B (Passengers) when DOD classes A and B 
explosives movements are involved.

    d. Carrier agrees to provide the driver(s) transporting 
protected commodities an emergency telephone number (indicated on 
the last page of this Agreement) which, when used at any time (24-
hours a day, 7 days a week), will reach a qualified carrier 
representative who will be able to provide information and 
assistance. MTMC will be immediately notified if this telephone 
number is changed. Carrier also agrees to equip the vehicle 
transporting the material with communications equipment (citizens 
band radio, mobile phone, etc.) capable of being used to obtain 
assistance in an emergency.
    e. Carriers approved to transport DOD hazardous materials 
requiring TPS agree that no driver disqualified under 49 CFR 391.15 
will be permitted to operate any vehicle transporting such 
commodities.
    f. Carriers approved to transport DOD hazardous materials agree 
to ensure that drivers of a motor vehicle transporting such drivers 
of motor vehicle transporting such commodities must undergo a 
physical examination and must be certified physically qualified to 
drive a commercial motor vehicle in accordance with 49 CFR 391.43. 
Carrier also agrees to have driver screening programs in place to 
ensure that the provisions of this paragraph are met.
    8. Drivers Requirement. a. Driver agrees to ensure that the 
driver(s) employed to transport hazardous commodities driving 
experience (using similar equipment prior to transporting hazardous 
commodities, and that its drivers are trained and competent in the 
movement of these commodities to include an understanding of the 
following: 49 CFR part 397, instructions on procedures to be 
followed in the event of a delay, nature of the materials being 
transported, precautions to be taken in an emergency; written route 
plans; and shipping paper entries. The carrier will certify that the 
driver is trained and competent in the movement of hazardous 
commodities, and proof of certification must be carrier in the 
vehicle of the unit transporting these commodities.
    b. The carrier agrees to further ensure that driver(s) carry a 
valid commercial motor vehicle operator's license issued by his/her 
state of domicile, a certificate of physical examination issued 
during the preceding 24 months, and an employee record card, or 
similar document, one of which must contain the driver's photograph. 
The driver(s) must be 21 years of age. The driver(s) must carry a 
company picture identification to verify affiliation with the 
carrier named on the GBL.
    9. Equipment. a. Trip leased equipment, with or without drivers, 
will not be used to transport hazardous materials for the account of 
the DOD. Exceptions for the use of intermittent or occasional 
drivers in 49 CFR 391.63 will not apply to any DOD movement. Any 
equipment, with or without drivers, leased to augment carrier-owned 
equipment will be on a not less than 90-day noncancellable basis.
    b. A copy of the equipment lease agreement must be carried in 
the vehicle of the unit transporting these commodities. (Facsimile, 
Xerox, or otherwise reproduced copies are not acceptable.) 
Interchange agreements which originate at origin will be considered 
trip leases and will not be accepted. The lease must be complete at 
time of pick up and should require no further information to be 
completed by the driver. Failure to comply with this requirement or 
attempted abuse of this requirement could result in the carrier's 
participation in this type traffic to be immediately revoked and up 
