Protest raised over MarAd policy
It’s one of the largest carriers of cargo for U.S. troops in Iraq and Afghanistan, it operates ships for the Military Sealift Command (MSC), including those with equipment to track missiles and submarines.
But now Maersk Line Ltd. (MLL) said it is being told by the Maritime Administration and Department of Transportation that it cannot bid to continue to operate eight “fast sealift ships” that it has run for the past four years.
The fast sealift ships, or FSS, are kept empty but ready to load cargo at four ports around the country — two each in Philadelphia; Baltimore; Marrero, La.; and Alameda, Calif. As of Oct. 1, 2007, MarAd began operating the FSS on the Military Sealift Command's behalf. Effective Oct. 1, 2008, all eight FSS were transferred to MarAd's Ready Reserve Force.
While Maersk Line Ltd. was allowed under a “grandfather clause' to continue operating the ships until its contract expires this October, “under DOT-MarAd regulations they want a Section 2 citizen” to operate the ships, said Kevin Speers, a spokesman for Maersk Line Ltd. “Essentially a Section 2 citizen is a company with its ultimate headquarters in the United States, and not a documented citizen that may be a U.S. subsidiary like Maersk Line Ltd.”
Maersk Line Ltd. is the U.S.-flag shipping arm of the Copenhagen-based A.P. Moller – Maersk Group.( An American Shipper profile of the company is available here.)
“The irony of this is that Maersk Line Ltd. has been serving the U.S. government since 1983. We have been operating special mission ships, we have a special security agreement with the Department of Defense, we carry cargo for our troops in Afghanistan, Iraq and we even have a history of being involved in serving the U.S. government going back to the Vietnam War. Yet in this instance, we are excluded from competing for a contract that we hold and that we have been performing on very well for four years,” Speers said.
“This is not in the best interest of the U.S. government or the U.S taxpayers or our military to exclude companies that are extremely capable and able to compete. We are trusted partners, we have been for a long time, we are reputable contractors,” he said. “At this point we are trying to discuss it and work with the Maritime Administration and federal government to come to a resolution, but we are keeping our options open.”
Maersk’s view is being supported by the Organization for International Investment (OFII), an association that represents U.S. subsidiaries of foreign companies.
Nancy McLernon, OFII president and chief executive officer, wrote to Transportation Secretary Ray LaHood, saying, “notwithstanding that MLL has successfully managed those vessels under that contract for over four years and the recommendation by the U.S. Navy's Military Sealift Command that MLL be allowed to compete under the new solicitation, the company is being excluded from the bidding process.
“The issue of MLL's eligibility to contend for subsequent awards of that contract has been before the Maritime Administration for some time, and the agency's failure to act is of great concern to all OFII members whose investment plays a vital role in the U.S. economy and in the U.S. transportation industries.
“This discriminatory treatment of certain U.S. companies is not mandated by applicable law and violates longstanding principles of international trade ensuring national treatment for U.S.-based subsidiaries of multinationals,” McLernon said. “Restricting the ability of these companies and their American workers to fully participate in the management of RRF vessels undermines the effectiveness of the program, increases the cost to the United States by reducing competition for such contracts, and calls into question the commitment of the United States to provide a nondiscriminatory environment for foreign investment.
“Just because there are some companies we would not want doing certain things does not mean put all foreign-based companies in a monolithic group,” McLernon said. “Each company, each contract, each bid needs to be viewed for any sort of national security concern rather than a blanket restriction on any of them to bid for a contract.”
McLernon said her group hopes to be able to have a meeting “and have a constructive dialog with the Department of Transportation on this issue and educate them on our areas of concern.”
Neither MarAd nor LaHood’s office immediately responded to a request for comment on the issue. ' Chris Dupin