This part summarizes the procedures governing the award and administration of agency agreements in the form of Service Agreements and Ship Manager Contracts entered into between the United States of America, acting by and through the Maritime Administration (MARAD), Department of Transportation. Persons awarded agency agreements will manage or otherwise conduct the business of one or more vessels owned, controlled or time-chartered by the United States, which vessel(s) may be assigned from time to time pursuant to the specific provisions of their general agency agreement as a service provider pro hac vice, or as a ship manager pursuant to the terms of a Ship Manager Contract.

(a) Agent includes a General Agent, Berth Agent, or Ship Manager, designated as such under a Service Agreement or Ship Manager Contract to manage and conduct the business of vessels which the United States is owner, pro hac vice, or time charterer.

(b) Citizen of the United States means a person (including receivers, trustees and successors or assignees of such persons as provided in 46 U.S.C. 50502), including any person (stockholder, partner or other entity) who has a controlling interest in such person, any person whose stock or equity is being relied upon to establish the requisite U. S. citizen ownership, and any parent corporation, partnership or other entity of such person at all tiers of ownership, who, in both form and substance at each tier of ownership, satisfies the following requirements:

(1) An individual who is a Citizen of the United States, by birth, naturalization or as otherwise authorized by law;

(2) A corporation organized under the laws of the United States or of a State, the controlling interest of which is owned by and vested in citizens of the United States and whose chief executive officer, by whatever title, chairman of the board of directors and all officers authorized to act in the absence or disability of such persons are citizens of the United States, and no more of its directors than a minority of the number necessary to constitute a quorum are noncitizens;

(3) A partnership organized under the laws of the United States or of a State, if all general partners are citizens of the United States and a controlling interest in the partnership is owned by citizens of the United States;

(4) An association organized under the laws of the United States or of a State, whose chief executive officer, by whatever title, chairman of the board of directors (or equivalent committee or body) and all officers authorized to act in their absence or disability are citizens of the United States, no more than a minority of the number of its directors, or equivalent, necessary to constitute a quorum are noncitizens, and a controlling interest in which is vested in citizens of the United States; and

(5) A joint venture, if it is not determined by the Maritime Administrator to be in effect an association or partnership, which is organized under the laws of the United States or of a State, if each co-venturer is a citizen of the United States. If a joint venture is in effect an association, it will be treated as is an association under paragraph (a)(4) of this section, or, if it is in effect a partnership, will be treated as is a partnership under paragraph (a)(3) of this section.

(b) General agency agreement means the agreement developed to ensure the availability of qualified and eligible general agents.

(c) NDRF means National Defense Reserve Fleet site.

(d) Ship manager contract means the agreement developed to establish roles and responsibilities for managing vessels owned by MARAD.

(e) United States means the States of the United States, Guam, Puerto Rico, the Virgin Islands, American Samoa, the District of Columbia, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the United States.

(a) Eligibility. The appointment as Agent is restricted to qualified applicants. Each applicant must establish eligibility according to MARAD procedures and meet the following criteria:

(1) Be a Citizen of the United States, as defined in section 315.3(b) of this part;

(2) Demonstrate the necessary ability, experience, and resources as an operator of vessels or ports, or shoreside husbander of vessels; and

(3) Continue to meet all such requirements throughout the term of the appointment.

(b) Procedures. Information about general agency agreements for appointment as General Agent, Berth Agent, or Ship Manager Contracts may be obtained from, along with inquiries and other written communications submitted to, the Maritime Administration, Attn: Sealift Operations, Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590, (202) 366-1943.

(c) Approval. After final approval of an Agent, the contracting office will transmit the applicable General Agency Agreement or Ship Manager Contract to the applicant for execution and return to MARAD.

The eligibility requirements of section 315.5(a) do not apply to a contractor managing vessels owned by the United States under a contract or contracts previously awarded by another federal agency if the contract, and the vessels managed under such contract, are subsequently transferred to MARAD, provided the period of performance of the transferred contract does not exceed the period of performance of the original contract, including options.

