NACO GUIDANCE #9. Procedures for Processing an Unsolicited Offer of a Boat to the Coast Guard Auxiliary for Use as an Operational Facility

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1 1 NACO GUIDANCE #9 Procedures for Processing an Unsolicited Offer of a Boat to the Coast Guard Auxiliary for Use as an Operational Facility Introduction This NACO Guidance details the procedure mandated by COMDTINST M (series) (the Auxiliary Manual), COMDTINST M (series), (the Auxiliary Operations Policy Manual), and federal law to process an unsolicited offer to the Auxiliary, or a specific unit of the Auxiliary, of a boat to be put into service as an Operational Facility (OPFAC). This Guidance also takes into account the current policies and practices of the U.S. Coast Guard as they relate to the processing and payment of third party claims for personal injury and damage to property, and Auxiliary unit claims for damage to unit owned facilities. Compliance with these procedures will assure adherence to those policies and expedite securing the requisite authorizations to accept the boat. Failure to comply can result in substantial delay or denial of authorization and the loss of a valuable Auxiliary asset. Non-federal sources include the Coast Guard Auxiliary Association, Inc. ( the Association ) and the Coast Guard Foundation, ( the Foundation ), private individuals, and corporate and noncorporate entities. When a boat is received from the Association or the Foundation, those entities are deemed to be the donor even though the boat was obtained from other sources. Auxiliary Point of Contact When the donor is the Association or the Foundation, the NACO 1 will always be the initial point of contact with the Auxiliary regardless of the value of the boat or any conditions placed on the donation by the boat s owner. The sole point of contact between the Auxiliary and Association or the Foundation will always be the NACO or designee. Disposition after Use or Loss When a donated boat has a fair market value equal to or greater than $ (Fifty Thousand and 00/100 Dollars), the documents transferring ownership of the boat to the Auxiliary will provide that when the boat is no longer serviceable or the Auxiliary no longer has a use for the boat, it will be transferred to the Foundation or to the Association for disposal. Any net funds remaining from the disposal of the boat and any insurance proceeds received as a result of the loss or destruction of the boat but not spent to repair the boat will be transferred to the Association to be used exclusively in support of authorized Auxiliary programs. If, as a condition of the donation, the original donor of the boat specified that the funds were to be otherwise utilized, the net funds realized from the disposal of the boat or the proceeds of an insurance settlement for a destroyed or lost boat, if any, will be utilized in accordance with those directions. 1 References to the NACO also refer to the NACO s designee except for those actions requiring the NACO s exercise of discretion.

2 2 Fair Market Value The fair market value of the boat will be the average retail price stated in a current edition of any nationally recognized guide to used boat values or the value placed on the boat by a licensed marine surveyor. Insurance The unit that will receive the boat must have in place hull and salvage insurance in an amount equal to or greater than her fair market value before the boat will be accepted by the Auxiliary. Transmission of Documents All documents and notices required to be transmitted may be scanned and electronically transmitted by or facsimile reproduction except the original document(s) effecting transfer of the boat and letters of thanks to the donor which will be sent by regular mail. PROCEDURES 1. A member of the Auxiliary contacted by a prospective donor will obtain the donor s contact information, promptly provide the member s District Commodore with that information and the nature of the offer, and advise the donor that a representative of the Auxiliary will be in contact with the donor. 2. The DCO will promptly provide the NACO with all available information regarding the offer. 3. The NACO will promptly contact the donor and request the donor to make the offer in writing using Template A. The following information should be provided 2 : A. The fact that the donor is offering the boat to the Auxiliary B. A brief description of the legal status of the donor (e.g. private individual, sole proprietorship, corporation, partnership, local government, etc.) C. A brief description of the boat including her make, model, length, date of manufacture, means of propulsion, HIN, registration or documentation number, if any, and her condition D. The estimated value of the boat E. Any conditions attached to the gift of the boat 4. The NACO will determine the appropriate Auxiliary gift acceptance authority in accordance with the following: A. i. If the fair market value of the boat is equal to or greater than $50,000.00, (Fifty Thousand and 00/100 Dollars) or if the donor has not designated a specific Auxiliary unit to receive the boat as a condition of the donation, the 2 A copy of template A Donor s Offer to the Auxiliary should be provided to the donor with a request that it be completed and returned to the NACO or the NACO s designee.

