[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
FISCAL YEAR 2010 BUDGET
REQUESTS OF THE COAST GUARD,
MARITIME ADMINISTRATION, AND
FEDERAL MARITIME COMMISSION
=======================================================================
(111-31)
HEARING
BEFORE THE
SUBCOMMITTEE ON
COAST GUARD AND MARITIME TRANSPORTATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
May 13, 2009
__________
Printed for the use of the
Committee on Transportation and Infrastructure
----------
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia, JOHN L. MICA, Florida
Vice Chair DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee
Columbia VERNON J. EHLERS, Michigan
JERROLD NADLER, New York FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida JERRY MORAN, Kansas
BOB FILNER, California GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas HENRY E. BROWN, Jr., South
GENE TAYLOR, Mississippi Carolina
ELIJAH E. CUMMINGS, Maryland TIMOTHY V. JOHNSON, Illinois
ELLEN O. TAUSCHER, California TODD RUSSELL PLATTS, Pennsylvania
LEONARD L. BOSWELL, Iowa SAM GRAVES, Missouri
TIM HOLDEN, Pennsylvania BILL SHUSTER, Pennsylvania
BRIAN BAIRD, Washington JOHN BOOZMAN, Arkansas
RICK LARSEN, Washington SHELLEY MOORE CAPITO, West
MICHAEL E. CAPUANO, Massachusetts Virginia
TIMOTHY H. BISHOP, New York JIM GERLACH, Pennsylvania
MICHAEL H. MICHAUD, Maine MARIO DIAZ-BALART, Florida
RUSS CARNAHAN, Missouri CHARLES W. DENT, Pennsylvania
GRACE F. NAPOLITANO, California CONNIE MACK, Florida
DANIEL LIPINSKI, Illinois LYNN A WESTMORELAND, Georgia
MAZIE K. HIRONO, Hawaii JEAN SCHMIDT, Ohio
JASON ALTMIRE, Pennsylvania CANDICE S. MILLER, Michigan
TIMOTHY J. WALZ, Minnesota MARY FALLIN, Oklahoma
HEATH SHULER, North Carolina VERN BUCHANAN, Florida
MICHAEL A. ARCURI, New York ROBERT E. LATTA, Ohio
HARRY E. MITCHELL, Arizona BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin PETE OLSON, Texas
STEVE COHEN, Tennessee
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
PARKER GRIFFITH, Alabama
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
(ii)
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION
ELIJAH E. CUMMINGS, Maryland, Chairman
CORRINE BROWN, Florida FRANK A. LoBIONDO, New Jersey
RICK LARSEN, Washington DON YOUNG, Alaska
GENE TAYLOR, Mississippi HOWARD COBLE, North Carolina
BRIAN BAIRD, Washington VERNON J. EHLERS, Michigan
TIMOTHY H. BISHOP, New York TODD RUSSELL PLATTS, Pennsylvania
STEVE KAGEN, Wisconsin PETE OLSON, Texas
MICHAEL E. McMAHON, New York
LAURA A. RICHARDSON, California
JAMES L. OBERSTAR, Minnesota
(Ex Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Allen, Admiral Thad, W., Commandant, Acting Administrator, United
States Coast Guard; accompanied by Master Chief Petty Officer
Charles W. Bowen, United States Coast Guard.................... 5
Brennan, Joseph E., Commissioner, Federal Maritime Commission.... 31
Creel, Jr., Harold J., Commissioner, Federal Maritime Commission. 31
Dye, Rebecca F., Commissioner, Federal Maritime Commission....... 31
Rivait, David J., Associate Administrator for Budget and Programs
and Chief Financial Officer, Maritime Administration........... 38
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Cummings, Hon. Elijah E., of Maryland............................ 42
LoBiondo, Frank A., of New Jersey................................ 45
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Allen, Admiral Thad W............................................ 47
Bowen, Master Chief Petty Officer Charles W...................... 57
Brennan, Joseph E................................................ 64
Dye, Rebecca F................................................... 71
Rivait, David J.................................................. 78
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
HEARING ON FISCAL YEAR 2010
BUDGET REQUESTS OF THE COAST GUARD,
MARITIME ADMINISTRATION, AND
FEDERAL MARITIME COMMISSION
----------
Wednesday, May 13, 2009
House of Representatives
Subcommittee on Coast Guard and Maritime
Transportation,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 2:00 p.m., in
room 2167, Rayburn House Office Building, the Honorable Elijah
E. Cummings [chairman of the subcommittee] presiding.
Mr. Cummings. This hearing will now come to order.
The Subcommittee convenes today to examine fiscal year 2010
budget request for the Coast Guard Federal Maritime Commission
and the Federal Maritime Administration. The President
requested just under $9.5 billion in fiscal year 2010 to fund
the United States Coast Guard. The request would provide an
increase of approximately $371 million, 4.1 percent, over the
service's enacted fiscal year 2009 budget.
The President request $6.55 billion for the Coast Guard
operating expenses in fiscal year 2010, an increase of more
than $361 million, or 5.8 percent, over the fiscal year 2009
level.
The President has requested just under $1.4 billion to fund
all planned Coast Guard capital acquisitions in fiscal year
2010, an approximately $100.6 million decrease from fiscal year
2009 appropriated level. Of this requested amount, $1.05
billion is requested for the Deepwater program, an
approximately $72 million increase from the enacted funding for
year 2009.
The budget requests only $344 million for non-Deepwater
expenses, including only $10 million for the repair of shore-
side facilities and recapitalization of aids to navigation. The
American Recovery and Reinvestment Act provided $98 million for
the rehabilitation of Coast Guard shore and Cutter assets, of
which the service has announced $88 million will go to shore
facilities. However, the service has a backlog of shore
facility repair needs exceeding $1 billion. And many Coast
Guard personnel continue to work in trailers or in rapidly
aging buildings. To be frank, some work is substandard
conditions and I continue to believe that this backlog must be
reduced to ensure that all Coast Guard personnel work in a safe
and modern facility.
The fiscal year 2010 budget request can accurately be
described as austere. While it would fund the operation of new
assets recently acquired by the Coast Guard, and would fund the
addition of 74 new positions in the marine safety function, in
addition to the 276 positions added in last year's budget, the
President's request does not appear to fund any broad, new
Coast Guard initiatives and even contains a slight reduction in
the service's overall authorization of military positions.
While we obviously strongly support the addition of new
personnel to the Marine Safety program, other mission areas are
also stretched and I continue to believe that the Coast Guard's
resources, particularly in the area of personnel resources,
must be more closely aligned with its mission.
The President requests $24.5 million in fiscal year 2010
for Federal Maritime Commission activities, which is an
increase of approximately $1.7 million, 7.5 percent, over the
total amount enacted in fiscal year 2009 for the Commission.
The Commission is typically composed of five commissioners
appointed to five-year terms by the President, with the advice
and consent of the Senate. The Chairman's position has been
vacant since 2006, one commissioner resigned in 2008. Next
month a new commissioner will leave the Commission when his
five-year term expires. His departure will leave only two
commissioners to be responsible for the management of the
agency.
