MarAd to change rules for reimbursing MSP operators for repair work

MarAd to change rules for reimbursing MSP operators for repair work    The U.S. Maritime Administration has proposed to change its rules governing its pilot program for reimbursing costs of maintenance and repair work in U.S. shipyards to vessel operators in the federal government’s Maritime Security Program.
   MSP was reauthorized by the 2003 Maritime Security Act. The program provides the Defense Department with a ready fleet of militarily useful, commercially operated U.S.-flag cargo vessels during times of war and national emergency.
   The 2003 legislation established a voluntary pilot program to reimburse MSP vessel operators for the costs of maintenance and repairs performed in U.S. shipyards instead of overseas yards. The reimbursement levels under this program were set at 80 percent of the difference between the “fair and reasonable” cost to obtain qualified repair work in U.S. shipyards and the cost of similar work in overseas yards.
   Under Public Law 109-163, enacted on Jan. 6, the transportation secretary is directed to implement regulations to replace the voluntary maintenance and repair program for MSP operators with a mandatory program.
   The new program would require MarAd to enter into an agreement with one or more MSP contractors, subject to appropriations, for the maintenance and repair of one or more MSP vessels. Reimbursement levels would be set at 100 percent of the difference between the fair and reasonable cost to obtain this repair work in U.S. shipyards and similar work in an overseas yard.
   MarAd will take comments on the proposed rulemaking through April 10. For more information, contact Jean McKeever, MarAd’s associate administrator for marine asset development, at (202) 366-5737.