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SCA Weekly Report | July 20-24, 2020

Shipbuilders Council of America

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SCA Weekly Report | July 20-24, 2020




MARAD Foreign Technical Workers Update


Earlier this year, MARAD received several requests for assistance in permitting foreign technical workers to enter the United States to support ship construction and repair activities due to a lack of equivalently-skilled technician’s available in-country to perform the work due to the COVID-19 pandemic. Recently, the U.S. Department of State approved changes to the process to grant National Interest Exceptions (NIE) will now lighten the burden for most of these business travelers. Specifically, the Administration has now approved an expansion of the categories of individuals who are eligible for NIEs, if those individuals are nationals or residents of the EU/Schengen, UK and Ireland, even as Presidential Proclamations 9993 and 9996 remain in effect. The guidance as of July 22, 2020, has been posted on the State Department’s website and can be found HERE.  





House Announces Second Spending Package

House lawmakers plan to vote next week on a seven-bill spending package (H.R 7617) that will include funding bills for Defense, Commerce-Justice-Science, Energy and Water, Financial Services, Homeland Security, Labor-HHS-Education and Transportation-HUD funding. 


Senate Passes FY21 NDAA

By a vote of 86-14, the Senate voted on Thursday to pass an amended version of the FY21 National Defense Authorization Act (NDAA). CLICK HERE FOR THE SCA SUMMARY  


The bill would provide $740.5 billion in total, including $636.4 billion under the measure as part of its regular Pentagon budget and $69 billion for overseas contingency operations, or war funding.Overall, the bill would authorize $21.3 billion for shipbuilding, $1.4 billion above the request. The legislation would also authorize seven new ships, one fewer than requested due to the LPD-31 previously authorized by Congress. Additionally, the measure would boost Virginia-class submarine advance procurement by $472 million to preserve the option to procure 10 Virginia-class ships and would provide multi-ship contract authority for up to two Columbia-class submarines. The bill would also establish a new Pacific Deterrence Initiative to beef up the U.S. military posture to deter China. It would earmark $1.4 billion in fiscal 2021 and another $5.5 billion for fiscal 2022.


The bill text can be found HERE and the committee report can be found  HERE .


Amendments adopted by the chamber include:

  • ADOPTED Collins (No. 2023 found on page S3485) - Sense of Congress: Limitation on Alteration of Navy Fleet Mix


House Passes FY21 NDAA

By a vote of 295-125, the House passed its version of the FY21 National Defense Authorization Act (NDAA) on Tuesday evening.


The bill would authorize just under $22 billion, $2.1 billion above the President's request, for the purchase of eight battle force ships — a Columbia-class ballistic missile submarine, two Virginia-class attack submarines, two Arleigh Burke destroyers, a new frigate and two towing and salvage ships. The proposal would wall off 75 percent of the defense secretary's operations and maintenance budget until the Pentagon delivers a 30-year shipbuilding budget to Congress. Defense Secretary Mark Esper has been at odds with top House lawmakers who have called for the Pentagon to produce a long-term shipbuilding blueprint, which the law requires to be submitted alongside the annual defense budget request. The legislation also would block the retirement of any Navy ship in fiscal 2021 until the Pentagon submits the Navy's integrated force structure assessment to Congress. The Seapower subcommittee mark, included in the final bill, also adopted an amendment that would alter the Jones Act waiver statute to clarify the requirements of a national defense waiver, limits the duration of a national defense waiver, and requires public disclosure of information about foreign vessel users of the waiver.


Additional amendments adopted by the House included:

  • DeFazio (No. 519) - ADOPTED: Includes four acts amending Title 46 relating to and supporting the maritime industry
  • DeFazio (No. 561) - ADOPTED: Adds the Elijah E. Cummings Coast Guard Authorization Act of 2020, which reauthorizes the Coast Guard and Federal Maritime Commission (FMC), and includes report requirements, demonstration program authorizations, and new regulatory mandates for the Coast Guard that will help them better execute their 11 statutory missions. This bipartisan legislation includes provisions that will further strengthen the Coast Guard by expanding the use of unmanned systems, assessing Coast Guard operational authorities, strengthening shore infrastructure, and increasing gender and racial diversity within the service. NOTE: Unfortunately the Installation Vessel provision that SCA and many, many other maritime related companies and trade associations advocated for was dropped from the Coast Guard amendment over misinformation and in some instances outright falsehoods raised by the American Wind Energy Association
  • Luria (No. 650) - ADOPTED: Prohibits the use of authorized funds to deactivate, unman, or sell Army watercraft assets until the Secretary of Defense has certified receipt of the Army Watercraft Study and that the review, analysis, and recommendations made in the AWS are considered.
  • Schakowsky (No. 685) - ADOPTED: Requires (1) defense contractors to submit detailed annual reports to DOD regarding former senior DOD officials who are subsequently employed by contractors, (2) certify that those employees are in compliance with post-government ethics rules, and (3) make these reports and certifications public
  • Yoho (No. 388) - ADOPTED: Establishes a pilot program for the Navy to experiment with the use of Liquefied Natural Gas for fueling their ships


The SCA Summary of the bill prior to floor amendments can be viewed HERE. The bill text can be found HERE and the Committee report can be found HERE.


