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SCA Weekly Report | May 11 - 15, 2020

Shipbuilders Council of America

20 F Street NW, Suite 500

Washington, DC 20001



SCA Weekly Report | May 11 - 15, 2020





SCA 2020 Virtual General Membership Meeting

Registration Now Open


The 2020 SCA Virtual General Membership Meeting will be held online on June 17-18, 2020. The meeting will feature speakers from the Department of Defense, Coast Guard, Military Sealift Command, Maritime Administration and other government officials. This meeting is free for SCA members to attend. We hope you will be able to join us on the 17th and 18th.


Invited Speakers:

  • Bilyana Anderson, DASN RDA
  • Bill Bray, DASN RDT&E
  • Commandant Schultz, USCG
  • RADM Anderson
  • RADM Schofield, USCG
  • RADM Ver Hage
  • VADM Moore
  • MARAD Administrator Buzby
  • Senator Dan Sullivan


Click here to register



Available Cloth Facial Coverings for Maritime Essential Workers


FEMA will be distributing cloth facial coverings to maritime sector essential workers. If you want to receive the masks. Please fill out the attached form and send it back to SCA no later than COB today, Friday, May 15, 2020.




House Unveils $3T COVID-19 Relief Package

This week, House Democrats introduced H.R. 6800, known as the HEROES Act that would provide $3T in supplemental appropriations for federal agencies, state and local governments, small businesses and individuals. The measure was assembled by House Democrats and represents a starting point in negotiations with Republicans for another coronavirus response package. A summary provided by House Democrats is available HERE.


The measure would provide almost $1 trillion to state and local governments, establish a Heroes Fund to provide $200 billion in hazard pay to essential workers, make another round of payments to individuals of as much as $1,200, and extend unemployment benefits. The House is expected to vote on the measure today, Friday, May 15.


Senate Majority Leader Mitch McConnell (R-KY) called the package “aspirational.” He wants to advance legislation focused on liability protection. Some Republicans, however, are calling for a larger package; President Donald Trump, speaking at the White House yesterday, said the bill is “dead on arrival.”


Courtney: NDAA Will Endorse Columbia Block Buy, Boost Attack Subs

In an interview on Thursday, Rep. Joe Courtney (D-CT) said the FY21 National Defense Authorization Act (NDAA) would likely sign off on a Navy proposal to buy two Columbia-lass ballistic missile subs and authorize a second Virginia-class attack boat. Courtney also said that the bill will boost the shipbuilding budget that both Republicans and Democrats have derided as too small to meet the Navy’s goal of a 355-ship fleet.


The Navy proposed buying just eight new warships in the coming year and would mark a $4.1 billion cut in shipbuilding funding from the current year. Top lawmakers specifically panned a request to procure just one Virginia-class boat. The Navy included a second attack sub atop its wish list of programs that weren't included in the budget, at a cost of $2.8 billion.


Senate Armed Services Aiming for Early June NDAA Markup

The Senate Armed Services Committee is aiming to consider its version of the annual National Defense Authorization Act during the week of June 8, according to four people familiar with the plans.


Chairman Jim Inhofe (R-OK) initially planned to mark up the defense bill during the week of May 18, though the committee never formally announced a schedule. The coronavirus pandemic has kept Congress out of session for much of the past two months and delayed numerous bills as congressional leaders focused on emergency legislation to respond to the crisis and salvage the U.S. economy. The full committee markup would begin on Wednesday, June 10, according to two of the sources. Senate Armed Services typically conducts subcommittee and full committee markups in a single week.




Navy Announces ‘Next Generation Logistics Ship’ Program with June 25 Industry Day

The Navy today announced a virtual industry day for a new class of vessels meant to complement its logistics forces, dubbing them a "Next Generation Logistics Ship."


The new vessels are expected to be "commercial ship designs tailored for military applications to conduct logistics missions," according to a Navy notice. The Navy will divide the June 25 industry day into two sessions, the notice said. The first session will include a brief provided by the NGLS program, while the second session will answer industry's questions. To build the new class of logistics ship, the service is considering platform supply vessels, fast supply vessels and "other types" of offshore support vessels.


Navy to Hold MCM USV Industry Days

The Navy is planning to hold virtual industry days later this month for the Mine Countermeasures Unmanned Surface Vehicle, according to a public notice. The industry days, scheduled for May 27 and 28, will focus on a build-to-print solicitation for production of the new vessel. "The purpose of this industry day is to improve industry's understanding of how the MCM USV program fits into the Navy's plans to expand the use of unmanned vehicles," according to the notice.


Acting SECNAV McPherson Ends Navy Future Carrier Study; Nominee Braithwaite Gives Full Support to Ford Program  

The Navy’s secretary nominee has embraced a vision of the future naval fleet that is larger and includes new hull types in support of distributed maritime operations – but he also fully embraces the Ford-class aircraft carrier, in contrast to one of the main efforts being considered by former Acting Secretary Thomas Modly to attempt to trim costs to evolve the fleet amid flat budgets.


With Modly stepping down on April 7, the Navy is already moving in a different direction and may do so even more if Kenneth Braithwaite is confirmed as the next secretary. “Acting Secretary of the Navy James E. McPherson recently determined the Department of the Navy will not, for the time being, move forward with the Future Carrier 2030 effort. DON will fully support the Department of Defense’s internal study on future force structure requirements, which will include a carrier review,” Navy spokeswoman Cmdr. Sarah Higgins told USNI News. Read more HERE.