The effective administration of the Commission has been a
major concern to the Subcommittee. The economic downturn in the
world, the economy is reducing shipping volumes which may
create a new regulatory issue for the Commission to consider.
We look forward to examining these issues today.
Regarding the U.S. Maritime Administration, the President
has requested $345.5 million in fiscal year 2010 provided in
fiscal year 2009. The largest increase occurs in the request
for MARAD's operations and training budget, which would grow by
$29.5 million. This account supports the U.S. Merchant Marine
Academy, provides limited support for the State Maritime
Schools, and funds MURAD's operations.
I am pleased that the President has requested $124 million
for the Maritime Security Program, which provides direct
payments to United States flag ship operators engaged in
foreign trade to ensure that these vessels are available to the
Department of Defense in time of war or national emergency. I
strongly support this funding as it is critical to the
preservation of our U.S.-flagged ocean-going fleet.
The President did not request funding for the Assistance to
Small Shipyards program in fiscal year 2010. MURAD received $98
million from the American Government Investment Act to make
grants under this program. The agency has already received more
than 400 grant applications totaling more than $1 billion. Such
a large number of applications demonstrates a wide demand among
small shipyards for modernization support.
The President requested only enough funding for the Title
XI Guaranteed Loan Program to enable MURAL to administer an
outstanding loan guarantees. No funding was requested to
support new loan guarantees was requested. Under this program
loan guarantees are available to those purchasing ships from
the United States shipbuilding industry and for the
modernization of U.S. Shipyards. The U.S.-flagged ocean-going
fleet is aging and the industry will likely need assistance if
these vessels are to be replaced with new, modern vessels.
We look forward to the opportunity today to examine all of
these budget requests. We thank our witnesses for being with
us. Admiral Allen, it is always a pleasure to see you, all of
your command, and all of the other witnesses.
With that, I yield to my distinguished Ranking Member,
Congressman LoBiondo.
Mr. LoBiondo. Good afternoon, Mr. Chairman. Thank you very
much for calling this hearing. Admiral Allen, Master Chief,
thank you for being here.
This afternoon the Subcommittee is reviewing the
President's request for the Coast Guard and Maritime
Administration and the Federal Maritime Commission. As of
today, there are only 170 days remaining in the current fiscal
year, which gives us very little time to act on the requests.
However, I appreciate the speed with which the Subcommittee is
considering the budget given how late it was submitted to us.
I have to start off by expressing my concern and
frustration with the Coast Guard's continued refusal to provide
the Subcommittee with a detailed explanation of how it plans to
utilize the stimulus funding that was provided by the Congress
earlier this year. The Subcommittee staff has requested this
information more than three weeks ago and we have been informed
that the Service is not authorized to make this information
available. I am not exactly sure what that means, Mr. Chairman,
but it means we are working without information that we need. I
do not understand how keeping us in the dark fits in with this
new way of doing things in an open and transparent manner. The
Service, however, submitted a full justification for its fiscal
year 2010 budget request.
The Coast Guard's scope of responsibility seems to grow
each and every year, and it is vital that Congress provide the
Service with the resources necessary to support all of its
missions. I have not been happy with the numbers in past years
because of the increased requests, in fact demands, that have
been put on the Coast Guard to do these additional missions.
The request includes funding for the recapitalization of
the Coast Guard's deteriorating assets. The assets are
increasingly unreliable, often suffering major failures while
in operation and having a significant impact on the Service's
operational capabilities, not to mention the potential to put
Coast Guard men and women in harm's way because of failure of
equipment. However, I remain concerned that the Coast Guard's
plans to replace these legacy assets cannot be carried out in a
timely manner in the current funding level of roughly $1
billion per year. For the foreseeable future the acquisition
budget is fully committed to the National Security Cutter, Fast
Response Cutter, maritime patrol aircraft, and sustainment of
the Medium Endurance Cutters. Unfortunately, that leaves little
room for the acquisition of offshore patrol cutters, unmanned
aerial systems, inland river tenders, Polar icebreakers, and
what I expect will be a frighteningly large and as yet
unbudgeted amount to keep the High Endurance Cutters afloat.
The Coast Guard needs to look at all of these planned
acquisitions and determine what mix of assets the acquisition
budget can support. And if more funding is needed, I humbly
request, I plead with the Service to tell us what that request
is, to tell us what we need to do. I hope our witnesses will
speak to the Coast Guard's strategy to overcome these
challenges.
The Coast Guard has also proposed to terminate operation of
the LORAN-C system, which provides positioning information to
commercial, recreational, and government aircraft and vessels.
I am extremely concerned this decision will leave us without
any backup to the global positioning system. Has the Federal
Government determined that no supplemental navigation system is
necessary? If that is the case, I would like that to be
explained. What happens if G.P.S. becomes temporarily or
permanently unavailable? What is the backup? What do we do? I
am getting questions from some ship captains from New Jersey
asking what the plan is and I cannot answer them right now.
Furthermore, although the Administration has touted a $36
million savings they expect from shutting down LORAN-C, the
Coast Guard has not developed an estimate of the cost
associated with environmental cleanup at existing LORAN sites,
nor has the Service determined what work would be necessary to
the existing infrastructure to support E-LORAN or some other
supplemental navigation system. I think these questions need to
be addressed before any action to dismantle LORAN-C is taken.
I am also perplexed by the Administration's request of zero
dollars for construction and maintenance of the Coast Guard's
shore-side facilities. The Coast Guard currently has a shore-
side backlog of over $1 billion. Coast Guard station housing,
hangars, and other support buildings are deteriorating as we
speak. Yet, no funding has been targeted for these projects. I
hope the Service has a good answer for us on how they intend to
manage this serious situation.
We will also welcome witnesses from the Maritime
Administration, the Federal Maritime Commission this afternoon.
I am pleased to see the President including funding to enhance
infrastructure at our ports to improve the security and
efficiency of cargo as it moves among different modes of
transportation. Our Nation's maritime highways are vastly
underutilized as an asset and I look forward to hearing more
from MURAD's efforts to increase the use of our inland rivers
and coastal routes as an alternative to our overloaded roads
and rails.
I am also interested to hear more about the FMC's ongoing
efforts to level the playing field internationally for U.S.
shipping interests and monitoring activities which impact
commerce at U.S. ports.
We once again, Mr. Chairman, want to thank you for holding
this hearing. I thank the witnesses for being here. I am
looking forward to their testimony.
Mr. Cummings. Thank you very much. Do other members have
opening statements? Mr. Coble.
Mr. Coble. I will not take five minutes, Mr. Chairman. I
thank you for calling the hearing. I will just say to the
Commandant and to the Master Chief that Americans continue to
be appreciative for the outstanding service the men and women
of the Coast Guard perform. I commend you two for a job well
done. Thank you, Mr. Chairman. I yield back.
Mr. Cummings. Thank you very much, Mr. Coble.
Admiral Allen, I would appreciate it if you would address
the stimulus question in your statement, if you do not mind,
the question that was just raised. It concerns me, too. So we
need to get that off the table.