3 3 NACO will be the Auxiliary gift acceptance authority. In processing the offer the procedures outlined in 5 will be followed. ii. If the fair market value of the boat is less than $50, and the donor has not designated a particular unit to receive the boat, the NACO will be the Auxiliary gift acceptance authority, but if deemed more appropriate by the NACO, the NACO may refer the offer to the DCO of the district which the NACO has determined should receive the donation. The DCO shall then become the Auxiliary gift acceptance authority. In processing the offer, the procedures outlined in 6 shall be followed. B. If the donor has designated a unit to receive the boat and the fair market value of the boat is more than $5, (Five Thousand and 00/100 Dollars) but less than $50, (Fifty Thousand and 00/100 Dollars), the DCO of the unit designated by the donor to receive the boat will be the Auxiliary gift acceptance authority. In processing the offer, the procedures outlined in 6 will be followed. C. If the fair market value of the boat is below $5, (Five Thousand and 00/100 Dollars), the DCO of the district designated to receive the boat will act as the Auxiliary gift acceptance authority for boats offered by a donor to a district, division, or flotilla. Acceptance of such offers will not be made without first notifying the Director and obtaining written advice and guidance from the DSO-LP. In processing the offer, the procedures outlined in 6 will be followed. 5. If the NACO is the Auxiliary Gift Acceptance Authority the following procedures shall be followed: A. The NACO will inform the appropriate DCO(s) of the availability of the boat and provide all available information regarding the boat including Template A. B. The DCO(s) will advise the NACO of their interest in receiving the boat. If more than one district wants the boat, the NACO will determine which district will be given the opportunity to receive the boat. The appropriate DCO will determine which unit within the district should receive the boat 3. C. At a regular or special meeting of the designated unit(s), a vote will be taken on whether or not to accept the boat. In order to be eligible to receive the boat, the unit must agree by a simple majority of those present and voting that it is able to and will safely operate, maintain, insure, and store the boat year round. The unit will then inform the DCO in writing through the COLM of the result of its vote and in addition, will forward to the DCO an executed agreement in the form provided by Template B. 3 If the donor is the Association or Foundation, the donor will be notified of the unit selected to receive the donation.

4 4 D. If the unit votes not to accept the boat, the DCO will so notify the NACO in writing. The NACO may then select a different district to receive the boat or notify the prospective donor in writing that the donation will not be accepted. 4 E. If the unit votes to accept the boat, the DCO will forward to the appropriate Director of Auxiliary in writing: i. All available information regarding the boat ii. The donor s offer of the boat (Template A ) iii. The designated unit s decision to accept the boat iv. The DCO s acceptance recommendation v. The Unit s executed Template B vi. Any other relevant information F. The DIRAUX will consider factors i thorough iv below and advise the DCO in writing whether the donation should be accepted or rejected or whether outstanding concerns should be resolved before the donation is accepted 5 : i. That the gift supports an authorized Auxiliary program and from which the Auxiliary unit will receive timely benefit ii. That the unit is able to safely operate, maintain, insure, and store the boat over time iii. That the gift is appropriate in terms of the Coast Guard s core values iv. That the Order Issuing Authority has been consulted and agrees that the boat will be a useful addition to the assets of the AOR G. The DCO will forward to the NACO: i. The unit s written decision to accept the boat ii. The DCO s acceptance or rejection recommendation iii. The original signed Template B iv. The DIRAUX Letter of Endorsement (Template C or other format) H. The NACO will provide the entire information package to the ANACO-CC for a prohibited source determination, if required 6, and for such additional advice and guidance as deemed appropriate by the ANACO-CC. If the donor is the Association or the Foundation, the donor will be notified by the NACO that the cognizant DCO and Director have recommended acceptance of the boat. 4 If the donor is the Association or Foundation, the donor will be notified by the NACO which unit has ultimately decided to accept the donation. 5 Template C may be utilized for convenience or the DIRAUX may use an appropriate alternative format. 6 Neither the Association nor the Foundation is a prohibited source, so a prohibited source determination is not required. Nonetheless, the ANACO-CC should provide the NACO with such advice and guidance as deemed appropriate.