(a) Amendments. MARAD will make conforming amendments to all service agreements and ship manager contracts that are required due to changes in the Federal Acquisition Regulation or Transportation Acquisition Regulation.

(b) Annual review of general agent representations and certifications. General agents must certify annually that all representations and certifications incorporated in a general agency agreement are current, complete, and accurate, or provide new representations and certifications.

The agent must perform all duties prescribed in the service agreement or ship manager contract, as such agreement is applicable, and must follow directions, orders, or regulations issued by MARAD.

When an agent is responsible as vessel operator to decommission and deliver a vessel to the NDRF, that agent must observe all the terms, procedures, and requirements prescribed by MARAD.

(a) Insurer. MARAD will be responsible for providing or obtaining P&I insurance for all vessels assigned to Agents under an agreement. At its election, MARAD may be a self-insurer of any one or more vessels covered by an agreement or MARAD may obtain P&I insurance coverage under one or more policies written by underwriters of marine insurance. MARAD will determine the amount of coverage to be provided or obtained.

(b) Insureds. The United States of America, acting by and through MARAD, Department of Transportation, and its Agents (including Agents' employees as sub-agents). Sub-agents may be insureds only as expressly provided in the agreement. Independent contractors of the Agents are not insureds.

(c) Reports of accidents and occurrences. The Agent must report every accident or occurrence of a P&I nature promptly to both MARAD and the contracting officer named in the agreement. If MARAD has obtained P&I insurance through a marine insurance underwriter, the Agent also must concurrently file a report of such accident or occurrence with the underwriter. MARAD will disclose full details as the identity of such underwriter to the Agent.

(d) Report of claims. The Agent must submit a quarterly report of all claims of a P&I nature to MARAD. The report must contain all relevant information, e.g., the names of the vessels and of the claimant, the date of the injury or occurrence, the amount claimed, the basis for any payments already disbursed on behalf of the United States, estimated future costs, and an evaluation of the claim of the merits.

(e) Settlement of claims. After ascertaining from MARAD the availability of funds, the Agent is authorized to settle individual claims of a P&I insurance nature that do not exceed $5,000.

(1) For a settlement more than $5,000, the Agent must obtain MARAD's prior approval. If MARAD has placed the P&I insurance with an insurance underwriter, the Agent must obtain the prior approval of the underwriter to settle claims.

(2) The amount of individual claims that do not exceed the Agent's limit for settlement will be chargeable by the Agent to the vessel expense and must be accounted for in accordance with current MARAD accounting instructions.

(3) When settling any such claim, the Agent must advise the claimant that such settlement will be accounted for in accordance with current accounting instructions and must also advise the claimant that such settlement is not to be construed as an admission of liability by or on behalf of the United States, the Agent, or any other person.

(4) The Agent must apply sound judgment and follow standard practices of vessel operators in the settlement or other disposition of such P&I insurance claims, and must settle such claims only when the settlement is adequately supported by all the facts and circumstances and is in the best interest of the United States.

(f) Litigation. (1) If a court suit of a P&I nature is filed which arises out of the activities of the Agent under its Agreement, wherein the Agent is named as the party defendant or one of the parties' defendant irrespective of whether the risk is covered by P&I insurance, the Agent must immediately forward copies of the pleading and all other related legal documents, by first class mail, to the Chief Counsel, Maritime Administration, Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590, and to the Attorney General, Attn: Civil Division, Torts Branch, Department of Justice, Washington, DC 20530. No agent or authorized subagent will incur any legal expenses in connection with any claim of a P&I nature, unless approved in advance by MARAD and by the underwriter, where applicable. However, the Agent may incur legal expenses if the mission of the vessel will be frustrated or impeded and/or time will not permit such prior approval.

(2) In the event of any attachment or seizure of a vessel, whether or not the risk is of a P&I nature, the Agent must immediately notify MARAD.