We now will hear from Admiral Thad Allen, the Commandant of
the United States Coast Guard. He is joined by Master Chief
Petty Officer Charles Bowen. I want to thank you for being with
us also, Master Chief.
Admiral?
TESTIMONY OF ADMIRAL THAD W. ALLEN, COMMANDANT, UNITED STATES
COAST GUARD, ACCOMPANIED BY MASTER CHIEF PETTY OFFICER CHARLES
W. BOWEN, MASTER CHIEF PETTY OFFICER, UNITED STATES COAST GUARD
Admiral Allen. Thank you, Mr. Chairman, Representative
LoBiondo, and distinguished members of the Subcommittee. I am
pleased to testify on the Coast Guard's budget request this
year for fiscal year 2010. I have brief opening remarks and ask
that you submit my written statement for the record.
When I became Commandant in 2006, one of my primary
objectives was to evolve the Coast Guard into a change-
sensitive organization to modernize command, control, and
logistic support, to optimize workforce, and to improve
business practices. Building upon the Coast Guard's culture and
bias for action, we have made significant strides toward those
goals. Modernization remains Job One in the coming year as it
impacts almost everything the Coast Guard does. And as we have
carried out our modernization efforts, the dedication,
expertise, and professionalism of your Coast Guard has been
constant. Despite our Nation's economic struggles and the
numerous global threats we face, I believe the state of the
Coast Guard remains strong. The Coast Guard has never been more
relevant and never been in greater demand. The confluence of
globalization, expanding maritime trade, energy exploration,
and the tremendous value we provide throughout Government are
stimulating unprecedented demand for our services. Going
forward, we must ensure the Coast Guard has the resources,
authorities, and competencies in place to continue to answer
the call for our Nation.
The 2010 budget provides much of what I need to manage
safety and security risks in the maritime domain. As the Nation
struggles with the current fiscal crisis, we are prepared to
make difficult financial decisions to optimize our existing
resources. However, we can no longer do more with less. As I
told my folks at All Hands meetings and other fora where I
meet, we will allocate or resources to buy down risk in the
most vulnerable areas. But you cannot do more with less. You do
the same with what you have got and you accept risk where you
cannot act.
As I reflect on my tenure of service, I am filled with
pride and humbled to lead our remarkable workforce. Over the
past year our men and women, active duty, reserve, and civilian
and auxilliasts alike, performed with profound dignity,
courage, and sacrifice, as their predecessors have for two
centuries. They embody the highest ideals of public service.
Master Chief Bowen and I are concerned about the welfare of our
workforce. Retaining military and civilian employees and
attracting the highest quality workforce is the key to our
current and future success. I have embraced the goal of a
geographically distributed workforce and a diverse workforce. I
look forward to working with the Committee on several workforce
management issues, including opportunities to expand hiring
authorities to increase our competitiveness with other Federal
agencies.
I also welcome your interest in how we can improve our
accession program to United States Coast Guard Academy. I
believe we can establish a process that achieves our shared
goal of improving diversity by recognizing the value the Coast
Guard Academy brings to this Nation.
Guidance I provided during our review of the Management
Directive 715, reviewed last Fall, together with the recent
recommendations of the Booze, Allen, Hamilton report are being
implemented by our civil rights program. We have added six new
positions and reorganized headquarters staff to ensure all of
our people are in the most productive environment possible. And
earlier this week I approved a new field structure consistent
with the Booze, Allen, Hamilton recommendations.
As I mentioned, globalization is drawing the world closer
together. Force multiplying partnerships are increasingly
critical to protecting U.S. Interests around the globe. For
example, in the Pacific we are working closely with Canada,
Japan, and the Peoples Republic of China to halt illegal,
unreported, and unregulated fishing of tuna, a multinational
problem that taxes the global economy over $10 billion
annually.
Further, the Coast Guard law enforcement detachments
regularly deploy with U.S. Navy and allied vessels to counter
piracy and enforce laws and treaties. In Europe, we maintain
close ties with the shipbuilding industry to ensure new cruise
ships are safe. And in the central command area of operations,
our support to Operations Iraqi and Enduring Freedom safeguard
regional economic interests, build partner capacity, and bridge
divides between ministries of defense and interior throughout
the region. At home the maritime transportation system remains
the life blood of our national economy. In the United States it
carries 78 percent of our international trade, including 66
percent of all crude oil consumed, while generating and
sustaining thousands of jobs. I expect these trends will
increase in the next 15 years.
Growth of the marine transportation system has increased
demand for Coast Guard to conduct inspections, facilitate safe
and efficient vessel movements, and ensure security in an
increasingly complex port environment. Safety and security are
inextricably linked here and we need to bolster national
capability and competency. The President's budget requests $7.5
million to add an additional 74 marine safety positions in
support of Marine Safety Enhancement Plan. Included in this
effort is the establishment of several marine safety centers of
excellence, expertise that will ensure a collaborative national
approach to complex specialized areas of industry such as on-
and off-shore LNG terminals which are expected to grow over 200
percent in the next ten years. We expect to convene a cargo
security conference this Fall, Mr. Chairman, consistent with
our prior conversations.
Persistent threats including the specter of transnational
terrorism, increased sophistication and frequency in human
smuggling and drug trafficking , and steadily declining fish
docks continue to present operational challenges for Coast
Guard men and women. We must understand the most effective way
to protect our border. This would address threats long before
they make landfall. This requires an awareness of the maritime
domain coupled with the right mix of authorities, competencies,
capabilities, and partnerships.
The receding Arctic icecap is inviting more tourism, energy
exploration, and maritime shipping in this pristine
environment. There is water where there once was ice and the
Coast Guard has a burgeoning mission there. The signing of the
recent National Security Presidential Directive sets
interagency policy for the Arctic. However, our national
efforts would be significantly enhanced if we ratified the U.N.
Convention on the Law of the Sea.
We have significant issues with our High Endurance Cutters,
as was mentioned. As we speak today, four of the twelve High
Endurance Cutters, representing 33 percent of our long-range
fleet, are in dry dock or tied up for unscheduled maintenance.
We must do something to sustain this fleet. I have committed
base resources to do it and we must keep our promise to our
people.
Regarding the stimulus package, Mr. Chairman, Mr. LoBiondo,
we are under guidance right now that the amounts of funding
cannot be released. We will do that as soon as we can. That is
not a decision that is held or taken inside the Coast Guard.
In closing, I am grateful to help address these serious
issues. While there will be challenges as we move forward, we
have the right structure, institutions, and strategic approach
lighting our way. The fiscal year 2010 President's request
supports my efforts to modernize, manage our workforce, and
deliver the assets and systems needed to meet our future
mission needs.
I would add one thing since this is a MURAL hearing also,
Mr. Chairman. On Monday the Acting Administrator Jim Caponiti
and I met with General Duncan McNab, the head of the
Transportation Command, and Vice Admiral Bill Gortney, 5th
Fleet Commander from U.S. Central Command in Bahrain, with all
U.S. Flag shippers off the Horn of Africa. I want to
congratulate Mr. Caponiti on his collaboration and partnership
as we issued a new Maritime Security Directive that raise
security standards for U.S. Flag vessels operating in and
around the Horn of Africa.
