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SCA Weekly Report | August 10 - 14, 2020

Shipbuilders Council of America

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SCA Weekly Report | August 10 - 14, 2020





Registration Now Open:

2020 SCA Virtual Fall Membership Meeting


The 2020 SCA Virtual Fall Membership Meeting will be held online on October 7-8, 2020. The meeting will feature speakers from the Department of Defense, Congress, and other government officials. This meeting is free for SCA members to attend.


SCA will hold Board and Committee Meetings on Wednesday, October 7, 2020, and the Fall Meeting General Session on Thursday, October 8, 2020.


A draft schedule of events can be found HERE.


  • To register for the 2020 Virtual Fall Meeting General Session, CLICK HERE
  • To register for the open session of the Industry Partners Committee Meeting, CLICK HERE


Proposed Meeting Speakers:

  • Admiral Michael Gilday, Chief of Naval Operations
  • ASN James Guerts
  • Vice Admiral Bill Galinis
  • Rear Admiral Eric Ver Hage
  • Rear Admiral Tom Anderson
  • Rear Admiral John Polowczyk
  • Sen. Roger Wicker
  • Sen. John Kennedy
  • Rep. Peter DeFazio
  • Rep. Joe Courtney
  • Ron O’Rourke, Congressional Research Service 
  • FireEye Representative
  • Cook Political Representative


While it is the strong desire to have some aspects of the SCA Fall General Membership to be “in-person” the current health conditions and our social responsibility dictate that this meeting remain fully virtual. However, the SCA team is working to provide greater interaction and connectivity for all SCA members during this second edition of a virtual General Membership meeting. 


As was the case for June Virtual Meeting, we will provide sponsorship opportunities for SCA Members during the virtual event and in our notebook materials. There will be more information to come on sponsoring the Virtual Fall Membership Meeting in our Friday Weekly Reports.



Proposed EDA Transfer: Ship Spare Parts to Taiwan


The U.S. Navy is requesting the sale transfer of ship spare parts to Taiwan under the Excess Defense Articles (EDA) program. The blanket order establishes the mechanism to access spares and components that are listed in the business application portion of the Navy Community Page imbedded in the DSCA Security Cooperation Portal (SCIP), or which have been identified and provided by the Naval Supply Systems Command (NAVSUP) for review by the Taiwan Navy. Taiwan will be limited to spending $2,008,843 under the blanket order.


If you are interested, please contact Lee Ann Carpenter (below) by Thursday August 20. A non-response will be considered as agreement to the EDA transfer.


Lee Ann Carpenter

Bureau of Industry & Security

US Department of Commerce






Senate Adjourns for August Recess; No COVID-19 Deal Reached

Senate Majority Leader Mitch McConnell (R-KY) said yesterday the Senate is in recess and will not hold votes until after Labor Day. While senators, like members of the House, can be called back on 24 hours’ notice if a stimulus deal has been made, a deal between House Democrats and the White House has not been reached.


Democrats have offered to cut their original stimulus proposal totaling $3.5 trillion by roughly one third, but insist on keeping help for states, cities, and other municipalities. President Donald Trump’s negotiators, in addition to rejecting the Democrats’ topline number, have offered to put in no more than $150 billion for local assistance. Negotiations are at a standstill heading into two weeks in which the Democratic Party then the Republican Party hold their respective presidential nominating conventions.


Although there are other areas of disagreement — among them, McConnell’s plan to shield employers from liability for Covid-19 infections, and Speaker Nancy Pelosi’s (D-CA) drive to bolster the U.S. Postal Service — the question of state aid may be the biggest stumbling block. Senate Republicans included no aid for local governments in their initial proposal for the next stimulus bill released at the end of July. It did include $105 billion for schools, which are mostly funded by states and cities, and $16 billion in grants to states for coronavirus testing, contact tracing and surveillance.


In addition to finding a way forward on a stimulus bill, the Congress will also need to cobble together a plan to fund the government beyond the end of the fiscal year, which ends September 30th


Braithwaite to Testify Next Month

Navy Secretary Kenneth Braithwaite will make his first public appearance on Capitol Hill next month before a Senate Armed Services’ Readiness Subcommittee. Braithwaite is slated to testify on Sept. 23 on Navy and Marine Corps readiness alongside Chief of Naval Operations Adm. Michael Gilday and Marine Commandant Gen. David Berger.




DoD Details $11B for COVID Costs, Warns ‘At Least One’ Shipyard May Close

A new Pentagon memo estimates that between March 15 and June 15, defense contractors are expected to experience $11 billion in cost increases due to supply chain issues, with the Navy taking the brunt of it. The document, which asks Congress to fund the services for unforeseen expenses, lists $4.7 billion for the Navy, $4.3 billion for the Air Force; $1.1 billion for the Army; $594 million for the Missile Defense Agency; and $190 million for the Special Operations Command.


Hondo Geurts, the Navy’s acquisition executive, said this week that the service is not “out of the woods” in terms of a shipyard being shut down as a result of the coronavirus.


"COVID is not a place where I think anybody is out of the woods yet in terms of how it might impact us in the future," said Hondo Geurts when asked about a Pentagon white paper assessing the consequences of the pandemic.


