C-TPAT Third Party Validation Pilot in China to Start on Approximately May 1, 2007

The procurement notice also seeks applications by April 30, 2007 from firms wishing to act as "Third Party" Validators for C-TPAT importers that buy over 75% of their imports from China (See procurement notice for details.)

About 300 C-TPAT Importers Can Volunteer to be Selected for Pilot

CBP states that about 300 C-TPAT importers are eligible to volunteer for this pilot:

1. C-TPAT importers that source 100% of their imports from China, and

(CBP notes that these 55 are currently only eligible for Tier 1 C-TPAT benefits, as the Chinese government does not allow CBP Supply Chain Security Specialists to perform validations. Upon the completion of their validation, these 55 will have the potential to be granted Tier 2 or Tier 3 Status.)

1. additional C-TPAT importers that source over 75% of their imports from China.

Those Volunteers Selected by CBP to Choose One of Several 3rd Party Validators

CBP will be contacting these 300 importers to offer them the opportunity to participate in this voluntary pilot. The volunteers selected will be given written notification and the contact information for the three or four Third Party Validators CBP has selected to participate.

The C-TPAT importer will then be required to choose one of these Third Party Validators to conduct the foreign portion of their C-TPAT validation within 30 days to initiate the validation process. CBP states it will determine the facilities to be visited, both domestic and abroad, including the point of stuffing, drayage of the container to the port of export, and the port of export. In addition, CBP will retain all decisions over the C-TPAT status of the importer.

(Only one Third Party Validator can be used by a C-TPAT importer, and there can be no conflicts of interest. In addition, the C-TPAT importer must agree to pay all costs associated with the validation. All contracts that are entered into by the Third Party Validator and the C-TPAT importer must be exclusively between the two parties and without government intervention.)

CBP to Submit Report After Completion of Pilot Program

CBP states that it will submit a report to the appropriate congressional and advisory committees no later than 30 days after the completion of the pilot program. The report will include the results of the pilot, the cost and efficiency of the validations, the impact on the rate of validations conducted under C-TPAT, recommendations by CBP based on the results of the pilot, etc.

Pilot Required by the SAFE Port Act

According to the "Security and Accountability for Every Port Act of 2006" (SAFE Port Act, Public Law (P.L. 109-347)), CBP is required to develop this one-year voluntary pilot program to assess the feasibility, costs, and benefits of using third party entities to conduct validations of C-TPAT participants.

All application material and questions must be sent via email to cbp.contractor@dhs.gov

Federal Business Opportunities announcement, developed by CBP in consultation with COAC, (Reference Number C-TPAT-2007, posted March 27, 2007; modified March 28, 2007) available at http://www.fbo.gov/spg/DHS/USCS/PDDC20229/Reference%2DNumber%2DC%2DTPAT%2D2007/listing.html

FBO-posted Standard Operating Procedures for CBP's Third Party Validation Pilot Program (dated April 2007) alsoavailable at http://www.fbo.gov/spg/DHS/USCS/PDDC20229/Reference%2DNumber%2DC%2DTPAT%2D2007/listing.html

BP Notes

C-TPAT Tier 1 status indicates certification, Tier 2 status indicates validation, and Tier 3 status indicates validation and the exhibition of "best practices." (See ITT's Online Archives or 03/16/06 news, 06031605 for BP summary of CBP document on these three tiers, etc.)

(Also note that in January 2007, American Shipper reported that 216 C-TPAT Participants had achieved "Tier 3" Status as of November 2006. See ITT's Online Archives or 01/05/07 news, 07010599 2 for summary.)