I would be happy to take your questions.
Mr. Cummings. Thank you very much.
I am going to just ask a few questions. First of all, let
me say that I have often said that I am the Coast Guard's
biggest fan but also its biggest constructive critic. In the
area of fan, I was just recently in Brazil and Mexico, Panama,
and Colombia. I can tell you that the president of Colombia
basically said to us, a delegation led by our Majority Leader
Steny Hoyer, he said, I beg you to keep the Coast Guard
involved with us. And it was extremely complimentary to hear a
president of a country say those things. And we got the same
thing from the head of the military in Mexico. So I just wanted
to pass that along.
I am going to yield to Mr. LoBiondo and then I will come
back.
Mr. LoBiondo. Thank you, Mr. Chairman. Admiral, I
appreciate your comments concerning the details of the
stimulus. I understand that your hands have been tied on this.
Do you have any idea when we might get some details?
Admiral Allen. Sir, I do not. But at the earliest
opportunity we can provide it, we certainly intend to do that.
Mr. LoBiondo. Mr. Chairman, I would hope that we could
maybe talk to Mr. Oberstar and whoever is blocking the Coast
Guard from giving us that information that we might be able to
convince them that this Subcommittee is charged with overseeing
all Coast Guard personnel and programs. I think it is
unacceptable that the Coast Guard is being told that they
cannot give us this information.
Mr. Cummings. Will the gentleman yield?
Mr. LoBiondo. Yes.
Mr. Cummings. I will do everything in my power, because I
would like to receive the information also.
Mr. LoBiondo. Thank you, Mr. Chairman.
Admiral Allen, I wanted to talk to you about LORAN-C for
just a minute. I talked about it a little bit during my opening
statement. Do you think the Administration has determined that
there is no longer a need for the supplemental positioning
system?
Admiral Allen. Mr. LoBiondo, what the Administration has
done in the budget proposal this year is separate the issue of
the continued operation of LORAN-C from the issue of whether or
not G.P.S. requires a backup and what that backup should be. A
year ago there was some discussion that the current LORAN-C
system could be migrated to E-LORAN which could serve as a
backup to G.P.S. With the rapid deterioration of our LORAN-C
system, including four stations that are currently operating on
vacuum tube technology, the decision was to proceed with the
decommissioning of the LORAN-C chain and then revalidate the
requirements for a backup for GPA, whether it would be LORAN or
something else, and that would be done at the Department of
Homeland Security level. So we are proceeding with the
decommissioning of LORAN-C consistent with that policy
decision.
Mr. LoBiondo. Understanding the system has challenges, can
you comment on your views what would happen if G.P.S.
information became unavailable on a temporary or longer term
basis and LORAN-C was not available.
Admiral Allen. Yes, sir. Speaking from just a maritime
point of view, the Coast Guard sort of represents the
stakeholders, loss of G.P.S. is a loss of one form of
navigation. Navigation of a ship is the responsibility of the
owner-operator or the master. There are other means by which
they can determine their position whether it is visual lines of
sighting, radar, and other sensors that are on the ship. The
understanding is the loss of G.P.S. does not render the vessel
unable to navigate. There are other means at their disposal if
G.P.S. were not available. Some other input that I have
received is there would be some degradation over time to the
current locating position systems that are used out there. I am
talking about the automated identification system and long
range information and tracking which rely on G.P.S. to identify
the position of the vessel and then transmit that to other
vessels and other users in the area. At some point that would
be degraded as well.
Mr. LoBiondo. Admiral, could you talk a little bit about
how the Coast Guard will address the rapidly decreasing
readiness of the 378 foot High Endurance Cutters?
Admiral Allen. Yes, sir. First of all, we prioritized our
maintenance programs. These vessels, we are not really talking
about deferred maintenance here or maintenance that we would
like to do, we are talking about things like watertight
integrity, fire safety, actually the ability to operate the
vessels in a safe manner. We recently took the Dallas and the
Gallatin out of service. We took the Dallas out of the water
just this last week and found three penetrations in the hull
that we did not know existed and we are likely to find more as
we do a survey of the hull. These vessels had their service
life extended in the late 1980's, early 1990's. It was intended
to be for 15 years while we proceeded with the Deepwater
program. The service life of these ships and the Deepwater
program have not matched up. These are the only long-range
vessels that we have that are capable of extended operations at
our EZ and beyond. So we are talking about required presence in
the Bering Sea or down off Colombia supporting our Colombian
partners interdicting drugs. These become the primary platform
because of their endurance or staying power and the
capabilities they have out there. So this is a significant
mission degrader. And it is important enough where I will
reprioritize internally to keep these ships safe so our Coast
Guardsmen can operate on them and also because the Country
needs those hours out there, sir.
Mr. LoBiondo. OK. Thank you, Admiral.
Master Chief, I have some questions but my time is ready to
expire. So, Mr. Chairman, maybe on round two.
Mr. Cummings. Thank you very much.
Mr. Taylor. Mr. Chairman. Commandant, thank you again for
being with us. Thanks for what you do. And your driver after
Katrina, Dwayne Diaz says hello.
As you know, I was very disappointed in the Coast Guard's
failure to enforce the Jones Act regulations on a vessel that
was rebuilt in China recently. We supplied to the Coast Guard
photographs that proved beyond a shadow of a doubt that what
went on was not emergency repairs; it was literally the total
rebuild of a ship. This was a vessel that was flying under the
American Flag done in China. And nothing happened. I am
curious, with the change in Administration, is it your
intention to continue to ignore those laws or are we going to
start enforcing that?
Admiral Allen. Sir, it has never been our intention to
ignore laws. I have been briefed many, many times on the Jones
Act and every time I think I understand it I get more confused
after some of these briefings. There are issues that the Coast
Guard is responsible for and there are issues other agencies
are responsible for. But based on the criteria that has been
established, and unless we want to consider a statutory change
to that, we have been applying those criteria the best way that
we know how to make these determinations. It appears over the
years it has been a very great sense of frustration for the
Congress, and for you particularly, and for us trying to
discern this. I would really appreciate some statutory
clarification if we think that is the best way to go, sir.
Mr. Taylor. I appreciate that. And Commandant, I want to
mention to you, and I am not going to give you a name, but one
of your admirals went so far as to say the Jones Act is an
antiquated law that we feel like we do not need to enforce.
Again, I want to remind you that is not subject to the
interpretation of the individual Coast Guardsman. If it is the
law, it is the law.
Admiral Allen. Yes, sir.
Mr. Taylor. Secondly, it has recently come to my attention,
we had a shrimp boat sink off the Mississippi coast, another
vessel hit it, unmarked, in speaking with the Group Commander
in Mobile and basically was told it is not our responsibility
to mark it, even though the Coast Guard rescued the crew of the
sunken boat and knew it was there. Particularly since you were
good enough to spend a lot of time down in that region and in
that time down there I am sure you got to know a lot of
fishermen who realize that a lot of those guys lost their
homes, that the boat became their home and then when they lose
the boat they have got nothing. They do not have a thousand
dollars to go mark where that boat sank. With that in mind, I
would ask that the Coast Guard would be more flexible in the
decision for marking these wrecks when they occur, particularly
if they are in an area where a sizeable number of vessels
transit. Now the vessel that hit it was going seven knots. A
steel boat gets scratched up, the guy's pride gets hurt. If it
had been a fiberglass boat going 30 miles an hour in the same
circumstances, we probably would have been attending a funeral.
