AMC flags cargo-preference waiver

AMC flags cargo-preference waiver

WASHINGTON -- The American Maritime Congress is worried that a proposal by two government boards to waive cargo-preference requirements would seriously undermine efforts to keep the U.S.-flag fleet in business.

The Civilian Agency Acquisition Council and the Defense Department Defense Acquisition Regulation Council issued proposed rules that would allow federal agencies to waive cargo preferences for subcontractors that wanted to ship "commercially available off-the-shelf" (COTS) items valued at $100,000 or less.

AMC President Gloria Cataneo Tosi said that the organization has been fighting the proposed waiver since the Federal Acquisition and Streamlining Act passed 10 years ago. AMC thought it had an agreement with the White House Office of Management and Budget to keep cargo preference laws off the list of statutes that the streamlining law could exempt.

"We were dumbfounded," when the proposed rules came out last year, Tosi said. "You could call almost anything an off-the-shelf product, from Budweiser to helicopters."

The cargo-preference laws require federal agencies and the military to ship cargo U.S.-flag vessels whenever possible. Tosi said that the danger is that U.S. suppliers could seek transportation from foreign-flag carriers for virtually any finished goods.

If the U.S. Agency for International Development bought cars or trucks from a U.S. maker for use in a foreign country, the manufacturer could use foreign-flag vessels for transportation.

Tosi warned that if the waivers were allowed, the U.S. shipping industry "would be on that awful slippery slope. You would see ships flagging out."