SCA Weekly Report | July 13-17, 2020

Shipbuilders Council of America

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SCA Weekly Report | July 13-17, 2020

ANNOUNCEMENTS

SCA NDAA Webinar

Thank you to everyone that was able to join us this week for the FY21 NDAA Analysis Webinar. If you were unable to attend the live webinar, you can view the recording HERE.

CONGRESSIONAL UPDATE

House Appropriators Advance Defense, Transportation and Homeland Security Funding Bills

This week, the House Appropriations Committee advanced the fiscal 2021 funding bills for the Departments of Defense, Transportation and Homeland Security. The bills are set to be included in mini-packages to be voted on by the full House in the coming weeks. 

Defense

On Tuesday, House Appropriators voted 30-22 to pass the fiscal 2021 defense spending bill which would provide $695 billion for the Department of Defense. During Tuesday's markup, Democrats adopted a series of amendments to rein in presidential war powers, including proposals to phase out the 2001 war authorization that underpins worldwide U.S. counterterrorism operations, repeal the 2002 Iraq War authorization and bar military action against Iran without congressional approval.

The bill provides $22.3 billion to procure nine Navy ships, $2.4 billion above the request, including: 1 Columbia class submarine, 2 Virginia-class submarines, 2 DDG-51 guided missile destroyers, 1 FFG(X) frigate, 1 LPD-17 Flight II and two towing, salvage and rescue ships.

A committee summary of the bill can be found here. The full text of the bill, prior to adoption of amendments in full committee, is here. The bill report is here.

The SCA summary of the bill can be found HERE.

Transportation

House appropriators voted 30-22 to advance the fiscal 2021 Department of Transportation, Housing & Urban Development (THUD) bill which provides $158.3 billion in base budgetary resources. The bill also includes budgetary resources for surface transportation programs totaling $78.7 billion and $75 billion to support the economic recovery from the coronavirus pandemic by investing in the nation’s transportation and housing infrastructure.

In the base bill, the committee provided the following amounts to key Maritime Administration programs:

-         $20 million for the Small Shipyard Assistance Program

-         $3 million for the Title XI Maritime Guaranteed Loan Program

-         $389 million for the 4^th National Security Multi-Mission Vessel

In the additional appropriations provisions, the committee provided the following additional amounts:

-         $315 million for the 5^th National Security Multi-Mission Vessel

-         $100 million for the Small Shipyard Assistance Program

-         $1 billion in port infrastructure improvement grants

A committee summary of the bill is here. The text of the bill, prior to adoption of amendments in full committee, is here. The bill report is here.

The SCA Summary of the bill can be found HERE.

Homeland Security

House appropriators voted 30-22 Wednesday to advance the FY21 Homeland Security funding bill. The bill funds the Department of Homeland Security, including the U.S. Coast Guard. The bill provides $2.58 billion for Coast Guard Procurement, Construction and Improvements line, including funds for four Fast Response Cutters (FRCS), the Offshore Patrol Cutter (OPC) and Polar Security Cutter (PSC).

A summary of the bill is here. The text of the bill, prior to adoption of amendments in full committee, is here. The bill report is here. An SCA summary of the bill is forthcoming. 

NAVY NEWS

USS Bonhomme Richard Fire Extinguished

Navy officials declared all active fires aboard USS Bonhomme Richard out after more than four days of battling the blaze. “Our fire teams are investigating every space to verify the absence of fire. Until every space is checked and there are no active fires we will not be able to commence any official investigations,” Rear Admiral Philip E. Sobeck, the commander of Expeditionary Strike Group 3 said in a Thursday statement. “We did not know the origin of the fire. We do not know the extent of the damage. It is too early to make any predictions or promises of what the future of the ship will be. We cannot make any conclusions until the investigation is complete.” Investigations into the cause of the fire and resulting damage and assessments are in their early stages.

RELATED: USNI News – Warships in Maintenance Always Face Increased Risk for Fire Damage

Navy Awards Contract for First Vessel in Its Family of Unmanned Surface Vessels

The Navy has awarded a contract for the first unmanned surface vessel it will design and build on its own, a key milestone for the eventual family of unmanned systems that will be a key component of the future surface fleet, according to a Monday contract announcement from the Pentagon. L3 Technologies won a $35-million contract to develop a prototype medium unmanned surface vehicle (MUSV) on Monday, which could grow to $281 million if options for eight follow-on craft are exercised, Naval Sea Systems Command announced. The contract calls for delivering the first prototype by the end of the Fiscal Year 2023, according to a release from NAVSEA.

