
[Federal Register Volume 77, Number 190 (Monday, October 1, 2012)]
[Rules and Regulations]
[Pages 59793-59818]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-23789]


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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.

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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.

[[Page 59794]]

    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. Sec.  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. Sec.  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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    \1\ Executive 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.
    \2\ Section 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
    (5) The Secretary of Commerce for all other materials, services, 
and facilities, including construction materials.

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[[Page 59795]]

    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.
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    \3\ The 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.
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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. Sec.  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. 
Sec.  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. Sec.  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. Sec.  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;

[[Page 59796]]

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 Sec.  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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    \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.

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[[Page 59797]]

    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.
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    \6\ Legislative 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.
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    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

[[Page 59798]]

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.
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    \7\ CRAF 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.
---------------------------------------------------------------------------

    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. 
Sec.  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.

[[Page 59799]]

    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 Sec.  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:

[[Page 59800]]

(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.

[[Page 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. Sec. Sec.  2061-2171; 50 U.S.C. App Sec.  
468; Executive Order 12742, (56 FR 1079, January 8, 1991); Executive 
Order 13603, (77 FR 16651, March 16, 2012).

Subpart A--General


Sec.  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.


Sec.  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;

[[Page 59802]]

    (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.


Sec.  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


Sec.  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. Sec.  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 non-
military 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

[[Page 59803]]

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 Sec.  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. Sec.  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


Sec.  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).


Sec.  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

[[Page 59804]]

precedence over unrated orders. All DX-rated 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 Sec.  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 Sec.  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.


Sec.  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 time-to-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 Sec.  33.33] hours from receipt of the order, in 
accordance with Sec.  33.33(e) of the Transportation Priorities and 
Allocations System regulation at 49 CFR Part 33.


Sec.  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 DO-rated 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 DX-rated 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

[[Page 59805]]

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 Sec.  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.


Sec.  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 DO-rated 
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 Sec. Sec.  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 Sec. Sec.  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 Sec.  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 Sec.  
33.37(b).


Sec.  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.


Sec.  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 Sec.  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.


Sec.  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).

[[Page 59806]]

    (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 Sec.  
33.32, are included on the order with the statement required in Sec.  
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 Sec.  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 Sec.  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.


Sec.  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 Sec.  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 Sec.  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


Sec.  33.40  General provisions.

    (a) TPAS is designed to be largely self-executing. 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.


Sec.  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

[[Page 59807]]

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.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  33.45  Assistance programs with other nations. [Reserved]

Subpart E--Allocation Actions


Sec.  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.


Sec.  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);

[[Page 59808]]

    (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.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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


Sec.  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.


Sec.  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 Sec.  33.41.


Sec.  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.


Sec.  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


Sec.  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

[[Page 59809]]

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.


Sec.  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 electronically-stored 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.


Sec.  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.


Sec.  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

[[Page 59810]]

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.


Sec.  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.


Sec.  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


Sec.  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 Sec.  
33.81.)


Sec.  33.81  Appeals.

    (a) Any person who has had a request for adjustment or exception 
denied by the Defense Production Act Activities Coordinator under Sec.  
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

[[Page 59811]]

with a statement of the reasons for the decision.

Subpart I--Miscellaneous Provisions


Sec.  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.


Sec.  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 Sec.  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.


Sec.  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.


Sec.  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.
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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