One projection the document makes is that "at least one of the big seven shipyards may shut down" in the near future. Geurts today sought to clarify that concern, saying the document's phrasing could be taken out of context. "The impact would be if we happen to have…transmission within the shipyard, that we might have to temporarily close down the shipyard for a period of time until they got it under control," he told reporters. The concern is "not that we would have to shut down a shipyard permanently and lose them out of the industrial base," he continued.


Geurts added that in discussions with company presidents he has been told most coronavirus cases affecting workers were transmitted outside the facility, which is why no yards have closed yet. The Pentagon white paper also projected additional costs incurred by each service from March to June, estimating the Navy would require $4.7 billion in relief. Geurts said today he remains confident in that estimate but warned future modernization would be at risk if the Pentagon did not receive the funding.


Ellen Lord Looking to Settle COVID-19 Claims at Corporate Level; 3610 Guidance Forthcoming

Pentagon acquisition chief Ellen Lord said this week the Defense Department is working on a plan that could allow it to reimburse contractors experiencing pandemic-related hardships and inefficiencies with lump sums, rather than negotiate many smaller settlements. Lord, speaking during a virtual event hosted by the Professional Services Council, said DOD has developed "a path to settle globally -- at a company or division level -- that will eliminate the need to have proposals and negotiations on a contract-by-contract basis."


Lord said DOD has also developed a "streamlined path for low-dollar-value reimbursements under $2 million." She also said that DOD is in the process of developing final guidance on submitting 3610 reimbursement requests and plans to publish it “shortly.” The final guidance, Lord added, is awaiting approval from the White Office of Management and Budget for clearance under the Paperwork Reduction Act. "As soon as we secure OMB clearance, we will issue the policy," she said.


Administration Solicits Floating Border Wall to Seal off Waterways Along Mexico Border

The Trump administration wants to install floating border barriers that could be used to wall off river crossings and reservoirs along the international boundary with Mexico or extend U.S. fencing deeper into the sea, according to a new market solicitation posted by the U.S. Army Corps of Engineers. The “Buoy Barrier System” described in a new federal contracting bulletin seeks information from private companies capable of installing a system that could meet U.S. Customs and Border Protection requirements. Such a barrier would need to prevent swimmers from climbing onto it, “and must include a component (such as an anti-dive mesh) that would impede incursions and/or breaching via underwater diving while minimizing debris buildup,” the solicitation states.


MARAD Picks Crowley Government Services to Manage Sealift Recap Procurements  

This week, the Maritime Administration awarded Crowley Government Services a $56 million indefinite-delivery, indefinite-quantity contract to manage procuring the dozens of used sealift vessels required to recapitalize the sealift fleet.


"The overall objective of the [vessel acquisition manager] contract is for the government acquisition of used ships to fulfill [Defense Department] sealift requirements," the public notice states. "MARAD will acquire ships, including used U.S. or foreign-built ships as part of the Department of the Navy's plan to recapitalize the organic, government-owned sealift fleet in accordance with the Sealift That the Nation Needs report to Congress," the notice continues.





Shipbuilders Council Announces 2020 Shipyard Safety Awards

The Shipbuilders Council of America (SCA) announced its 2020 annual shipyard safety awards this week. SCA honors shipbuilding and repair organizations with the “Excellence in Safety” and “Improvement in Safety” awards each year for enhancement of operations and promotion of safety and accident prevention. Over the past several years, the industry has seen the total recordable incident rate steadily decline, with the most significant decline seen in 2019. Safety professionals in the industry are continuing to implement new safety policies. The culture of safety and putting employees at the forefront of their focus has meant the industry has been able to adapt to the challenges posed by COVID-19 so far in 2020, while protecting all involved and keeping regular operations up to speed.


Golden Ray Operations Resume after Hurricane Isaias

The Unified Command (UC) overseeing the salvage of the MV Golden Ray says operations have resumed following Hurricane Isaias. The UC has since placed resources back into position to continue work. Although cutting and lifting operations have been postponed until early October due to a combination of the COVID-19 pandemic and hurricane season, the UC reminded the public that operations are very much underway and continuing.


Pandemic to Weigh on U.S. Ports’ Peak Shipping Season

Imports at major U.S. container seaports could hit their lowest level in four years as the novel coronavirus pandemic pummels a U.S. economy that was already grappling with negative effects of the U.S.-China trade war, experts said. Total container imports could fall 9.4% in 2020, according to the National Retail Federation (NRF) and Hackett Associates’ Global Port Tracker report.


Eagle LNG and Crowley Celebrate Milestone LNG Bunkering

Eagle LNG Partners recently celebrated the 100th LNG bunkering event from its Talleyrand LNG Bunker Station, located at Jacksonville Port Authority (JAXPORT), with Crowley Maritime. Eagle LNG has expressed pride in this accomplishment, having delivered on its weekly LNG bunkering commitment regardless of COVID-19 constraints or shipping challenges. 


FMC Begins Rulemaking Process for Cruise Line Refunds

The Federal Maritime Commission announced Tuesday that it has begun a process that may lead to amending its regulations concerning “non-performance” by a passenger vessel operator (PVO/cruise line) and under what circumstances passengers must be provided a refund for a cancelled or delayed voyage. More on this rulemaking is to come.



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