to a nationwide disqualification on all DOD freight shipments should 
further action under the Carrier Performance Program be deem 
appropriate.
    c. Carriers approved to transport DOD hazardous material 
requiring TPS agree to comply with all equipment requirements 
contained in paragraph 8 of the Agreement Between the Military 
Traffic Management Command and Motor Carriers Governing the 
Transportation of Shipments Which Require a Transportation 
Protective Service for and on behalf of the U.S. Department of 
Defense.
    10. Shipment. a. Carrier is responsible for shipments from 
origin to ultimate destination. The carrier also remains responsible 
for shipments placed in a safe haven or refuge location. Carrier 
agrees not to disclose any information to unauthorized persons 
concerning the nature, kind, quantity, destination, consignee or 
routing of any hazardous material shipment tendered to it. The 
carrier further agrees to provide, at no additional cost to the 
Government, the status of any shipment within 24-hours after an 
inquiry is made.
    b. Carrier agrees to ensure that shipper-provided placards are 
displayed in accordance with the general requirements found in 49 
CFR 172.504 for the transportation of hazardous materials. The 
carrier further agrees to conform to the requirements found in 49 
CFR 177.825 pertaining to the transportation of radioactive 
materials for which placarding is required. Carrier also agrees to 
route all other shipments of hazardous commodities in accordance 
with the provisions of 49 CFR 397.9.
    c. When requested by the shipper for reasons of security, 
carrier agrees to cover the shipment with a carrier-provided 
tarpaulin. Protective tarping is an accessorial service.
    d. Carriers approved to transport DOD hazardous materials 
requiring TPS agree to comply with all shipment requirements 
contained in paragraph 9 of the Agreement Between the Military 
Traffic Management Command and Motor Common Carriers Governing the 
Transportation of Shipments Which Require a Transportation 
Protective Service (TPS) for and on behalf of the U.S. Department of 
Defense.
    11. Documentation. a. The carrier agrees to accept GBLs on which 
freight charges will be paid by the Government, and bound by all 
terms stated on the Standard Form (SF)-1103, GBL, regardless of the 
type of bill of lading tendered.
    b. The carrier will comply with the documentation prelodge 
procedures in effect at Military Ocean Terminals or the 
installation, when cargo is consigned for further movement overseas. 
(Prelodging is the submission of advance shipment documents which 
identifies the shipment to the Military Ocean Terminal prior to 
delivery of the cargo at the terminal.) Instructions will be 
provided by the consignor to furnish certain data at least 24-hours 
in advance of cargo delivery to the terminal.
    12. Loss or Damage. The carrier agrees to be liable for loss or 
damage to cargo in accordance with the provisions of 49 U.S.C. 11707 
(the Carmack Amendment to the Interstate Commerce Act.) Carrier 
agrees to promptly settle uncontested claims for loss or damage.
    13. Standard Tender of Service. a. The carrier agrees to comply 
with the preparation and filing instructions in applicable freight 
traffic rules publications issued by MTMC. Carrier understands that 
MTMC will reject tenders not in compliance with these instructions.
    b. Carrier agrees to provide a street address where the company 
office is located in lieu of post office box number. Carrier agrees 
to provide the address prior to or in conjunction