So again, I realize the number of restraints that you have. You
are being asked to do a lot of things. But I also think that as
stewards of the taxpayers trust, we ought to be using common
sense whenever we can. And I think the common sense rule would
have been, hey, this fisherman does not have any money, he is
not going to mark it, we as a Nation ought to remark it. I
welcome your thoughts on that.
Admiral Allen. Yes, sir. I am not familiar with the
individual circumstances of the case. We have many, many cases
where we will rescue somebody, cannot go in with a boat,
usually we put out a broadcast. If it can be lit or marked, it
is. The responsibility to do that depends on the circumstance.
And I would be happy to look at the individual circumstances in
this case and provide you an answer.
Mr. Taylor. Again, I would hope as a policy FE if we know
there is a wreck in a highly transited area and that the
probability is that someone is going to hit it, then I think it
would be prudent for us to have a policy, a common sense policy
that says it ought to be marked with some sort of a device so
the next guy will not hit it again.
Admiral Allen. Yes, sir.
Mr. Taylor. OK. Thank you, Mr. Chairman.
Mr. Cummings. Thank you very much. Mr. Coble.
Mr. Coble. Thank you, Mr. Chairman. Admiral, thank you for
your testimony. In your testimony you indicated that this
budget provides much of what you all need to accomplish the
Coast Guard's many missions. Are you suggesting that there are
additional resources not contained in this budget that you need
to fulfill your duties?
Admiral Allen. Mr. Coble, I would say, in general, there
has never been a budget that is big enough. So we always have
unmet needs. We also understand the current fiscal environment.
Tough choices have to be made and Government has to take a
position along with everybody else to be responsible in moving
forward. Are there some things we would like to have in this
budget? Sure. Can we proceed with the critical recapitalization
issues that we need to take care of? Yes. Can I operate the
Coast Guard with the operating funds? Yes. Am I going to have
to make choices about how I maintain 378s versus some other
part of the Coast Guard? I will probably have to do that. But I
am prepared to make those choices and move forward at this
funding level, sir.
Mr. Coble. Now that you have the benefit of the podium,
would you like to specify any of those resources that may be
missing that you would like to be included?
Admiral Allen. I can talk in general terms, sir, and not
get involved in any particular budget year levels. First of
all, our fleet is older, more expensive, and current services,
or even inflated cost of living, current services is not enough
funds to support the fleet the way it is right now. The real
issue is we need to retire these expensive vessels and get them
replaced with the new ones. In the meantime, we have to manage
that gap. That is what I get paid to do and that is what we are
doing. We make the tough decisions. We take care of the Dallas
and the Gallatin because our people deserve that. Are there
other places we would spend money if we were not spending it on
that? Yes, there are. But the highest priority is safety of the
vessels that we operate out there. That is my challenge. In
general, the maintenance accounts for our vessels, we could
always use more money there. In general, in our acquisition
programs, buying more and sooner is cheaper under a fixed cost
environment. You cut costs, you do not break production, you
get the assets sooner, and you get them at a better price.
Mr. Coble. I thank you, Admiral. I yield back, Mr.
Chairman.
Mr. Cummings. Thank you very much. Mr. Kagen.
Mr. Kagen. Thank you, Mr. Chairman. Thank you for being
here. I really appreciate the work that you are doing. I really
appreciate the Coast Guard. I am going to be very helpful by
pointing your attention to the backlog in medical reviews for
mariners. You have a system now in place that has created such
a backlog that people are having a hard time gaining full
employment. I am just curious as to what you are going to do to
remedy that, and hopefully appreciate that when a physician
examines a patient that you might give that examination and
determination more credence than somebody who has not.
Admiral Allen. Sir, actually while we have had a backlog, I
think in the long run we will improve service in the
performance of the organization. The review of those medical
records has taken place regionally at our regional exam centers
with not a lot of consistency of the criteria being applied
across those. In fact, a very legitimate point was raised about
some of the medical records associated with the pilot of the
Cosco Busan which were being managed locally and not centrally.
We were in the process of centralizing all those records in
fact when that event occurred. What we have now is a
professional cadre of medical professionals in one place that
are reviewing all the records for consistency. The issue that
caused the backlog was a low estimation of how many records
would actually be brought to the central location. We are
pretty much through that backlog right now. We are targeting
individuals that need to get their licenses and get working. We
are cueing those up to the front. We have gone a long way
towards reducing the backlog, and I would be glad to give you a
detailed answer for the record. We have got the right fix in
place with the right professional eyes looking at those
records. It is a matter of just getting that backlog down and
just managing the day to day, sir.
Mr. Kagen. Thank you for your attention to that. I yield
back.
Mr. Cummings. We are going to break because we have three
votes. But let me ask you this before I leave. What is
happening with the pool down there in North Carolina?
Admiral Allen. The rescue swimmer facility, sir?
Mr. Cummings. Yes.
Admiral Allen. Proceeding. I will give you the dates
exactly, timing for it and everything. We will give you that.
Mr. Cummings. The reason why I asked that question is
because I think in this Country we have to be very careful.
When Mr. Coble asked you about the budget, I think we have to
be very careful to make sure we get what the Coast Guard needs.
I will never forget visiting that pool, the rescue--what do you
call it?
Admiral Allen. The rescue swimmer facility, sir.
Mr. Cummings. I will never forget it. And to know that our
young men and women had to almost go to that facility 24 hours
a day because it was not big enough. And I have said it over
and over again, I am not knocking you, Admiral, because I know
you have been fighting for it. But everywhere I would go I
would talk about that pool because to me that leads to the
culture of mediocrity.
Admiral Allen. Yes, sir.
Mr. Cummings. Where you have got people who are brave,
courageous, wanting to be the best they can be, patriotic. I do
not care who you are, your son or daughter go there, they come
to one of our academies or to one of our services and they bare
supposed to be trained or whatever, we want them to have the
best, we want them to live in decent facilities, and we want
them to feel good about themselves. That is taking nothing away
from the Coast Guard. It is like I said, we are the ones who
are going to fight. I know you are in kind of a difficult
situation here. You have got the President's situation saying
we have got to cut back, and I understand that, but you also
have a duty to carry out the duties of the Coast Guard. So we
understand the bind that you kind of get into. And some way we
have got to find a point where we say OK, certain things maybe
we can cut back on, but there are certain things we simply
cannot. And I was just thinking of one of the things that we
also have to do is we have to move more and more towards
innovation. I heard you talk about the medical records. We have
got to do those kind of things because I think those are the
kinds of things that are going to make us more effective and
efficient.
So with that, we will resume in about half an hour. I sorry
about that but it is unavoidable.
[Recess.]