The Navy envisions a family of unmanned systems that will be the backbone of a future fleet of netted “attritable” platforms that will provide lower-cost options compared to manned surface combatants like the Arleigh Burke-class destroyer or the new FFG(X) frigate program.

RELATED: Defense News: Congress Skeptical of Navy’s Unmanned Vessel Plans

INTERNATIONAL NEWS

U.S. Denounces China’s Claims to South China Sea  

The Trump administration rejected China’s expansive maritime claims in the South China Sea, reversing a previous policy of not taking sides in such disputes and escalating tensions with Beijing on yet another front. The move aligns the U.S. with a 2016 ruling by a United Nations tribunal that found China’s claims to waters also contested by the Philippines were unlawful. It’s meant to push back against what the U.S. sees as an intensifying Chinese campaign to dominate the resource-rich South China Sea and smaller nations in the region. “We are making clear: Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them,” Secretary of State Michael Pompeo said in a statement Monday.

In the past, the U.S. largely limited itself to calling for ensuring “freedom of navigation” in the contested waterway, which is critical for global trade routes, while stopping short of taking a position on specific claims. China has proceeded nonetheless, engaging in a years-long campaign to build bases and other outposts on shoals, reefs and rock outcroppings as a way of deepening its claims. China on Tuesday said the U.S. statement “neglected the history and facts” around issues concerning the South China Sea.

ENERGY NEWS

Small US Offshore Windfarm with Big Impact

While it only has two 6 MW turbines, the Coastal Virginia Offshore Wind pilot project will lay the foundation for the largest offshore windfarm in North America. US utility Dominion Energy completed installation of the two-turbine, 12-MW Coastal Virginia Offshore Wind (CVOW) pilot project 43 km off Virginia Beach in June. CVOW is the first offshore windfarm to be approved by the US Bureau of Ocean Energy Management (BOEM) and installed in federal waters, and the second built in the US. Block Island Windfarm in Rhode Island, with 30 MW of capacity, was the first offshore windfarm in the US.

Former Excelerate Executives Plan Galveston LNG Bunkering Port

Houston-based Pilot LNG has filed regulatory applications to develop Galveston LNG Bunker Port. Located on Pelican Island, the facility infrastructure will be designed around floating LNG (FLNG) technology to be engineered and constructed by Pilot LNG’s partner, Wison Offshore & Marine. As international regulators tighten emissions standards, the maritime industry is increasingly turning towards LNG as the marine fuel to comply.

JONES ACT UPDATE

Trump Backed off Shipping Reform under Political Pressure, Former Advisers Claim

President Trump bowed to political and industry pressure by abandoning reform of the controversial Jones Act shipping rule, according to officials who were present at the time and dislike the decision. The dispute over the century-old law became a flashpoint in the bigger battle within the administration between the free trade contingent and those who want to protect domestic industries from foreign competition. The law requires goods shipped between American ports to be transported on ships built, owned, and operated by American citizens. To those in favor of reform, it's an antiquated barrier to the free flow of goods among countries that makes things more expensive for people in the United States. But defenders argue that it is critical to maintaining the domestic shipbuilding industry and protecting national security. READ MORE

IN THE NEWS

CDC Extends Cruise Ship No Sail Order through September 2020

With cases of COVID-19 growing exponentially across the United States, and especially in the southern states that host many cruises, it came as little surprise that the Centers for Disease Control and Prevention (CDC) today announced the extension of its No Sail Order for cruise ships through September 30, 2020. As with the prior order announced in April, the current revision suspends passenger operations on cruise ships with a capacity to carry at least 250 passengers in waters subject to U.S. jurisdiction.

Keel Laid at Bay Ship for LNG Bunker Barge

Last month, Fincantieri Bay Shipbuilding and Polaris New Energy held a keel laying to mark the start of construction of an LNG bunker barge. The barge, Clean Canaveral, will be part of an articulated tug-barge unit that will initially operate along the U.S. East Coast, providing LNG bunkering solutions to NorthStar Midstream’s customers. 

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