Buy America Request for Information; Federal Ship Financing Program

March 3, 2023: Federal Register (full link below)

Buy America Request for Information; Federal Ship Financing Program

Maritime Administration (MARAD), Department of Transportation (DOT) has issued a notice of request for information (RFI).

MARAD, a modal agency of DOT, administers the Federal Ship Financing Program (“Title XI”), which provides loan guarantees to finance the construction of commercial vessels in U.S. shipyards or shipyard projects. Although Title XI provides important support for U.S. shipyards, the U.S. maritime industry in general, including the shipbuilding sector, has been on the decline for decades. As a result, U.S. shipyards frequently turn to foreign manufacturers for a variety of components that are not made in the U.S.

This RFI is intended to gather information regarding the availability of domestically manufactured components for commercial shipbuilding in the U.S., particularly considering the investment planned in commercial shipbuilding for support of offshore windfarm facilities by MARAD through loan guarantees from the Title XI program. MARAD is seeking input from the public, including stakeholders (such as State and local agencies, the marine component manufacturing industry, component suppliers, labor unions, related associations, ship operators, and transportation advocates), on the availability of ship components manufactured in the U.S. that can meet the Title XI domestic content requirement.

Comments must be received on or before April 3, 2023.

Background: As expressed in Executive Order 14005, Ensuring the Future Is Made in All of America by All of America's Workers (86 FR 7475), it is the policy of the Executive Branch to maximize, consistent with law, the use of goods, products, and materials produced in, and services offered in, the United States. Although the Title XI statute does not contain any domestic content requirements, as a matter of policy, MARAD adopted a domestic content requirement by regulation, set forth in 46 CFR 298.13. Rather than affirmatively requiring recipients to meet a domestic content standard as a condition of financial assistance, under Section 298.13(b)(2), MARAD excludes from the loan amount that MARAD guarantees the costs of foreign components and services used in vessel construction unless MARAD grants a waiver for these costs.

MARAD reviews waiver requests based on certifications from the applicant that:

(A) A foreign item or service is not available in the United States on a timely or price-competitive basis, or

(B) The domestic item or service is not of sufficient quality.

This RFI is intended to: (i) help MARAD better understand whether and to what extent domestic sourcing is available now or may be possible in the future for commercial ship components that have historically only been available from foreign sources; (ii) ensure U.S. shipbuilders and ship operators have the opportunity to identify any commercial ship component market resources meeting the Title XI domestic content requirement; and (iii) highlight the benefits of shifting manufacturing to the U.S., considering the investment planned in this area.