[CPEO-MEF] Obsolete Vessel Disposal

[CPEO Moderator <cpeo@cpeo.org>]

The following is an excerpt from the House Armed Services Committee
Report on the National Defense Authorization Act for FY2004 (from pp.
439-440).  The full report can be viewed online as a PDF at:
http://www.house.gov/hasc/billsandreports/108thcongress/H1588RAM.pdf

-- Please note that the document is 552 pages (6,090KB) and may take
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HR1588

Obsolete Vessel Disposal

The budget request contained $11.4 million for the disposal of obsolete
vessels from the National Defense Reserve Fleet. The committee
recommends $20.0 million, an increase of $8.6 million above the budget
request. The National Defense Authorization Act for Fiscal Year 2001
(Public Law 106-398) required the Maritime Administration to dispose of
all vessels in the National Defense Reserve Fleet that are not otherwise
assigned to the Ready Reserve Fleet or otherwise designated for a
specific purpose by September 30, 2006. Section 3102 of the Bob Stump
National Defense Authorization Act for Fiscal Year 2003 (Public Law
107-314), established a program to assist states in the reefing of
obsolete ships. In that same section, a pilot program was established to
allow for the environmentally safe transfer of obsolete vessels to sites
outside the United States for disposal. Further, Section 3504 of that
same act states that the establishment of these programs does not
constitute a preference for the reefing or export of obsolete vessels
over other means, such as domestic scrapping. The Maritime
administration has three possible routes for disposal of obsolete
vessels and the committee expects the agency to move aggressively to
reach the above noted deadlines.

The committee reiterates its support for this position and recognizes
that domestic scrapping may be the most competitive and appropriate
course of action. The committee expresses its disappointment that the
Maritime Administration has not yet obligated the funds appropriated for
disposal activities in the last fiscal year, and, while several projects
both within and outside the United States are in the final stages of
negotiation, only 14 vessels have been scrapped over the last two years.
The committee understands that approximately $30 million remains
available. This is in addition to the $20.0 million that the committee
recommends for this fiscal year. The committee remains concerned that
any further delays could result in harm to the marine environment and a
potentially more expensive disposal.

With respect to the domestic disposal of obsolete vessels, the committee
understands that the Maritime Administration has suspended
the use of a private integrator for the management of ship scrapping
projects in favor of managing these projects directly. The committee
believes that the use of a domestic, private-sector integrator with
experience in management of ship scrapping projects for the U.S.
government can facilitate the efficient and environmentally sound
disposal of these vessels, and in the long term can result in cost
savings to the Maritime Administration. The committee directs the
Maritime Administration, to the maximum extent possible, to outsource to
domestic integrators the management of ship scrapping projects,
including: procurement, project over- VerDate Jan 31 2003 21:01 May 17,
2003 Jkt 087068 PO 00000 Frm 00463 Fmt 6659 Sfmt 6602
E:\HR\OC\A106HR.124 A106HR 440 sight, environmental and worker safety
compliance monitoring, and quality control.

The Congress has provided the Department of Transportation with
substantial resources to assure these ships are disposed of quickly and
safely.

The committee urges the Maritime Administration to make progress quickly
in meeting this objective. If it does not do so, the committee will
consider taking additional steps to ensure this outcome.
The committee directs the Maritime Administrator to submit a report to
Congressional Defense Committees by November 1, 2003 on any specific
financial and contractual details of foreign contracts for ship
scrapping.

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