[[Page 33414]]

with submission of any tenders or other rate schedules. The carrier 
agrees to also advise MTMC of any change in address prior to the 
effective date of the change. Failure to do so is grounds to 
discontinue use of the carriers.
    c. Carrier understands that tenders inadvertently accepted and 
distributed for use and not in compliance with this agreement, the 
provisions contained in the Standard Tender of Freight Services (MT 
Form 364-R), or the application MNC Freight Traffic Rules 
Publication, and supplements thereof, will be subject to immediate 
removal or non-use until corrections are made. The issuing carrier 
will be advised when tenders are removed under these circumstances.
    14. Rates. a. Carrier agrees to transport shipments at the 
lowest tender rate specifically applicable to the department or 
agency involved.
    b. The carrier's rates must be on file with MTMC, HQ Eastern 
Area, ATTN: MTE-IN, Bayonne, New Jersey 07002-5302. The carrier must 
publish all rates, charges, and accessorial services on a 
``Department of Defense Standard Tender of Freight Services'' MT 
Form 364-R and must comply with the tender preparation instructions. 
(Only services annotated with a charge in the tender will be paid by 
the shipper.)
    15. Carrier Performance. Carrier agrees that carrier's 
equipment, performance and status of service will conform with its 
obligations under Federal, State and local law and regulation as 
well as with the guidelines found in the Defense Traffic Management 
Regulation (DTMR) and this Agreement. The carrier fully understands 
its obligation to remain current in its knowledge of service 
standards. The carrier accepts the Government's right to revoke 
approval, declare ineligible, non-use, or disqualify the carrier for 
unsatisfactory service for any operating deficiency, noncompliance 
with the terms of this Agreement or terms of any negotiated 
agreements, tariffs, tenders, bills of lading or similar 
arrangements determining the relationship of the parties, or for the 
publication of unreasonable rates, charges, rules, descriptions, 
classifications, practices, or other unreasonable provisions of 
tariffs/tenders. Rules governing the Carrier Performance Program are 
found in MTMC Regulation 15-1, and Army Regulations 55-355 DTMR. If 
a carrier is removed or disqualified for 6 months or more, it will 
have to be re-qualified.
    16. General Provisions. The carrier must possess a valid 
Standard Carrier Alpha Code (SCAC). When a company holding the 
appropriate authority has operating divisions, each with its own 
unique SCAC, each such division is required to execute a separate 
agreement with MTMC governing the transportation of protected 
commodities.
    17. Terms of the Agreement. a. The terms of this Agreement will 
be applicable to each shipment.
    b. This agreement shall be effective from the date of approval 
by MTMC, until terminated. Termination is effective upon receipt of 
written notice by either party.
    c. Nothing in this Agreement will be construed as a guarantee, 
by the Government, of any particular volume of traffic.
    d. The carrier agrees to immediately notify MTMC of any changes 
in ownership, in affiliations, executive officers, and/or board 
members, and carrier name. Carrier understands that failure to 
notify MTMC shall be grounds for immediate revocation of the 
carrier's approval and their participation in the movement of DOD 
freight.
    18. Additional Specialized Requirements. The terms of this 
Agreement will not prevent different or additional requirements with 
respect to negotiated agreements or added requirements for other 
types of service and/or commodities.
    19. Inquiries. Inquiries may be referred to: Commander, MTMC, 
Attn: MTOP-QQ, Falls Church, Virginia 22041-5050.
    20. Carrier Acknowledgment and Acceptance. The certifying 
carrier official agrees to ensure that the appropriate company 
officials and employees are familiar with the requirements, terms 
and conditions of this Agreement and are in full compliance with the 
applicable provisions herein. Any information found to be falsely 
represented in the Motor Carrier Qualification Form, the attachments 
or during the qualification procedures, to include additional 
requirements of this Agreement, shall be grounds for automatic 
revocation of this Agreement and immediate non-use of the carrier, 
the affiliated companies, division and entities, I, 
________________________________________, verify under penalty of 
perjury under the laws of the United States of America, that the 
information contained in the carrier qualification application 
packet and this Agreement is true, correct and complete. If 
representing a company or organization, I certify that I am 
qualified and authorized to offer this information. I know that 
willful misstatements or omissions of material facts constitute 
Federal criminal violations punishable under 18 U.S.C. 1001 by up to 
5 years imprisonment and fines up to $10,000 for each offense, or 
punishable as perjury under 18 U.S.C. 1621 by fines up to $2,000 or 
imprisonment up to 5 years for each offense. Further, I understand 
the requirements of this Agreement and on behalf of: 
________________________________________ (Typed Name of Carrier and 
MC Number) agree to comply with the terms and conditions contained 
herein.

----------------------------------------------------------------------
(Signature of Carrier Official and Title)

Signature of Agent Official and Title:

----------------------------------------------------------------------

----------------------------------------------------------------------

Date:------------------------------------------------------------------

Address:---------------------------------------------------------------

Telephone Number: (________________)-----------------------------------

24-Hr Emergency Number:------------------------------------------------
(________________)

Interstate Operating Authority Certificate Number--MC:-----------------

Intrastate Operating Authority:----------------------------------------

Certificate Number(s) Include:-----------------------------------------

Issuing State--For Example:--------------------------------------------

PA--#12345
Military Traffic Management Command Acknowledgment/Acceptance

Signature and Title:

----------------------------------------------------------------------

Date Approved:---------------------------------------------------------
Gregory D. Showalter,
Army Federal Register Liaison Officer.
[FR Doc. 96-16147 Filed 6-26-96; 8:45 am]
BILLING CODE 3710-08-M