American Shipbuilding Association

2005 Shipbuilding Wrap-up

After months of debate and discussion, the House and Senate completed work on the FY 2006 Defense Authorization and Appropriations Bills before adjourning for the holiday recess.  The final Appropriations Bill provided just under $7 billion for 6 new naval ships, an increase of over $400 million above the Administration’s request for only 4 ships.  While fully funding the request for 1 Virginia-class submarine, 1 LPD-17, and 1 T-AKE, and the Incremental Funding requests for LHD-8 and LHA-R, Congress increased the advanced procurement amount for CVN-21 by $62 million, and increased funding for LCS by $450 million, with most of the funding included in the research and development account. 

To assist in the repair of naval and Coast Guard ships that are under construction at the Gulf Coast shipyards and that sustained damage from Hurricanes Katrina and Rita, Congress provided over $1.9 billion to the Navy through 2010 to “replace destroyed or damaged equipment; prepare and recover naval vessels under contract; and provide for cost adjustments” for the naval vessels under construction.  The Coast Guard was similarly provided with $74.5 million.  This funding will help to put vital shipbuilding programs back on track. 

Congress also took steps to codify several key provisions contained in the individual House and Senate FY 2006 Defense Authorization Bills.  Congress agreed to split-funding for construction of CVN-21, the next aircraft carrier, among fiscal years 2007, 2008, and 2009, rather than funding the entire cost of the carrier in one fiscal year.  This will help ease the shipbuilding budget crunch by spreading the cost of the carrier over three years. 

Congress also took steps to avert a national security crisis by prohibiting acquisition of the next generation of destroyer through a single shipyard.  The Nation presently has two builders of  surface combatants.  The Navy circulated a proposal in 2005 for a winner-take-all acquisition award for the construction of the DDX class.  With the decrease in the planned procurement of the DDX, permitting a sole-source acquisition strategy could have resulted in the potential closure of a major U.S. shipyard.  Recognizing the inherent danger of having only one shipyard build the Nation’s surface combatants, Congress responded by prohibiting any follow-on class of destroyer to DDG-51 to be awarded under a winner-take-all acquisition strategy. 

The House and Senate also agreed that the Nation’s aircraft carrier force structure must maintain 12 carriers.  Early in 2005, the Navy announced plans to prematurely retire the USS John F. Kennedy.  The move would have dropped the U.S. aircraft carrier fleet to 11.  The decision was met with strong criticism from Members of Congress.  Eleven carriers has been deemed as a  strategically unacceptable number, particularly given the active forward deployment and present missions of the carriers in the fleet.  Had Congress not acted as it did on the Kennedy, coupled with the decision to delay the next generation of aircraft carrier, the fleet would have dropped to 10.  The FY 06 Defense Authorization Bill included language requiring the Navy to maintain 12 operational aircraft carriers in the fleet, and authorized additional funds for repair and maintenance to extend the operational life of the Kennedy.  The status of the Navy setting aside funding to overhaul the Kennedy is uncertain at this time.  

Looking ahead in 2006…

In the coming weeks, the Administration will submit to Congress its budget requests for the Navy and Coast Guard.  The Department of Defense will also be issuing its much anticipated 2006 Quadrennial Defense Review (QDR).  The U.S. shipbuilding industry has had an opportunity to review a draft report of the Navy’s long-range shipbuilding plans.  The report, ordered by the House Appropriations Committee earlier this year, will be used as a supporting document to the QDR.  According to the report, the Navy has proposed a force structure based on a 313 ship fleet.  The proposed composition includes the following: 

Today’s Navy numbers 281 ships.  To reach the required force structure, a major investment in naval shipbuilding must be made today.  As plans become finalized, the shipbuilding industry of this country looks forward to working with the Navy and Congress to build the ships the country needs to preserve national security and sovereignty.   

Congressional Shipbuilding Caucus
Celebrates First Anniversary

One year after its creation, the Congressional Shipbuilding Caucus, chaired by Reps. Jo Ann Davis (R-VA) and Gene Taylor (D-MS) numbers 98 Members. 

Comprised of Members representing shipyards, marine system and component manufacturers, and Members who are simply concerned about the Nation having the resources it needs to build the ships for our national security and economic sovereignty, the Congressional Shipbuilding Caucus focuses on the importance of maintaining a robust shipbuilding industrial base in this country.  The Caucus meets regularly with leaders of the Navy, Marine Corps and Coast Guard; Administration officials; and members of the shipbuilding industry to discuss the state of the Nation’s Fleet, and the security threat that the United States faces if the country continues to lose the businesses and skills vital to building naval ships.  The Caucus also focuses on the meteoric rise of China’s navy and naval shipbuilding industry, and the security implications for the United States.   

ASA congratulates the Caucus Members on their first anniversary, and looks forward to the continued growth of the Caucus. 

INDUSTRY NEWS

ASA Renews Alliance Agreement With OSHA 

The American Shipbuilding Association has renewed its Alliance Agreement with the Occupational Safety and Health Administration (OSHA).  The purpose of the Alliance Program is to foster and sustain the fundamental principle that by voluntarily working with OSHA as partners, best management practices for the workplace will be developed that will make the workplace as safe as possible for all employees.  This is not just the goal of OSHA, but the goal of every member of the American Shipbuilding Association - - each of which recognizes that its employees our national assets. 

Representatives from the ASA safety community have been active participants on the Maritime Advisory Committee for Occupational Safety and Health (MACOSH), which has been praised by OSHA for the initiatives it has undertaken and completed.  Additionally, ASA safety representatives have also played instrumental roles in the development of “eTools,” which shares information, training tools, and lessons learned through the use of the internet.  These efforts are illustrative of the benefits derived from participation in the Alliance Program.

The Alliance Agreement was signed by Mr. Jonathan Snare, Acting OSHA Administrator, and Mr. John Casey, Chairman of the ASA Board of Directors, and President of Electric Boat, who issued the following statement.  “It is my distinct honor to renew the Alliance Agreement with OSHA on behalf of the membership of our Association.  This renewal symbolizes the commitment of each of our member shipyards to work in concert with OSHA in order to ensure that the workplace environment is as safe as possible for all of our shipyard workers, who represent our industry’s greatest asset.”

Three Companies Join ASA

The American Shipbuilding Association welcomes the following companies as Members of the Association:  Jered, LLC; Empire Machinery and Supply Corp.; and Hose-McCann Telephone Co.   Jered, with locations in Brunswick, GA and Iron Mountain, MI, is the premier manufacturer of aircraft, cargo, and weapons elevators for the U.S. Navy.  Empire Machinery, located in Norfolk, VA, is a leading marine industrial supply company.  Hose-McCann Telephone Co., of Deerfield Beach, FL, is a leading provider of shipboard communication systems.       

Correction

The event program for the November 2005 American Shipbuilding Association’s Annual Convention inadvertently omitted mention of the gift donations by Marotta Controls, Inc.  ASA regrets this omission and extends appreciation to Marotta Controls for the company’s generous contributions. 

Don’t Forget to Register 

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Well Said!

“A good Navy is not a provocation to war.  It is the surest guaranty of peace.”
President Theodore Roosevelt
Second Annual Message to Congress
December 2, 1902