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SCA Weekly Report | September 21-25, 2020

Shipbuilders Council of America

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SCA Weekly Report | September 21-25, 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


Confirmed Speakers:

  • Charlie Cook, Cook Political Report
  • Senator Roger Wicker (R-MS)
  • Rep. Sam Graves
  • Rear Admiral Eric Ver Hage
  • Rear Admiral John Polowczyk
  • Ron O’Rourke, Congressional Research Service 
  • Jason Atwell, FireEye




House Passes Short-Term Continuing Resolution Through December 11; Includes Funding for Columbia-Class Submarine  

The House on Tuesday overwhelmingly voted to extend federal funding through Dec. 11, while punting the threat of a government shutdown until after the presidential election. The short-term funding fix now goes to the Senate, where it’s expected to easily pass before the Sept. 30 deadline.


The continuing resolution would allow the Navy to begin detailed design and construction work on two Columbia-class ballistic missile submarines, but leaves out White House requests for Space Force and nuclear weapons programs. Without congressional intervention, the Navy would not have the money or authorization to begin work on the boats the sea service announced in June as part of a planned $10.4 billion contract.


The bill would also extend the window for reimbursing government contractors for costs related to COVID-19 through Dec. 11. 




DEFENSE NEWS: Interview with Ellen Lord

In an interview with Defense News, Undersecretary of Defense for Acquisition and Sustainment Ellen Lord discussed the health of the defense industrial base, mergers, and the impacts of coronavirus on the defense industry. Read the interview HERE.


Geurts: Navy Spent $300M in DPA Funding on Supply Chain Issues

The Navy has spent $300 million in Defense Production Act funding over the past three months to strengthen its supply chains, according to the service's acquisition executive. The money has gone to "either creating some resilience out of the existing supply chain or looking for opportunities to bolster and increase our supply chain where we see some fragility," Hondo Geurts told reporters.


The acquisition executive said the funding has also been spent "partnering [suppliers] with some of the existing stimulus package" loan activities or accelerating the Navy's own acquisition timelines to provide certainty to industry.




Navy: Despite COVID-19 Slowdown, Maintenance Delays Reduced in 2020

Despite slowdowns caused by the coronavirus pandemic, the Navy has reduced maintenance delays this year, service officials said Tuesday.


The Navy has, so far, reduced days of maintenance delay by 80% in fiscal year 2020 compared to FY-19, Rear Adm. Eric Ver Hage, the commander of the Navy's Regional Maintenance Center. Ver Hage said the Navy had completed 50 CNO availabilities, almost 700 continuous maintenance availabilities, 25,000 technical assists and 157 total ship readiness assessments this fiscal year.


Rear Adm. Howard Markle, the Navy's director of industrial operations, said the service lost a total of 269,000 standard work days before June due to the pandemic. "We rapidly modified what we needed to do in order to walk our way back towards where we are, very close to pre-COVID levels," he said. "But each and every day we have a new normal inside the yards."


Markle said the Navy has mobilized reservists into the shipyards to allow maintenance to continue during the pandemic if the regular maintenance workers have to quarantine. He said slightly more than 1,000 reservists have been mobilized thus far, a number that is set to rise to 1,300. Rear Adm. William Greene, the Navy's fleet maintenance officer for U.S. Fleet Forces Command, said COVID-19 has set the Navy's maintenance efforts back "across the board."


Navy: Norfolk Naval Shipyard CO Removed Over Poor On-Time Maintenance Rates

The commander of Norfolk Naval Shipyard has been relieved of duty related to the yard’s ongoing performance struggles in repairing and modernizing nuclear-powered submarines and aircraft carriers. Commander of Naval Sea Systems Command Vice Adm. Bill Galinis removed Capt. Kai Torkelson today due to a loss of confidence in his ability to command, according to a NAVSEA statement. Rear Adm. Howard Markle, director of NAVSEA’s Industrial Operations Directorate (SEA 04), has assumed duties as the acting commander until a permanent relief is named, according to the NAVSEA statement.


National Security Director O’Brien Helped Steer Pentagon Toward Bigger Navy

According to current and former officials, National Security Advisor Robert O’Brien has been waging a public and private crusade to get the Pentagon on board for a bigger Navy. The campaign hit a high point when last week, Secretary of Defense Mark Esper announced the Pentagon was ready to commit more funds toward new ships. The exact amount isn’t known, but it’s expected to be in the billions.


According to the sources, top Pentagon leaders have been leery of building up the Navy to Trump’s promised levels, because they wanted to instead spend the money on rebuilding maintenance capacity and developing new weapons to counter Russia and China. With support from O’Brien, Esper has continued to push the Navy to establish a more credible pathway to 355 ships. 




Congress Could Act to Limit Foreign Workers in U.S. Offshore Wind

Foreign-flag vessels and crews employed in the early stages of U.S. offshore wind energy are undercutting opportunities for American mariners, an industry spokesman told members of Congress Tuesday. At an average pay around $70,000 “marine jobs are just the kind of jobs that government policy should be promoting, said Aaron Smith, president of the Offshore Marine Service Association.


But during 2020, 12 to 15 foreign flag vessels were working on wind energy projects in Northeast U.S. waters, compared to eight to 10 U.S. flag vessels, Smith estimated. Operated by companies often based in Norway and the United Kingdom, the vessels are typically manned by mariners from nations including Russia, Ukraine and India. These foreign mariners are also paid about half compared to pay rates for U.S. mariners – at a time when 11,000 American mariners have lost work during the COVID-19 pandemic. READ MORE >





Report: Cruise Shutdown Takes Heavy Toll on Florida's Ports

In a new report based on discussions with maritime stakeholders, Federal Maritime Commissioner, Louis E. Sola, documented the economic impact of COVID-19 on Florida's cruise sector and its seaports. The effects of the cruise shutdown have been serious for cruise operators, but the collateral damage has also extended to port authorities and cities throughout the state. Many of Florida's ports are heavily dependent on the cruise industry, and they have felt the shutdown acutely. PortMiami alone expects to lose $55 million in revenue during its 2020 fiscal year due to the shutdown. Sola also noted the impact on ports that handle cargo, since falling consumer demand has hit the volume of containerized freight at Florida's container terminals. According to the Florida Ports Council, the combined impact will likely cost Florida a total of $22 billion in economic activity, $775 million in tax revenue and 170,000 jobs over the course of 2020.


Manson Orders Nation’s Largest Hopper Dredge

Recently, Manson Construction Company signed a contract with Keppel AmFELS to build a new hopper dredge at the shipbuilder's facility in Brownsville, Texas. The new dredge is scheduled to be fully operational by spring 2023 and continues a dredge building boom currently underway in the U.S. The shipyard said the Jones Act newbuild project is its first for Manson and that it will be supported by its local workforce and suppliers across the U.S.


Coast Guard Cutter Catches Fire in the Pacific

The Coast Guard Cutter, Waesch (WMSL 751), arrived at Yokosuka, Japan, on Wednesday after combatting a shipboard engineering fire on September 20 during a scheduled deployment to the U.S. 7th Fleet’s area of operations. Black smoke was reported Sunday afternoon and investigations revealed fires in the exhaust stack and nearby spaces. After 90 minutes of firefighting, the fires were confirmed extinguished. Five crewmembers reported minor injuries sustained during firefighting efforts and were treated by the onboard medical team.



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