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SCA Weekly Report | December 2 - 6, 2019

 

Shipbuilders Council of America

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SCA Weekly Report | December 2 - 6, 2019

 

ANNOUNCEMENTS

 

SCA 2020 Winter Meeting Registration Now Open

 

Registration for the Shipbuilders Council of America Winter 2020 Meeting in Coral Gables, FL is now open. The meeting will take place from February 4 - 6, 2020.

 

A draft agenda can be found here>

 

Fees

Registration for the SCA meeting is $550 per attendee. Please note that the registration fee increases to $650 after January 10, 2020.

 

Click Here to Register >

 

SCA IN THE NEWS

 

Shipbuilders Council of America announce Stuardi as Chairman and Haller as Vice Chairman of the SCA Partners Committee

AJOT – 4 December 2019

The Shipbuilders Council of America (SCA) today announced the appointment of the new Chairman and the new Vice Chairman of the SCA Partners Committee. Mr. Rob Stuardi of American Equity Underwriters in Mobile, Alabama and Mr. Mark A. Haller of Tri-Tec Manufacturing in Kent, Washington will join the national trade association in advocating, communicating and representing the ship repair industry to all stakeholders and the U.S. Navy.

 

Peter Navarro: Trump Impeachment efforts are hitting Americans where it hurts — in their wallets

Fox News – Peter Navarro – 1 December 2019

A distracted and divided House has also failed to pass a budget for the 2020 fiscal year. Instead, Congress just keeps kicking the budget can down the road with short-term spending bills known as continuing resolutions. America’s defense-industrial base is being hit particularly hard by congressional addiction to short-term budget fixes. Exhibit A is our nation’s shipbuilding industry. Shipbuilding is a long lead-time and capital-intensive industry that depends on stable and predictable funding. According to the Shipbuilders Council of America, 94 percent of its members will have to halt hiring if the government continues to operate under a continuing resolution. The American public understands intuitively that the impeachment circus launched by Pelosi and House Intelligence Committee Chairman Adam Schiff, D-Calif., is not just a partisan witch hunt. It is also a profound waste of time. The House should be focused not on a purely partisan attempt to overthrow a duly elected president, but rather on the true priorities of the American people.

 

Coast Guard’s Schultz Keynotes Congressional Shipbuilding Breakfast

Seapower – Scott Achelpohl – 26 November 2019

The shipbuilding caucus provided a forum for members of Congress and U.S. Coast Guard, Navy, Marine Corps and industry leaders to improve awareness of the current and future state of shipbuilding. A topic of prominence at the breakfast at the Rayburn House Office Building in Washington, D.C., was how well the Coast Guard is resourced and how the sea service — as well as the Navy, Marine Corps and U.S. Merchant Marine — is managing budgetarily in the era of uncertainty under continuing resolutions (CR) from Congress. At the caucus breakfast, “I reiterated the theme from the [Navy League Anchors Aweigh Congressional Fly-In on Nov. 14] regarding the damage done by continuously running CRs and that this process stymies the ability for the forces to stay ahead or keep pace with our competitors,” said retired Navy Rear Adm. Sinclair Harris, a former commander of the U.S. 4th Fleet and now the civilian director of business development at the Department of the Navy. “DoD and DHS need stable budgets now and the flexibility to move resources in the direction of addressing challenges and changes in technology.”

 

Congresswoman Elaine Luria Votes to Prevent Government Shutdown

Cape Charles Mirror – Wayne Creed – 24 November 2019

Congresswoman Elaine Luria (VA-02) today voted for a continuing resolution to fund the government through December 20, temporarily averting another government shutdown. This comes two months after the House passed similar legislation funding the government through November 21. Congresswoman Luria repeated her strong preference for an orderly and responsible budgeting process that creates certainty for the military and the Hampton Roads regional economy. “Two months ago, the Senate’s inability to get to work forced us to pass short-term government spending legislation,” Congresswoman Luria said. “Today, we are in the same situation. In Hampton Roads, short-term spending harms our local naval operations, shipbuilding industries, and workforce. I urge the Senate to immediately pass its spending bills so we can pass a bill that fully funds the government.”