Mr. Cummings. Welcome back. Mr. Bowen, please proceed.
Master Chief Bowen. Good afternoon, Mr. Chairman, Mr.
LoBiondo, distinguished Members of this Subcommittee. On behalf
of the over 51,000 men and women who comprise active and
reserve components of our service, I would like to thank you
for your support and continued efforts to help us position
America's Coast Guard to be ready to answer the call and
execute the mission.
The Coast Guard recently adopted a service-wide ethos along
with our core values of honor, respect, and devotion to duty.
The ethos provides a constant reminder to our people of the
noble calling of this organization and the reasons why we serve
and the critical importance of our mission. We call it the
Guardian Ethos: I am America's maritime guardian. I serve the
citizens of the United States. I will protect them. I will
defend them. I will save them. I am their shield. For them, I
am semper paratus. I live the Coast Guard core values. We are
the United States Coast Guard.
A few months ago I attended a memorial service out at Coast
Guard Air Station Barbers Point for the crew of the Coast Guard
helicopter 6505. That helicopter crashed off Honolulu, Hawaii
September 4th of last year. All four crew members lost their
lives. The crew members were Captain Thomas Nelson, Lieutenant
Commander Andrew Wischmier, AMT2 Joshua Nichols, and ASTI Dave
Skimin. As I talked to their families and listened to the words
of those who knew them at the memorial service, I thought about
the Guardian Ethos. Our members are now required to memorize
those words in recruit training.
At the time of the 6505 crash, Coast Guard Cutter AHI, out
of Honolulu, got underway to search. There is nothing more
devastating than searching for your own. Their newest guardian,
almost straight from recruit training, started reciting the
Guardian Ethos and then the rest of the crew joined in. And I
thought about why the AHI did that, and I think the answer is
that sometimes, particularly difficult times, we as human
beings need to be reminded of our core purpose. The ethos is
who we are, why we serve, and why the crew of the 6505 and
countless others before them have sacrificed.
Our people live and work in hard, difficult, often
dangerous environments, and while they perform their duties
their families need to be taken care of. Along these lines, I
have been concerned for some time regarding the state of Coast
Guard-owned housing. The vast majority of Coast Guard personnel
reside in private sector housing. However, there are some
locations where private sector housing is insufficient and it
is necessary for the Coast Guard to provide quarters.
As you know, we operate in many remote coastal regions
where private housing is unaffordable for our members or even
unavailable. Currently, the Coast Guard owns over 4,000 family
homes and 227 unaccompanied personnel housing facilities,
otherwise known as barracks. The average age of Coast Guard
housing is 40-plus years and we have an excessive maintenance
and recapitalization backlog. Housing competes with other high
priority projects, including pier and hangar repairs, among
others. We work very hard to allocate funding to the highest
order needs and sometimes non-operational support requirements
just do not fare as well. In my judgment, the use of public-
private venture authority, PPV, has almost completely
transformed the military housing landscape for the DOD military
services. Over 80 percent of the Army, Navy, Air Force and
Marine housing inventory in the United States have been
upgraded from largely substandard condition to new, modern
upscale housing. The quality of life for military families has
increased by leaps and bounds.
We have, the Coast Guard, more than 12,000 members and
families living in our aged housing, some of which in my view
are still substandard. These houses are expensive to maintain
and have frequent maintenance issues. For these members and
their families the contrast in the quality of life is now
inescapable. The Coast Guard's PPV housing authority lapsed a
couple of years ago and prior to that lapse 2006 changes to PPV
scoring methodologies challenged the Coast Guard's ability to
execute large scale PPV partnerships. Providing the Coast Guard
with this authority and giving the Coast Guard an additional
tool and greater flexibility to tackle our housing challenges,
PPV can make a huge difference in the lives of our people. With
your support we will be successful.
Mr. Cummings. Mr. Baird.
Mr. Baird. Thank you, Mr. Chairman. I thank our witnesses
and I thank you for your service to the Country. We are honored
to have a number of your folks serve in our district at Cape
May. You do a great job out there and save a lot of lives.
Admiral Allen, you mentioned earlier right before the break
about the choices you make with budget. We just heard some of
the challenges. One of the issues in our district is the
proposal to move a LNG tanker facility onto the Columbia River.
One of the concerns I have had about that is that in order for
it to be managed safely there would be a need for additional
Coast Guard assets. Having served on this Committee for a
while, I do not know where those assets would come from. How do
you deal with that, sir, when you are asked to make reports
about the safety of a vessel of some sort, how do you manage
the issue of saying, well, theoretically, it could be done when
you may not actually have the assets. I wonder if you could
comment on that.
Admiral Allen. Yes, sir. And I thank you for the question.
Frankly, that question has arisen almost every place in the
country where they are looking at either an offshore or inshore
LNG facility, and the Chairman and I have actually had this
discussion as well. Our role as a cooperating agency in the
permitting process, in this case it would be the Federal Energy
Regulatory Commission for inshore, I think you are probably
talking the Bradwood facility in this case?
Mr. Baird. Yes, sir.
Admiral Allen. It is to make a determination regarding
security and safety in the operation not only of tanker transit
but in the facility itself and to make recommendations on the
permitting process. That sends a waterway suitability
assessment. Our job is to say it is either safe and secure or
it is not. Sometimes we say it is not safe or secure but could
be made safe or secure with the following measures that could
be enacted, and that could be for the transportation higher
security measures, or maybe perimeter security measures for the
facility itself.
We get in the horns of a dilemma here when you start
talking about the sourcing of the security. OK? We want them to
be safe and secure. I have said at other hearings if a
condition of our waterway security assessment, our
recommendation was that whatever recommendation we made had to
be sourced by the Coast Guard, I would have no reason to ever
approve another permit or recommend the approval of a permit.
That said, I think we need to have a discussion about who bears
the cost of security because that is really where we are going.
Now once you decide it can be safely and securely operated, who
should bear that cost? Personally, I think that ought to be
passed on to the consumer in the price of goods. I think there
is a role for the United States Government and the Coast Guard
to establish standards, make sure they are complied with, and
make sure that security and safety goals are met. But if we
start having to earmark a portion of Coast Guard effort in a
particular command area, they are going to have to start making
trade-offs about which mission they are going to support or not
support that day. That takes away the inherent flexibility
which I believe is the genius of our organization to allow
field commanders to manage risk and allocate resources to the
highest need.
I did not give you a real clear answer there, sir, but it
is that complex of an issue.
Mr. Baird. And that is the problem and I respect the
position you are in. My concern is if you are asked to make a
decision could this be safe and you decide yes, and therefore
people go and say, OK, we can site it, but the yes was
contingent upon the funding to provide the crew and the
equipment to do the escort. Once they have sited it, presumably
you have got to dedicate the equipment and crew to that
mission. And what other missions get sacrificed at what other
cost. That is our concern on this particular situation.
Admiral Allen. Yes, sir. Mr. Chairman, could I provide a
more extended answer.
Mr. Cummings. Please do.
