House Committee approves $120 million for small shipyard grants

The House Appropriations Committee approved $120 million in small shipyard grants for fiscal year 2021. We are grateful this key committee recognizes the Small Shipyard Grant Program as a well-run program that produces national economic benefits.

Since the Buy America requirements were tightened a couple of years ago, the program now creates three beneficiaries for each grant: the U.S. shipyard, their (primarily) U.S. vessel operator customers and the U.S. equipment vendor (or training provider). Not many federal programs can claim that.

The popularity of our program within Congress is no coincidence. I have noticed increased awareness amongst members of Congress and their staff, much of it stemming from our Coalition’s inaugural Small Shipyard Fly-In in 2019. Our work has continued this year to educate and push for support for the grant program, and, as a result, more senators and members of Congress signed funding request letters to the Appropriations Committees than ever before. As a new session of Congress begins next year, a renewed push will be necessary.

The tough part of this great news is that there might not be enough support in Congress to get the entire amount all the way through the budget process. This is due to technical budgeting reasons and politics: as proposed, $20 million (see PDF, page 90) of the funds would come through the regular budget, while $100 million (see PDF, page 240) would be considered ’emergency spending’ and not subject to the regular budget requirements. The added $100 million is part of a larger $75 billion package of infrastructure investments proposed for the transportation industry.

The Senate Appropriations Committee — which includes some long-time champions of the grant program — appears to be deadlocked on their process for moving spending bills forward this year. So even if this bill passes the full House, its fate is unclear. Will let you know if anything changes.

Some turbulence is expected in a normal election year, but throw in a global pandemic and things can get real interesting. Earlier this year Congress passed a $4 trillion bill practically without blinking. During the last recession, Congress passed the American Recovery and Reinvestment Act package which contained $100 million in Small Shipyard Grants. So there is precedent for a round of grants this large, and the result would likely be larger available grant award amounts, facilitating larger, more complex projects.

As of today, I’d advise that if you have the capability to plan ahead and look at your capital and workforce needs beyond the next few months, there could be some once-in-a-decade opportunities through the Small Shipyard Grant Program. Likely not till after the November election, but things could move quickly after that, depending on outcomes.

David Matsuda is a national transportation expert with nearly 20 years of experience leading, overseeing and working in federal transportation agencies. Most recently, he served as U.S. Maritime Administrator, where he managed more than $1 billion of federal investment into U.S. ports, shipyards and shipbuilding projects. 

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    This is good news but are there direct grants available for American naval architecture firms? The Jones Act protects American shipyards and vessel operators from foreign competition but many designs are coming from subsidized foreign firms, even for some of our military vessels.

    American naval architecture firms are mostly small businesses and, although very capable, have difficulty competing against foreign firms that have either been heavily subsidized by their governments for exporting their services or are divisions of large corporations where the basic design is “free” if you install the designer’s (actually a supplier) equipment. This has also badly hurt American equipment suppliers, as most are not integrated marine corporations like some of the large European marine companies.

    It’s time we develop more basic/functional designs here in the USA, not just production designs. Basic design is where interaction between naval architects / marine engineers with vessel owners yield operations efficiencies.
    Of course, this process also includes shipyard and equipment supplier input at early stages in the design. We shouldn’t continue to allow foreign firms to dominate this design sector, just because they have been supported by their governments more than we have.

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