PART 243—DEPARTMENT OF DEFENSE RATEMAKING PROCEDURES FOR CIVIL RESERVE AIR FLEET CONTRACTS Authority: Section 366 National Defense Authorization Act for FY12 (Pub. L. 112-81) 10 U.S.C. Chap 931, Section 9511a. Source: 80 FR 30358, May 28, 2015, unless otherwise noted. § 243.1 Purpose. The Secretary of Defense (Secretary) is required to determine a fair and reasonable rate of payment for airlift services provided to the Department of Defense (DoD) by civil air carriers and operators (hereinafter collectively referred to as “air carriers”) who are participants in the Civil Reserve Air Fleet program (CRAF). This regulation provides the authority and methodology for such ratemaking and designates the United Stated Transportation Command (USTRANSCOM) as the rate setter for negotiated uniform rates for DoD airlift service contracts in support of the CRAF. This methodology supports a viable CRAF mobilization base that ensures sufficient capacity in time of war, contingency and humanitarian relief efforts. § 243.2 Applicability. This section governs all contracts with the Department of Defense where awards to the air carriers, either through individual contracts or teaming arrangements, are commensurate with the relative amount of airlift capability committed to the Civil Reserve Air Fleet (CRAF). § 243.3 Definitions. Air carrier. Aircraft class. Civil Reserve Air Fleet International Airlift Services. Civil Reserve Air Fleet (CRAF) Assured Business Guarantees. See Civil Reserve Air Fleet (CRAF) Program. et seq. Historical Costs. Long-range aircraft. Memorandum of Understanding with attachment (MOU). Operational data. Participating carriers. Projected rates. Ratemaking methodologies. Short-range aircraft. § 243.4 Ratemaking procedures for Civil Reserve Air Fleet contracts. The ratemaking procedures contained within this section apply only to Airlift Service contracts awarded based on CRAF commitment. Competitively awarded contracts may be used by the Department of Defense when it considers such contracts to be in the best interest of the government. See §§ 243.5(b) and 243.6 for exclusions to ratemaking. (a) Rates of payment for airlift services. (b) Obtaining data from participating carriers. (c) Analysis. (2) To determine allocation of these costs to USTRANSCOM service, USTRANSCOM considers carrier reported DOT Form 41 operational data, as well as USTRANSCOM S-1, S-2 mileage reports, fuel reports, and other relevant information requested by the contracting officer. (d) Rates. (e) Components of the rate Return on Investment (ROI). (i) Full ROI. (A) Cost-of-Debt (COD). (B) Cost-of-Equity (COE). (C) Owned/Capital/Long-Term Leased Aircraft. (D) Short-term leased aircraft. (E) Working capital. (ii) Minimum Return. (2) Depreciation. (3) Utilization. (4) Cost escalation. (5) Weighting of rate. (6) Obtaining data from participating carriers. (f) Contingency rate. (g) Proposed rate. (h) Final rate. § 243.5 Commitment of aircraft as a business factor. For the purpose of rate making, the average fleet cost of aircraft proposed by the carriers for the forecast year is used. Actual awards to CRAF carriers are based upon the aircraft accepted into the CRAF program. The Secretary may, in determining the quantity of business to be received under an airlift services contract for which the rate of payment is determined in accordance with subsection (a) of 10 U.S.C. 9511a, use as a factor the relative amount of airlift capability committed by each air carrier to the CRAF. (a) Adjustments in commitment to target specific needs of the contract period. (b) Exclusions of categories of business from commitment based awards. § 243.6 Exclusions from the uniform negotiated rate. Domestic CRAF is handled differently than international CRAF in that aircraft committed does not factor into the amount of business awarded during peacetime. If domestic CRAF is activated, carriers will be paid in accordance with pre-negotiated prices that have been determined fair and reasonable, not a uniform rate. § 243.7 Inapplicable provisions of law. An airlift services contract for which the rate of payment is determined in accordance with subsection (a) of 10 U.S.C. 9511a shall not be subject to the provisions of 10 U.S.C. 2306a, or to the provisions of subsections (a) and (b) of 41 U.S.C. 1502. Specifically, contracts establishing rates for services provided by air carriers who are participants in the CRAF program are not subject to the cost or pricing data provision of the Truth in Negotiations Act (10 U.S.C. 2306a) or the Cost Accounting Standards (41 U.S.C. 1502). CRAF carriers will, however, continue to submit data in accordance with the MOU and the DOT, Form 41. § 243.8 Application of FAR cost principles. In establishing fair and reasonable rate of payments for airlift service contracts in support of CRAF, USTRANSCOM, in accordance with10 U.S.C. 9511a, procedures differ from the following provisions of FAR Part 31 and DFARS Part 231, as supplemented: FAR 31.202, Direct Costs FAR 31.203, Indirect Costs FAR 31.205-6, Compensation for Personal Services, subparagraphs (g), (j), and (k) FAR 31.205-10, Cost of Money FAR 31.205-11, Depreciation FAR 31.205-18, Independent Research and Development and Bid and Proposal Costs FAR 31.205-19, Insurance and Indemnification FAR 31.205-26, Material Costs FAR 31.205-40, Special Tooling and Special Test Equipment Costs FAR 31.205-41, Taxes DFARS 231.205-18, Independent research and development and bid and proposal costs § 243.9 Carrier site visits. USTRANSCOM may participate in carrier site visits, as required to determine the reasonableness or verification of cost and pricing data. § 243.10 Disputes. Carriers should first address concerns to the ratemaking team for resolution. Ratemaking issues that are not resolved to the carrier's satisfaction through discussions with the ratemaking team may be directed to the USTRANSCOM contracting officer. § 243.11 Appeals of USTRANSCOM Contracting Officer Decisions regarding rates. If resolution of ratemaking issues cannot be made by the USTRANSCOM contracting officer, concerned parties shall contact the USTRANSCOM Ombudsman appointed to hear and facilitate the resolution of such concerns. In the event a ratemaking issue is not resolved through the ombudsman process, the carrier may request a final agency decision from the Director of Acquisition, USTRANSCOM. § 243.12 Required records retention. The air carrier is required to retain copies of data submitted to support rate determination for a period identified in Subpart 4.7 of the Federal Acquisition Regulation, Contractor Records Retention.