5 5 I. The ANACO-CC will conduct a prohibited source determination if required and will provide the determination to the NACO with such additional advice and guidance as deemed appropriate. J. The NACO will provide the Chief Director awareness of the pending donation by forwarding: 7 i. The donor s offer of the boat (Template A ) ii. All documents received from the DCO iii. The ANACO-CC s prohibited source determination and additional advice and guidance, if any iv. The NACO s acceptance recommendation K. The CHDIRAUX will advise the NACO in writing whether the donation should be accepted or rejected or whether outstanding concerns should be resolved before the donation is accepted. L. The NACO will inform the donor and the appropriate DCO that the offer is being accepted or rejected or that outstanding concerns must be resolved. M. If the boat is being accepted, the ANACO-CC will prepare the document(s) necessary to transfer ownership to the designated Auxiliary unit. N. The appropriate DSO-LP will provide advice and guidance to the unit regarding hull and salvage insurance, whether or not to obtain liability insurance 8, and compliance with the marking and operation of the boat in accordance with the requirements of COMDTINST M (series) (CG Auxiliary Operations Policy Manual), the Auxiliary Manual, and any other applicable Commandant s Instructions or federal law. O. The unit receiving the boat will provide the NACO proof of satisfactory insurance coverage in the form of the declarations page of the insurance policy before the boat will be accepted for transfer to the Unit. P. The NACO will accept the transfer on behalf of the designated Auxiliary unit by executing three duplicate originals of the transfer document. One duplicate original will be transmitted to the Unit; one will be transmitted to the ANACO-CC. One will be returned to the donor. 7 If the donor is the Foundation or Association, the NACO will inform the donor that the CHIDAURAX has been advised of the NACO s recommendation. 8 Boats belonging to units of the Coast Guard Auxiliary are deemed at all times to be assigned to Coast Guard duty and are also deemed at all times to be public vessels of the United States (COMDTINST M E Chapter 1 subsection F.9). (See also 14 U.S.C. 827). As a matter of policy, due to budgetary constraints, the Coast Guard Legal Service Command would not settle a claim for damage to an Auxiliary Unit owned operational facility even if damaged while engaged in an authorized Auxiliary activity. The Coast Guard District in which the boat is being used is authorized to expend Coast Guard Auxiliary operational funds to repair the vessel but is not obligated to do so.

6 6 Q. After consultation with the ANACO-CC, the NACO will provide written acknowledgement of the gift with thanks to the source. If the donor is the Association or the Foundation, the written acknowledgment will be sent to them. The written acknowledgement will include mention of the gift s description, its value, and the receiving Auxiliary unit. 6. If the District Commodore is the Designated Auxiliary Gift Acceptance Authority: A. The DCO will determine which unit is interested in receiving the boat. If more than one unit within the district is interested in receiving the boat, the DCO will determine which unit will receive it if acceptance is authorized. B. The DCO will provide the designated unit with all pertinent information regarding the boat obtained from the NACO or elsewhere. C. At a regular or special meeting of the designated unit(s), a vote will be taken on whether or not to accept the boat. In order to be eligible to receive the boat, the unit must agree by a simple majority of those present and voting that it is able to and will safely operate, maintain, insure, and store the boat year round. The unit will then inform the DCO in writing through the COLM of the result of its vote, and in addition will forward to the DCO an executed agreement in the form provided by Template B. D. If the designated unit votes not to accept the boat, the DCO will either select another unit to receive the boat or notify the NACO that the offer is being declined. If the district declines the offer, the NACO may either select another district to accept the boat or notify the donor that the offer is not being accepted. 9 E. If the designated unit votes to accept the boat, the DCO will forward to the DSO-LP copies of: i. The donor s offer of the boat (Template A ) ii. All available information regarding the boat iii. The designated unit s decision to accept the boat iv. The DCO s acceptance recommendation v. The Unit s executed Template B F. The DCO will request the DSO-LP to conduct a prohibited source determination, if required 10, and for such additional advice and guidance as deemed appropriate by the DSO-LP. 9 If the donor is the Association or Foundation, the DCO will notify the donor of which unit is accepting the boat. 10 Neither the Association nor the Foundation is a prohibited source. A prohibited source determination is not required if one of those entities is the donor. Nonetheless, the DSO-LP should provide the DCO with such additional advice and guidance as deemed appropriate.