 

Congress, Defense Industry Warn Against Short-Term Federal Spending Deal

USNI News – Ben Werner – 22 November 2019

A CR, whether short-term or long, does not affect all defense contractors the same way. A long-term CR would cause the vast majority of small shipbuilding contractors would halt or scale back hiring, warns to a letter to House and Senate leaders from Matthew Paxton, the president of the Shipbuilders Council of America, and 70 organization members. “The effects of a Continuing Resolution (CR) are detrimental to the shipyard industrial base’s ability to support the nation’s Navy, Coast Guard, and other agencies,” states the letter to Congress obtained by USNI news. “The devastating impacts of both a short-term and long-term CR come at a time when the shipyard industrial base is making signi´Čücant investments in infrastructure, materials, and people in order to rise to the challenge to build, maintain, modernize and repair the Navy the Nation Needs of 355 ships, modernize the US. Coast Guard and build the future state maritime training academy ships.”

 

CONGRESSIONAL UPDATE

 

Lawmakers Agree to Spending Allocations

Top congressional negotiators have agreed to a set of spending levels for legislation to fund the government in fiscal 2020, a move that reduces the chance of a shutdown in late December. House Appropriations Chairwoman Nita Lowey (D-NY) and her Senate counterpart, Richard Shelby (R-AL), have reached agreement on the figures, according to two people familiar with the talks. By deciding on top-line spending figures for the 12 fiscal 2020 appropriations bills, House and Senate lawmakers can begin negotiating the details of the bills with an eye toward striking a deal to avoid a shutdown or another short-term stopgap measure in late December. Lawmakers are now working to complete all 12 bills before that deadline, though some have said they’re skeptical all the bills can be finished. The most difficult to complete will be the measure covering the Department of Homeland Security. Lawmakers have described Trump’s border wall funding request in the homeland bill as the main sticking point in discussions.

 

Appropriators Meet on Defense Funding Bills

The top four members of the House and Senate Appropriations Defense subcommittees met Thursday to negotiate a Defense spending measure, a person familiar with the plans said. Subcommittee leaders in both chambers have met this week to try to finish drafting their bills by the end of the week, leaving any particularly controversial measures to the full committee leaders or party leaders. House Appropriations Chairwoman Nita Lowey (D-NY) said negotiators were moving along “efficiently” and that she still hopes to get all the bills done by Dec. 20, rather than turning her focus to a third stopgap measure. Senator Richard Shelby (R-AL) was less optimistic, saying the border wall issue continues to hamper negotiations and that lawmakers weren’t moving fast enough to avoid another continuing resolution. If talks don’t improve, “I think we’re headed down the road to a CR,” Shelby said Wednesday.

 

Smith Hints At Path Forward for NDAA

In remarks before the American Enterprise Institute (AEI), House Armed Services Committee Chair Adam Smith (D-WA) said it was “very much possible” that by the end of the week lawmakers could agree on a bipartisan path for the stalled fiscal year 2020 National Defense Authorization Act (NDAA). Smith’s remarks suggested House and Senate negotiators are prepared to compromise in a variety of areas, including Democrats' backing off bill language that would have prohibited President Trump's use of defense funds to construct a wall on the U.S.-Mexico border, as well as restrictions to the Defense Department's ability to reprogram money.

 

Smith said the two-year appropriations agreement, which locks DOD into an essentially flat spending topline between FY-20 and FY-21, should be enough of a deterrent to the White House if they again try to use defense funds for the wall without the consent of Congress. 

 

NAVY NEWS

 

Retired Rear Adm. Kenneth Braithwaite Tapped to be Next SECNAV

President Donald Trump announced his intention to nominate retired Rear Adm. Kenneth Braithwaite, the current U.S. ambassador to Norway, to be the next secretary of the Navy. Secretary of Defense Mark Esper suggested Trump consider Braithwaite, a 1984 graduate of the U.S. Naval Academy, to become the secretary of the Navy after asking Richard V. Spencer to resign from the post. When Esper worked as a staffer for the senate foreign relations committee between 1998 and 2002, Braithwaite worked for former Sen. Arlen Specter (R-Pa.) between 1997 and 2000, according to their bios.

