USDA upholds cargo preference in proposed “one-step” bid for food aid

USDA upholds cargo preference in proposed “one-step” bid for food aid

USDA upholds cargo preference in proposed “one-step” bid for food aid

   The U.S. Department of Agriculture’s Commodity Credit Corp. (CCC) said it would comply with U.S.-flag vessel obligations in its proposed “one-step” food aid bid evaluations.
   “CCC will, of course, comply with cargo preference requirements,” the agency said in a Federal Register notice published today to clarify an earlier notice released by the agency. The nation’s cargo preference rules are outlined in the 1936 Merchant Marine Act.
   CCC buys agricultural commodities for donation overseas under various food aid authorities, including P.L. 480 Title II, Food for Progress and the McGovern-Dole International Food for Education and Child Nutrition programs.
   On Dec. 16, the CCC proposed a one-step bid evaluation process for these purchases that would analyze actual freight offers together with commodity offers to “arrive at the lowest landed cost.”
   The agency said the proposed rules still “specify that the lowest landed cost will be calculated on the basis of U.S. flag rates and service for that portion of the commodities purchased that CCC determines is necessary and practicable to meet cargo preference requirements.”
   The agency also noted that its proposed rules include an exception to the lowest landed cost objective when “extenuating circumstances,” such as meeting an urgent humanitarian need, justify using vessel services other than single voyage contracts or F.O.B. (free on board) or F.A.S. (free alongside ship) vessel delivery terms. “In such cases there would be no separate vessel offers to match with commodity offers,” the CCC said.
   The agency has extended its comment deadline for the proposed rulemaking from March 9 to May 8. The CCC said it welcomes feedback from all participants in international food aid transactions, such as ocean carriers, commodity suppliers, ports, railroads, and private voluntary organizations.
   For more information, contact USDA’s Richard Chavez by telephone at (202) 690-0194, or e-mail at Richard.Chavez@USDA.gov.