7 7 G. The DSO-LP will conduct the prohibited source determination, if required, and will provide the determination to the DCO, copy to the Area Assistant Chief Counsel with such additional advice and guidance as deemed appropriate. H. Upon receipt of the report of the DSO-LP, the DCO will forward to the DIRAUX: i. All available information regarding the boat ii. A copy of the donor s offer of the boat (Template A ) iii. A copy of the designated unit s decision to accept the boat iv. A copy of the executed Template B v. The DCO s acceptance recommendation vi. The DSO-LP s prohibited source determination, if any, and any additional advice and guidance submitted by the DSO-LP vii. Any other information deemed relevant by the DCO I. The DIRAUX will consider factors i thorough iv below and advise the DCO in writing whether the donation should be accepted or rejected or whether outstanding concerns should be resolved before the donation is accepted. 11 The DIRAUX Letter of Endorsement (Template C or alternative format) should state whether :) 12. i. The gift supports an authorized Auxiliary program and from which the Auxiliary unit will receive timely benefit ii. The unit is able to safely operate, maintain, insure, and store the boat over time iii. The gift is appropriate in terms of the Coast Guard s core values iv. The OIA has been consulted and agrees that the boat will be a useful addition to the assets of the AOR J. The DSO-LP will provide advice to the unit on obtaining hull and salvage insurance 13 and compliance with the marking and operation of the boat as required by COMDTINST M (series) (Auxiliary Operations Policy Manual), the Auxiliary Manual, and any other applicable Commandant s Instructions or federal law. K. The donor, in consultation with the DSO-LP, will prepare the document(s) necessary to transfer ownership to the designated Auxiliary unit. 11 The DIRAUX may determine that the DCO is not the appropriate Auxiliary gift acceptance authority and may then forward the package to the NACO for processing. 12 If the donor is the Association or Foundation, the DCO will notify the donor of the DIRAUX s determination. 13 Boats belonging to units of the Coast Guard Auxiliary are deemed at all times to be assigned to Coast Guard duty and are also deemed at all times to be public vessels of the United States (COMDTINST M E Chapter 1 subsection F.9). (See also 14 U.S.C. 827). As a matter of policy, due to budgetary constraints, the Coast Guard Legal Service Command would not settle a claim for damage to an Auxiliary Unit owned operational facility even if damaged while engaged in an authorized Auxiliary activity. However, the Coast Guard District in which the boat is being used is authorized to expend Coast Guard Auxiliary operational funds to repair the vessel but is not obligated to do so.

8 8 L. The DCO will accept the transfer on behalf of the designated Auxiliary unit by executing three duplicate original transfer document(s). One duplicate will be forwarded to the unit receiving the boat; one will be forwarded to the DSO-LP. One will be returned to the donor. M. After consultation with the DSO-LP, the DCO will provide written acknowledgement of the gift with thanks ( will not be used) to the source. If the donor was the Association or the Foundation, the written acknowledgement of the gift will be sent to them. The written acknowledgement will include mention of the gift s description, its value, and the receiving Auxiliary unit.