Admiral Allen. Could I compare and contrast, because I was
at an extraordinary meeting on Monday regarding the protection
of U.S. Flag ships operating off the Horn of Africa. Over there
there are a number of ways you can protect a ship. But if you
get to the point where you need a security team, whether armed
or unarmed, it becomes a question of cost and sourcing. And if
you look at the area we are talking about other, some people
say it is the size of four Texas', and with only 15 ships in
that coalition task force you cannot be assured that we can put
either a ship alongside or an armed team on every vessel. For
that reason, I issued a maritime security directive on Monday
under my authority as the Maritime Transportation Security Act
competent authority to require anti-piracy plans in addition to
the vessel security plans that are required for vessels
operating in that area. It would have to be approved by the
Coast Guard up to and including security teams that could be
armed or unarmed. Now the inference there is that is the cost
of doing business and that could be passed on in the price of
goods. And whether they are under charter or transcommerce,
somebody else, there are ways to deal with the cost of that.
But I think the larger issue is how do we clear the cost of
security, who bears it, and who sets the standards.
Mr. Baird. I fully concur with that approach, both in the
Horn of Africa and on the Columbia River. I thank you again for
your service and your answers. Thank you, Mr. Chairman.
Mr. Cummings. Thank you. Mr. Larsen.
Mr. Larsen. Thank you, Mr. Chairman. Admiral Allen, I want
to thank you for your strong leadership on Arctic issues. My
understanding is that there is currently a staff level
agreement on the MOA with the National Science Foundation. Can
you give us an update on the status of that MOA.
Admiral Allen. Yes, sir. We provided guidance in the
appropriations report for the conference last year on two
things. One was to look at where the base money for ice
breaking resided, and two, to revise the MOA to make sure
National Science Foundation and Coast Guard were in alignment.
I recently met with Arden Bement, myself, and at that point
Acting Deputy Secretary Rambeers from Homeland Security. Mr.
Bement and myself are in agreement that the MOU as constructed
right now works for both of us. It is a useable document. One
we can move forward on. He also agreed that were the fund
transfer to take place between the National Science Foundation
and the Coast Guard, the National Science Foundation had no
objection to that and that was an appropriate thing to do.
Mr. Larsen. OK. I understand the Polar Sea will be underway
later this summer on an NSF science expedition. Were you all
able to secure an opportunity for polar sea crew training to
occur in combination with this expedition?
Admiral Allen. We will do some crew training. Not as much
as we would like. That is where we are currently constrained by
the base money residing in National Science Foundation but the
Coast Guard owning the vessel and the crew. There is a certain
amount of time you have to be underway to remain competent and
proficient and those number of days have dwindled each year,
and it is a concern.
Mr. Larsen. So is it dwindling this upcoming year compared
to last year then?
Admiral Allen. Yes, sir. I can give you a trend analysis.
We also had some engineering issues with the Polar Sea this
year that precluded her getting underway. But another thing is
when you do not operate vessels you are going to have more
engineering problems when you get underway because ships are
like people, they atrophy.
Mr. Larsen. Right. Right. So did I hear you then say on
this particular expedition this summer that you will have some
crew for training?
Admiral Allen. Yes, sir. We had to adjust the schedule due
to some mechanical issues on the vessel, but I can give you an
exact number of days for the record.
Mr. Larsen. Please do.
Mr. Larsen. Can you give a status on the Polar Star
sustainment efforts and estimate of the amount of work the Star
will need to become operational. I understand the 2010 budget
does not include any money for sustainment.
Admiral Allen. Yes, sir. We structured the contract for the
Polar Star so we had a series of options that can allow us to
do work with operations and maintenance money but keep separate
acquisition and construction money by contract line item
numbers and give us a menu of things we could do based on the
funding level we received. The current funding level for the
Polar Star is about $30.2 million which was provided to us in
2009. That is enough work to get us through fiscal year 2009
and 2010. But the entire amount of money to make Polar Star
operational is $62.8 million. So we have about a $32 million
shortfall right now. We will continue to work inside the
Administration, as we have with the new Arctic policy. But as
it stands right now, the work can continue but there is a
decision coming up on the other piece of funding
Mr. Larsen. For 2011 budget decisions?
Admiral Allen. Yes, sir. We would have a discussion inside
the Administration, sir.
Mr. Larsen. Right. OK. Chief, with regards to housing, the
housing issue, and potential or discussion about PPV using the
Defense model, have you look far into that? I know there is
some testimony and some other comments that the DOD model is
seen as the cat's meow. But where I come from we have had some
problems with it but we have worked through those problems and
it seems to be working pretty well now. To get something
started like that with the Coast Guard, what would that take?
Master Chief Bowen. In the past the Coast Guard had the
authorities but when we were preparing to execute, which was
around 2006-2007 time frame, there is a scoring methodology by
CBO that requires the entire cost of the private loan or the
private person that is in partnership with the Government to be
carried on the agency's budget.
In our case, at that time for several properties in Alaska
and Cape May it would have been about $200 million. Coast Guard
could not afford to do that. Defense had a huge project
cancelled several years ago and they were able to keep $8
billion in their budget as a line item, as a hedge against
anything going wrong with their PPV acquisition. There are a
lot of ways to do this. The first thing is we will be proposing
legislation that will give us our authorities back. We have to
have that so we ask for your support there.
We could also partner with PPV with DOD. We did that
successfully in Hawaii. But to do that, we actually had to
transfer our properties, 318 family homes in Hawaii, to the
Army. Now we have an agreement where we inhabit a inhabit a
certain amount of the new, renewed homes. There is some risk,
of course, involved with that in case the Army has some kind of
a surge requirement in Hawaii in the future. So, there is some
trepidation about going that way again.
But there are a lot of ways to do this. I have traveled all
over the Coast Guard. I have looked at these houses. In fifteen
years, it is like these ships, they are going to be falling in.
We have reduced the inventory to the point where they are only
there where we need them. But where we need them, we really
need them and we need to maintain them.
I can show you a house in Petaluma, California, a long way
from any public housing, where when it rains there is two
inches of water on the lawn and it sits there for a month. It
is just mud. The piping is substandard. It is always clogging
up. It is just old, costs a lot to maintain, and this needs to
be fixed.
Thank you.
Mr. Cummings. Let me make sure I am clear on what you are
saying before we go to Ms. Richardson. You are saying you would
like to have more money. I am hearing you. You know, I am
trying to say this in a nice way. We hear you. The last thing I
want is somebody living in a house that is going to fall in on
them and I know you don't. At some point, though, somebody has
to say to Homeland Security, to the Congress, and yes to the
President that we just want decent housing. I understand the
whole idea that you have got to kind of stay within certain
boundaries. But it makes absolutely no sense, none, to have
substandard housing for our people while at the same time we
are honoring them saying that they're the greatest in the
world, they have got a job to do. What I'm saying to is just
say it. Do you want it or not? When I ask you just now, you act
like you don't know what I am talking about. Help me.
Admiral Allen. This is where I do my job.
Mr. Cummings. Yes, please do your job. I'm not trying to be
so hard. I want to know.