White House Issues Veto Threat to House NDAA

The White House on Tuesday warned that President Trump will veto the House-passed version of the FY21 NDAA if it keeps the provision to remove Confederate names from Army bases and other policies he proposes. The veto threat also highlighted that the White House opposes Section 1022 of the bill, stating:


"Limitations on Use of Funds in the National Defense Sealift Fund (Section 1022). The Administration objects to section 1022. While the Administration appreciates the Committee’s support to procure additional used vessels for the sealift mission, the Administration urges removal of the requirement to procure new construction sealift vessels. This will allow the Administration to begin the necessary step of recapitalizing the sealift fleet for a fraction of the cost of procuring new vessels




US Navy’s Top Officer Reveals Grim Details of the Damage to Bonhomme Richard

A series of explosions and a 1,200-degree inferno damaged 11 of the amphibious assault ship Bonhomme Richard’s 14 decks, according to a summary of the damage by the U.S. Navy’s top officer. Chief of Naval Operations Adm. Michael Gilday, in a letter to the service’s admirals and master chiefs, said the fire caused “extensive damage” to the ship. “There is fire and water damage, to varying degrees, on 11 of 14 decks,” Gilday wrote. In the letter, Gilday praised the work of Bonhomme Richard’s crew, as well as the hundreds of sailors who rushed to the scene, many without orders to do so. Several dozen sailors and civilian firefighters were hospitalized, most with smoke inhalation and heat injuries.





New York Announces Largest Combined Solicitations for Renewable Energy

On Tuesday, New York Governor, Andrew Cuomo, announced the largest combined clean energy solicitations ever issued in the U.S., seeking up to 4,000 megawatts of renewable capacity to combat climate change. This solicitation has the potential to bring New York State halfway toward its goal of 9,000 megawatts of offshore wind by 2035.




Study Finds Jones Act Does Not Impact Cost of Living in Hawaii

Earlier this week economists from Boston-based Reeve & Associates, and Hawaii based TZ Economics, released a joint report, “The Impact of the Jones Act on Hawaii,” that concluded the Jones Act has no significant impact on the cost of living in Hawaii. In addition, the report found that freight rates in the U.S. mainland-Hawaii trade lane have declined in real terms over the last 10 years, while the Jones Act has delivered positive and substantial economic contributions, including job creation, new infrastructure investments, and a reliable pipeline for critical consumer and industrial goods moving to and from the Islands. READ MORE






Halter Marine Awarded Navy Contract for T-AGOS Program Studies

Halter Marine Inc. was recently awarded a contract for industrial studies for the Navy’s auxiliary general ocean surveillance ship (T-AGOS(X)) program. The Navy awarded the contract for the T-AGOS-class series of vessels, which ultimately will replace the existing fleet of four T-AGOS 19 and one T-AGOS 23 small waterplane area twin hull (SWATH) ships, which are reaching the end of their service lives. The contract is for a 12-month study to perform trade-off studies and analyses of the Navy design.


U.S.-Built Crew Transfer Vessel for Ørsted Starts Trials

US-based WindServe Marine’s new crew transfer vessel, WindServe Odyssey, has started sea trials. The CTV will support US offshore wind projects up and down the east coast. After sea trials at Ørsted’s Block Island windfarm, Odyssey will transit from Rhode Island to Virginia to join the closeout of construction and commissioning of the Coastal Virginia Offshore Wind (CVOW) project.


Canadian and US Ports on St. Lawrence Seaway Mixed Seasonal Results

Accessed by the St. Lawrence Seaway, the Canadian and U.S. Great Lakes ports reported mixed results in June with strong shipments of aluminum, road salt, and grain, but continuing decreases in commodities related to steel production and manufacturing. With strong results from Canadian exports in the region, the St. Lawrence Seaway reported a slight improvement in cargo shipment volumes in June, but volumes were down for the overall second quarter.


Sovereign, the World's First Mega Cruise Ship, Arrives at Scrapyard

Just a month after Spain’s Pullmantur Cruises announced its insolvency, two of its cruise ships have arrived at the scrapyards of Turkey, victims of the global pandemic. Introduced in 1988 as Royal Caribbean International’s Sovereign of the Seas, the 74,000 gross ton ship at the time was not only the largest purpose-built cruise ship but also the first of the new generation of mega cruise ships. She was nearly twice the size of Royal Caribbean’s previous cruise ships, and she ushered in a new era in cruising. In 2008, the vessel was transferred to from Royal Caribbean to Pullmantur Crusises. 



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