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SCA Weekly Report | October 12 - 16, 2020

Shipbuilders Council of America

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SCA Weekly Report | October 12 - 16, 2020





Happy 245th Birthday to the U.S. Navy


SCA and all of our members wish a hearty ‘Happy Birthday’ to the United States Navy, which celebrated its 245th year this week. 




COVID Relief Package Talks Stall Out

Earlier this week, President Trump indicated he’d support a virus relief package bigger than the $1.8 trillion plan his administration has offered, but Senate Majority Leader Mitch McConnell (R-KY) rejected the bid saying that it wouldn’t get support from Republicans. “He’s talking about a much larger amount than I can sell to my members,” McConnell said of the administration’s offer to Speaker Nancy Pelosi (D-CA) and Democrats. Instead, McConnell is going forward with a vote next week on a narrow stimulus plan worth roughly $500 billion to aid an economy still reeling from pandemic-induced shutdowns. That amount is “what we think is appropriate to tackle this dread disease,” he said at one of several appearances in his home state. Pelosi is scheduled to have another call with Treasury Secretary Steven Mnuchin in a continuing saga of talks today on another stimulus for the economy. While she and Mnuchin are focused on the details of specific provisions, McConnell and Senate Republicans remain unconvinced that such an expensive package is necessary. Trump indicated he’d be open to calling Pelosi on the stimulus but doubted it would result in a deal. The two haven’t spoken directly in about a year.




Pentagon IG to Conduct Audit of Coronavirus Relief Funds

According to a memo released by the Pentagon’s Inspector General, the DOD will be conducting an audit of the money awarded to the defense industrial base out of the CARES Act passed earlier this year by Congress. “The objective of this audit is to determine whether the DoD awarded Coronavirus Aid, Relief, and Economic Security Act funding to increase the Defense Industrial Base manufacturing capacity in accordance with Federal regulations and Defense Production Act authorities,” it states.


The IG is focusing its scrub, which is starting immediately, on the office of the deputy assistant secretary of defense for industrial policy, the Air Force, Special Operations Command and Defense Contract Management Agency.  




CNO Gilday Lays Out Priorities for ‘DDG Next’ Warship, New Attack Submarine

At a virtual conference this week, Chief of Naval Operations Adm. Mike Gilday said the Navy’s next warship needs more missiles than the current crop of Arleigh Burke guided-missile destroyers but must be smaller and cheaper than the trio of Zumwalt-class DDGs. Tentatively dubbed “DDG Next” by Gilday, the new class of large surface combatants would start with the existing systems in use on current ships or in development for Burke Flight IIIs on a new hull form that would allow the Navy to add capabilities over the life of the ship. For Gilday, the most important task for the new hull is to provide the service with the volume to add additional vertical launch cells and the margin to grow. He said the size of the ship would be larger than the current 9,000-ton Burkes but likely smaller than the 16,000-ton Zumwalts. The ship would also likely borrow from the Integrated Power System from the Zumwalts to provide energy to future directed energy weapons and high-power sensors.


RELATED: Navy Looking at Clean Sheet Design for Next-Generation Destroyer


NAVSEA: Analysis of Ship Repair Processes Led to Better On-Time Rates, More Realistic Schedules

In an interview with USNI News, Commander of Naval Seas Systems Command Vice Adm. Bill Galinis said that the Navy had improved its ship repair processes and was closer to getting to its goal of zero days lost to maintenance delays. He said that the Navy had gone from more than 7,000 lost days in FY 2019 to just 1,100 in FY 2020 due to maintenance overruns and was on track to continue lowering that closer to zero, as a result of several ongoing initiatives at the private and public yards to do better maintenance more efficiently. Galinis, who took command of NAVSEA on June 19, said his three main focus areas since coming into the job have been on-time delivery of ships in construction and maintenance; improving material availability to support maintenance activities; and increasing capacity to do work by creating more efficiency and better flow within public and private repair yards.




CBO: Navy Underestimated Cost of First Frigate by 40 Percent

A new report from the Congressional Budget Office (CBO) approximates the cost for the first 10 ships in the FFG-62 program, formerly known as FFG(X) at $12.3 billion. According to CBO’s analysis, the lead ship in that program could cost $1.6 billion, a figure that is 40 percent above the service’s projections for the first-in-class vessel. According to CBO, the Navy’s projections have each ship costing $870 million for a total price tag of $8.7 billion “in 2020 dollars” for the first 10 ships.




First Offshore Wind Research Buoys Deployed off West Coast

The U.S. Department of Energy has deployed two offshore wind research buoys off California for the first time, an early step toward potential leasing of wind energy sites in the Pacific. Funded by the Bureau of Offshore Energy Management, the buoys’ mission is to gather meteorological and oceanographic data in potential wind energy areas, according to the DOE Pacific Northwest National Laboratory, which is managing the program.




Chinese Increasing Nuclear Submarine Shipyard Capacity

As China pushes to become a blue-water power, nuclear-powered submarines are critically important to Beijing’s plan. Historically the Chinese Navy’s (PLAN) nuclear-powered submarine fleet has been constrained by its limited construction capacity. There is only one shipyard in the country up to the task. But that yard has been undergoing a massive enlargement. And now, recent satellite imagery suggests an additional capacity expansion. China’s nuclear-powered submarine fleet was already expected to get much larger in the coming years. This latest development suggests that China could pump out submarines at an even greater rate. Just how many nuclear submarines China will build over the next ten years is a hot topic. The Office of Naval Intelligence (ONI) recently forecast China’s submarine fleet to grow by six nuclear-powered attack submarines by 2030. Other observers, such as retired Capt. James Fanell who was Director of Intelligence and Information Operations for the U.S. Navy’s Pacific Fleet, place their estimates even higher. What seems clear is that the number of nuclear submarines will increase.





MARAD Awards $220 Million in Grants for U.S. Ports

Earlier this week, the U.S. Department of Transportation announced the award of more than $220 million in discretionary grant funding to improve port facilities in 16 states and territories through the Maritime Administration’s Port Infrastructure Development Program. Of the 18 projects that were awarded grants, eight are located in opportunity zones, which were created to revitalize economically distressed communities using private investments. By providing the funding to support the improvement of this critical infrastructure component, MARAD and the Department of Transportation said they are ensuring these services will succeed during the nation’s ongoing economic recovery.


Carnival Cruise Line Cancels November Cruises as Hope Fades for 2020

Carnival Cruise Line has become the latest of the major cruise lines to further extend its cancelation of cruises for the North American cruise market. With the major cruise lines canceling sailings into December 2020, hope is increasingly fading for a return to cruise service this year. Carnival Cruise Line had previously canceled cruises for the remainder of 2020 except for six cruise ships scheduled to sail from PortMiami and Port Canaveral, both located in Florida. At the time, the company had cautioned that it was still evaluating the situation and would keep passengers apprised. Cruises from PortMiami and Port Canaveral have now been canceled for November 2020.


Long Beach Launches Zero Emissions Demo Project for Cargo Handling

A container shipping terminal at the Port of Long Beach is now using new, zero-emissions cargo-handling tractors to test the readiness of the equipment to handle the workload at a busy seaport. It is part of the port and state of California’s long-term initiative to lower emissions from the port and industrial operations across the state. The project is part of a $9.7 million grant awarded by the California Energy Commission, which involves the design or creation of 21 new or converted electric cargo handling vehicles. The grant will pay for most of the $13.7 million project intended to help commercialize vehicles that will move cargo sustainably at seaports all around the world and help the Port of Long Beach meet its goal of a zero-emissions cargo handling fleet by 2030.



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