The July 29, 2009, Federal Register Notice of The Department of Defense’s (DoD) interim final rule implementing Section 884 of last year’s Defense Acquisition Act, which requires pass through of any government paid fuel surcharge to the person actually purchasing the fuel.  The rule is actually a required Federal Acquisition Regulation (FAR) contract clause to be included in all DoD solicitations and contracts for carriage in which a motor carrier, broker or freight forwarder will provide or arrange for truck transportation services that provide for a “fuel related adjustment.” DoD is soliciting public comment, to be submitted on or before September 28, 2009, but in the meantime, the rule became effective on July 29, 2009.

The text of the rule is quite short and paraphrases the language of the statute, as follows:

(a)    The Contractor shall pass through any motor carrier fuel-related surcharge adjustments to the person, corporation or entity that directly bears the cost of fuel for shipment(s) transported under this contract.

(b)   The Contractor shall insert the substance of this clause, including this paragraph (b), in all subcontracts with motor carriers, brokers or freight forwarders.

The much longer and more complicated language in the draft circulated this spring by SDDC to TIA for comment prior to publication would have required disclosure of the amount of the surcharge on every shipment, prescribed payment terms and imposed complex allocation and accounting on loads carried by more than one carrier.  The TIA Government Freight Committee put together a letter that TIA sent to SDDC objecting to the draft language as unworkable and unsupported by the statute.  It appears that the letter had the desired effect: all of the offending language has been dropped from the interim rule.