GAO Report: Navy Seeing Improvements in Surface Ship Maintenance Costs, But Schedule is Still an Issue

According to a recent report from the GAO entitled “Navy Ship Maintenance: Evaluating Pilot Program Outcomes Could Inform Decisions to Address Persistent Schedule Challenges,” the ship maintenance contracting strategy the Navy adopted in 2015 has addressed many quality and cost challenges the service had faced, but the Navy continues to see schedule overruns despite the other benefits of the Multiple Award Contract-Multi Order (MAC-MO) contracting approach. 


However, the Navy is in the midst of several efforts to address on-time delivery of ships from maintenance availabilities – which service officials have said could lead to 71 percent of surface ships coming out of private yard availabilities on time this year, up from about 30 percent just two years ago – and the GAO noted it would be watching to see the results of these efforts.


The Navy will also produce an “analysis plan” to assess its pilot program for ship maintenance availabilities. Read more HERE




Coast Guard Seeks Comments on Tank Vessel Financial Responsibility

Earlier this week, the Coast Guard announced in the Federal Register that it is seeking public comments on a proposal to expand regulations on vessel financial responsibility for all tank vessels greater than 100 gross tons. The notice of proposed rulemaking (NPRM) also proposes to make other amendments that clarify and update reporting requirements, reflect current practice, and remove unnecessary regulations.





CMMC Accreditation Body Says Provisional Program Details Were Posted ‘Inadvertently’

The accreditation group for the Pentagon's Cybersecurity Maturity Model Certification program says details released on its provisional program for auditors and assessors were published "inadvertently" on its website, and crafting the requirements and application details for the program is still in process.


On Saturday, the CMMC AB published on its website information on how the provisional program will work, including fees and an initial structure for the selection process for third party assessors. But the webpage on the provisional program, which was published by mistake, according to the group, has since been deleted from the CMMC AB website.




Royal IHC to Build Its First Jones Act Dredger

The Netherlands based Royal IHC said it has been awarded a contract to design and build a Jones Act compliant dredger for the North Carolina State Ports Authority (NCSPA) for delivery in 2021. The vessel will perform maintenance in the main seaports of Wilmington and Morehead City in order to safeguard the depth of the ports. The water injection dredger will be built at a partner shipyard in the U.S.




Offshore Oil and Gas Recovery Fighting Stiff Headwinds

The offshore community, particularly offshore service vessel operators and drillers in the deepwater Gulf of Mexico, entered 2020 fairly confident that a drilling recovery was in the making, only to be sucker punched early on by a demand-sapping coronavirus pandemic and a global oil price feud. In the U.S. operators have cut billions of dollars from their 2020 exploration and production (E&P) budgets, in what has become a tremendously fluid situation. More evidence of the growing emphasis on conserving cash came on March 18 when the latest federal lease sale in the central Gulf of Mexico attracted only $93 million in high bids. 




Thyssenkrupp, Fincantieri in Talks to Form Warship Champion

REUTERS - Thyssenkrupp is exploring several strategic options for its warship unit, ranging from combining it with Italy’s Fincantieri to creating a national champion with German peers, a person familiar with the matter said. The talks are aimed at creating economies of scale for the division, Thyssenkrupp Marine Systems (TKMS), which builds submarines and surface ships and operates in a highly fragmented sector driven by political decisions, the source said. Read more HERE.


Development of First Fully Autonomous Ship Put on Hold Due to Coronavirus

Development of the world’s first fully autonomous containership has been put on hold indefinitely amid the COVID-19 pandemic. In 2017, Norwegian fertilizer producer Yara teamed up with maritime technology company Kongsberg to develop the first fully autonomous and zero-emission containership. The 120 TEU ship, named Yara Birkeland, was planned cut emissions and reduce road transport by up to 40,000 truckloads per year while transporting fertilizer products from Yara’s Porsgrunn plant to Norway’s Brevik and Larvik ports. The coronavirus pandemic, however, has thrown a wrench in those plans.


Remote Vessel Inspections Gain Momentum

As more inspections under the new Subchapter M towing vessel inspection program are performed remotely during the COVID-19 pandemic, those involved say that virtual evaluations are working well so far. During an American Waterways Operators (AWO) webinar, participants shared their experiences working under the Coast Guard’s new guidelines that direct field units to liberally use remote inspection techniques to verify vessel compliance, and if needed, defer inspections. Most of the feedback was positive regarding the remote inspections.


Container Volumes Continue to Slide at the Port of Long Beach

Fewer cargo containers moved through the Port of Long Beach in April as economic effects of the COVID-19 pandemic continue to impact global trade. The Port of Long Beach today reported container volumes of 519,730 TEU last month, down 17.3% from April 2019, the port’s busiest April on record. Imports slid 20.2% to 253,540 TEUs, while exports also declined 17.2% to 102,502 TEUs. Empty containers headed overseas decreased 12.2% to 163,688 TEUs. This brings the port’s total during the first four months of 2020 to 2.2 million, down 9.5% from the same period in 2019. 



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