 

Before becoming ambassador to Norway, Braithwaite was a lobbyist for the hospital and healthcare industry. In uniform, Braithwaite first flew anti-submarine missions in the western Pacific and Indian Oceans, according to his Navy bio. Braithwaite transferred to the public affairs community in 1988. He served aboard USS America (CV-66) and as the chief of public affairs for Naval Base Philadelphia. In 1993, Braithwaite left active duty but continued serving in the Navy reserves. He deployed in March 2003 for Operation Iraqi Freedom to support naval operations to capture the Iraqi deep-water port of Umm Qasr, according to his bio.

 

Navy to Issue RFP for Shipyard Sustainment Program Management

The Navy in February plans to issue a request for proposals to manage its naval sustainment effort for shipyards. Vice Adm. Thomas Moore, the Naval Sea Systems Command chief, told reporters this week the service awarded contracts to McKinsey & Company for the Portsmouth Naval Shipyard and to A.T. Kearney for the Pearl Harbor Naval Shipyard. The Navy established a sustainment effort for shipyards based on the sustainment program it executed for aviation maintenance. The service started the initiative, known as Naval Sustainment System -- Shipyards, with the Boston Consulting Group working on the Puget Sound and Norfolk Naval Shipyards.

 

 

REPORTS & STUDIES

 

GAO Says Navy Shipyard Plan Could Cost ‘Billions’ More than Service Estimate

According to a recent GAO report, the Navy’s methods for estimating the initial costs of its $21 billion plan to improve the four public shipyards create risks that "together could add billions to the ultimate cost." The report was written in response to a Fiscal Year 2019 National Defense Authorization Act requirement. Lawmakers asked GAO to review the extent to which the Shipyard Infrastructure Optimization Plan addresses deficiencies in the Navy's infrastructure, includes reliable cost estimates and lays out roles and responsibilities for implementation. GAO recommended the Navy secretary revise the service's cost estimate using the watchdog agency's best practices and provide regular reporting to Congress on progress, challenges and milestones. Auditors also recommended the service make clear that it intends to obtain an independent cost estimate.

 

ENERGY NEWS

 

BOEM Offshore Wind Review may go to late 2020; developers undeterred

The Department of Interior’s review of potential cumulative impact of East Coast offshore wind energy development may continue into late 2020. But industry advocates say the nascent U.S. industry’s momentum is continuing, with new contracts and commitments, and expectations of new Bureau of Offshore Energy Management offshore lease sales in New York Bight and California waters. The process of permitting as many as 15 federal waters leases is on a pause along with a BOEM environmental impact statement on the Vineyard Wind project off Massachusetts, as the agency examines the potential impact of building those turbine arrays on the environment and other maritime uses.

 

INTERNATIONAL NEWS

 

China to Suspend US Navy Visits to Hong Kong In Retaliation for Human Rights Law

China said on Monday that it would suspend U.S. Navy visits to Hong Kong and sanction a range of pro-democracy non-governmental organizations in retaliation for the passage of legislation supporting human rights in Hong Kong by Congress last week. Hong Kong has seen almost nonstop protests for six months demanding democratic elections and an investigation into police use of force at the demonstrations.

 

JONES ACT NEWS

 

The Jones Act Applies To Cargo?

Mondaq – Marilyn Raia – 6 December 2019

Most maritime lawyers and seafarers are familiar with the part of the Jones Act that provides a remedy for injuries and death suffered by seamen in the course of their employment on a vessel in navigation, 46 U.S.C. § 30104. They know the Jones Act, named after Senator Wesley Jones from Washington, was enacted in 1920 to protect and maintain the United States Merchant Marine. What is not so well-known about the Jones Act is its applicability to the carriage of cargo.

