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1. The Swift is chartered to the MSC and serves as a mine warfare command and support ship and experimental vessel for the Navy and Marine Corps. It is one of two high-speed vessels (the other being the Westpac Express) that are part of the 24 ships in the MSC's Special Mission Ships Program, and also has been used to provide humanitarian assistance to those countries affected by the tsunami in Southeast Asia. In 2003, the Department of Commerce, Bureau of Industry and Security (BIS), at the request of the Army, conducted an assessment of the economic benefits of a TSV building program for U.S. shipyards. At that time, the Army was committed to acquiring seven TSVs by 2008. The BIS study concluded that such a building program would add more than $1.3 billion to the U.S. economy and provide almost 3,000 new jobs at compet- itive wage rates. However, unlike the LCS program, the federal government has not specifically appropriated funds for further development and construction of non-combat high-speed vessels by the U.S. military for fiscal year 2006. One benefit available to existing and future high-speed ferry builders is a Department of Defense program that finances, among other things, the installa- tion and maintenance of "national defense features" (e.g., reinforced decks, cranes and roll-on/roll-off ramps) on vessels through the National Defense Sealift Fund (NDSF). In fiscal year 2005, Con- gress appropriated over $1.2 billion to finance such activities. Fiscal year 2006 appropriations could reach $1.6 billion or more. The NDSF is used, in part, to install and maintain defense features on private- ly owned and operated U.S.-flag vessels. In order to qualify for such funds, vessel owners must submit offers to have defense features installed and maintained on their vessels. Once a determination is made that the offer is economically sound, the federal government will approve the expenditure of the funds. The funds are designed to compensate the vessel owner at a fair and reasonable rate for the following: The costs to build, procure, and install defense features on the vessel. The costs to periodically maintain and test the defense features. Increased costs of operation or any lost revenue attributable to the installation or maintenance of the defense features on the vessel. Any additional costs associated with the defense features as determined by the contract. Payments under the contract may be made either in advance in a lump sum, in which case a security interest in the vessel by way of a preferred mortgage is required, or annually. As consideration for such financing, the vessel owner agrees to make the vessel available to the Secretary of Defense, fully crewed and ready for sea, at any time and at any point determined by the Secretary of Defense. Despite the public funding constraints, incentives are available, including the NDSF, for private builders and operators interested in chartering high-speed ves- sels to the military. The success of the Westpac Express and the Spearhead have set the stage for future use of these vessels for both theater support and training. 16 • MarineNews • July, 2005 LEGAL BEAT Circle 213 on Reader Service Card Circle 203 on Reader Service Card The Best Box Made! Better Way Products “Your Satisfaction Is Ours” 70891 CR 23 New Paris, IN 46553 574-831-3340 FAX: 574-831-3611 E-MAIL: rabwp@bnin.net www.dockbox.com Reinforced lids for Adult Seating Ideal for life Jacket Storage Lockable Over 25 Standard Models Custom Sizes Available HIGHEST QUALITY! VALUE! Circle 219 on Reader Service Card Circle 201 on Reader Service Card JUlyMN2005 2(9-16).qxd 6/30/2005 12:01 PM Page 16
