GAO: MarAd will not likely meet vessel scrapping deadline

GAO: MarAd will not likely meet vessel scrapping deadline    A federal watchdog agency said the U.S. Maritime Administration will not likely meet its congressional deadline to dispose of more than 100 obsolete vessels from its fleet.
   Since fiscal 2001, the agency has disposed of 18 vessels — 17 for scrapping and one for artificial reefing. Congress mandated in 2000 that MarAd dispose of its obsolete ships by Sept. 30 2006.
   “MarAd’s slow progress is due primarily to program leaders not developing a comprehensive management approach that could address the myriad of environmental, legal, and regulatory challenges that the program faces,” said the Government Accountability Office in a recent report.
   Since fiscal 2002, MarAd has relied mostly on an “inappropriate procurement method,” known as the Program Research and Development Announcements (PRDAs), to acquire ship-scrapping services, the GAO report said.
   MarAd told the GAO that PRDAs provide “greater flexibility and allow firms to propose innovative solutions to ship disposal.” The GAO said that PRDAs should only be used to contract for research or development.
   “MarAd was not contracting for research and development, but instead was acquiring ship scrapping services,” the GAO report said. “MarAd’s use of PRDAs has also resulted in a lack of transparency in the contract award, and has raised concerns among firms as to the fairness of MarAd’s processes.”
   The GAO also said it was unable to isolate the direct impact of overseas competition and other factors on reducing ship disposal costs. MarAd attributes the decrease in ship disposal prices almost totally to overseas competition. GAO said other factors, such as larger annual program funding and increases in the steel scrap value, may have played a role. the GAO report said.
   The GAO recommended that MarAd could strengthen its ship disposal management by developing “a comprehensive integrated approach” and altering its contracting method for disposal services.