 

Jones Act Changes Would ‘Jeopardize Countless US Jobs’ in Offshore Wind

Recharge News – Darius Snieckus – 3 December 2019

US fisheries advocacy body the Fisheries Survival Fund (FSF) has claimed proposed changes to the Jones Act – requiring that cargo, including wind turbines, shipped between US ports be transported on American-flagged vessels – could cost ‘countless of job opportunities’ to local companies in the rapidly emerging Northeast Atlantic offshore wind sector. Writing to US Customs and Border Protection (CBP) to voice it opposition to the “new interpretations” of the law – which would flex the legislation to allow offshore wind developers to shuttle components to a project site on non-US-owned vessels, FSF said such a move would “allow foreign developers to use foreign vessels for the rapid build-out of offshore wind farms [and would] jeopardise” the economic development potential to local contractors.

 

How Even Libertarians Can Tackle The Climate Crisis

Forbes – Jeff McMahon – 3 December 2019

When the Environmental Law Institute compiled its more than 1,000-page compendium of pathways to decarbonize the United States, its editors asked the 58 chapter authors to recommend changes in law. Aoife O’Leary argues that the Jones Act (which requires goods shipped between U.S. ports to travel on U.S. ships) may need to be repealed or modified depending on its impact on shipping emissions. Many of these authors also call for new laws or increased regulation in other areas, and Dernbach’s larger point is not that decarbonization is a libertarian exercise, but that most political ideologies can find native decarbonization policies. “You can design the Green New Deal through this, put all the legal mechanisms together for a particular version of the Green New Deal,” he said, “or you could build something else. There’s a bunch of different ways you could use the cookbook.”

 

US maritime industry fears recent government proposals may weaken Jones Act

Hellenic Shipping News – 26 November 2019

The US maritime industry fears a Trump administration proposal to modify decades of ship transportation rulings could weaken Jones Act enforcement, potentially altering a century of legal precedent governing movement of crude oil, refined products and other commodities between US ports. “This interpretive guidance is a huge loophole that is being written into the Jones Act,” Aaron Smith, CEO of the Offshore Marine Service Association, told S&P Global Platts in an interview. “This is interpretive guidance that weakens US law.” Last month, the US Customs and Border Protection proposed changes to rulings it had made dating back to 1976 related to ship movements for US offshore oil and gas projects. These rulings had allowed movement of certain equipment, such as risers and pipeline connectors, between offshore projects in US waters and US ports on a foreign ship.

 

IN THE NEWS

 

Coast Guard Updates Plans for new Cutters

The Coast Guard is moving closer to finalizing a plan to replace its aging inland cutter fleet within the next 10 years, said Aileen Sedmak, assistant commandant for acquisition for the Waterways Commerce Cutter (WCC) Program. The acquisition schedule, which could change as specs are refined, calls for a 2021 release of RFPs; contract awards in 2021 and 2022, with the first vessel of each type delivered and operational for testing in 2025, and full operational capacity by 2030.

 

Atlantic Wind Transfers, Blount, Chartwell sign Offshore Wind Vessel Deal

U.S. offshore wind farm support company Atlantic Wind Transfers has signed a multi-million-dollar, market-first order for two state-of the-art Chartwell 24 crew transfer vessels (CTVs), developed by Chartwell Marine. The vessels, to be deployed in support of new wind farms off the East Coast, will be built by Blount Boats, with delivery scheduled for 2020. 

 

Serious Concerns Raised Over Inadequate Icebreaking Capabilities on Great Lakes

With winter approaching, worsening ice conditions and high water, the Great Lakes region could be facing potential job losses and serious financial implications due to aging icebreaking assets on both sides of the border, according to U.S.-based Lake Carriers’ Association. The reliability and number of U.S. and Canadian icebreaking assets on the Great Lakes is seen as critical for the flow of cargoes to freshwater ports during the winter and spring commercial shipping seasons. But, unfortunately, the outlook for reliable icebreaking on the Great Lakes is not good, the Lake Carriers’ Association said.

 

 

If you have any questions, please do not hesitate to contact Paula Zorensky on the SCA staff.