Admiral Allen. Two things that are required to make this
program successful. If it is successful, it shifts a good deal
of the burden of investment in housing from the Government to
the private sector. One is the authority to have public/private
ventures. The second one under current CBO scoring standards is
to have an amount of money set aside in budget that is
basically an indemnifying the project in case something goes
wrong up front so they know who is bearing the risk.
So we don't need money for construction and appropriations.
We need authorization to enter into the ventures which requires
and then deal with the issue on CBO scoring up front and how we
can make that amount available to enter the venture, sir.
Mr. Cummings. Have you all ever made that known to us?
Admiral Allen. Sir, this has come and gone over the years.
I have been dealing with this for about 10 or 15 years clear
back to when I was a budget officer. The issue is always been
whether or not we can develop enough money out of our base
budget to hold that up to go ahead with the venture. What you
are doing is keeping money that could be used for something
else and abeyance and you can do this. It is a trade-off for
money that you don't get anything for. It's a very difficult
dilemma for us.
Mr. Cummings. Chief, I hope you didn't misunderstand me. I
wasn't trying to be smart. You gave some very compelling
statements and that's kind of what got me. I just want to make
sure because I know how you are. You are a very compassionate,
strong leader and you want the best for the men and women in
the Corps. So we just need to know what you need.
I am convinced that while you have been fighting this
battle for a long time, Admiral, maybe we need to join hands,
all of us, and say, OK, we are going to stop it right here and
try to get it done, whatever it is that we need to get done
based upon what you just said.
Admiral Allen. Yes, sir. I would be happy to participate.
Mr. Cummings. All right. Ms. Richardson?
Ms. Richardson. Thank you, Mr. Chairman. Actually, your
question rolled right into the question that I had for the
Master Chief. That question was, as I understand it, the Coast
Guard has a backlog exceeding $1 billion in unmet repair needs
throughout its aging shore facilities including its personnel
housing, air stations, sector offices, small boat stations, and
at the Coast Guard Academy. In many instances, the Coast Guard
personnel are living and working in buildings that are
substandard. Can you describe the extent of the need, which I
think you just did, and can you indicate the number and the
total cost of projects that could go to construction now if you
had the funding?
So if I understood you, Admiral, you are saying the problem
isn't that you have the funding, it is in the right category
and getting proper authorization?
Admiral Allen. Its authorizing legislation and then dealing
with the issue on CBO scoring of the money up front. Those are
the two things.
Ms. Richardson. Could you provide to this Committee, to our
Chairman, explicit language clarifying that? Also include what
particular sections of the categories that I listed, whether it
is housing, air stations, sector offices, small boat stations,
or the Academy, that would fall in that category that could
have the exchanges if you had this occur.
Admiral Allen. We can do that, ma'am.
Ms. Richardson. OK, thank you. My next two questions are
for the Admiral about a towing vessel regulation. Admiral
Watson indicated in an appearance before this Subcommittee that
the notice of proposed rulemaking to initiate the rulemaking to
bring towing vessels under inspection would be out in the
spring. The spring is here; what is the status?
Admiral Allen. The status is that we have drafted the
notice of proposed rulemaking and we are finalizing some
details and questions associated with the Department right now.
Ms. Richardson. So, what can we anticipate because the
spring is here?
Admiral Allen. As soon as we resolve the questions and the
issues between the Coast Guard and the Department we would hope
it would move forward, ma'am. We are right in the process right
now. I could tell you next week but if its not next week then I
would hate to commit because we don't have the paper in the
Coast Guard right now.
Ms. Richardson. Well with all due respect, this is I
believe May 12th and so the spring is here. So can we
anticipate it in the next thirty days?
Admiral Allen. I will be glad to carry that message back.
Thank you, ma'am.
Ms. Richardson. OK, can you follow up?
Mr. Cummings. Would the gentlewoman yield?
Ms. Richardson. Sure, Mr. Chairman.
Mr. Cummings. Admiral, how long do think it is going to
take? Let me say it to the gentlewoman. The Admiral is
reluctant to give a specific date because he knows that I am
going to hold him to it. So I'm just curious. The gentlewoman
was just trying an estimate.
Admiral Allen. No, I understand.
Mr. Cummings. Because Admiral, you will be gone in 2010.
[Laughter.]
Admiral Allen. Sir, technically it is not a date you will
be holding me to. Technically it is a date you are holding
myself, the Department, and OMB to.
Mr. Cummings. OK. I don't want you to go, but I'm just
saying.
Admiral Allen. Speaking collectively for the Government, I
can control one part of it but I couldn't tell you a date
because I don't control the entire process. That's the issue.
Mr. Cummings. All right. Well, how soon do you think you
can get us a date?
Admiral Allen. Well, I think I just told you in 30 days and
I am happy for the task.
Mr. Cummings. OK, we will give you 45.
Admiral Allen. Sir.
Mr. Cummings. OK, we will get it in 45. I yield back to the
lady.
Ms. Richardson. To build upon the Chairman's request, the
request would be either one, either giving us a date or giving
us a timeline of how you're going to get to a date.
Admiral Allen. Yes, ma'am.
Ms. Richardson. My last question is a general budget issue
because this is a budget hearing. The proposal before us is
relatively plain. The funding is providing for operation of new
assets that you have and acquiring them for a few ongoing
initiatives such as the effort to strengthen the Marine Safety
Program, which we obviously strongly support. However, few
brand new capabilities are being provided.
What level of additional personnel would you like to see
the Coast Guard attain to better align your personnel resources
with your mission objectives? Are there new initiatives or
capabilities that you believe the Services currently need that
are not funded in this budget? Finally, your budget request of
41.403 military positions would actually be a decrease of 24
positions below the enacted 2009 budget. Why is this?
Admiral Allen. Let me answer the last one first. Ma'am,
there are puts and takes related to decommissioning vessels and
aircraft before new ones come on. So that number can change
from year to year.
That said, we do know we have a workload coming that we
should be planning on that will require increases in the Coast
Guard. One of them is just what you mentioned. That is
enforcement of the towing vessel regulations. That will require
new inspections at frequent periods and a workforce ready to do
that.
So as we start looking at some of these rules coming
online, I can tell you if you are looking at demand that will
not be met, the first one I would give you it tow boat
inspections, ma'am.
Ms. Richardson. OK. So how are you going to achieve that if
you are requesting a decrease in positions?
Admiral Allen. Well, we are in a little bit of a chicken
and egg thing here. Until we get the regulation out and we know
what the requirements are, we can't go for the workforce to
support it. But I would anticipate coming in and saying this is
the increment I need in my workforce to support enforcement of
the towing vessel regulations.
Ms. Richardson. So for on the record, what do you think you
are going to need?
Admiral Allen. I would be glad to answer that for the
record, ma'am. Off the top of my head, I would have to go back
and talk to my experts on that.
Ms. Richardson. Can we get that in 45 days?
Admiral Allen. Yes, ma'am.
Ms. Richardson. Thank you, sir. That is all.
Mr. Cummings. Thank you very much. I still have a few
questions, Admiral. I want to just talk about acquisitions. We
have a hearing on acquisitions on March 24th to examine the
progress that the Service has made under your leadership in
modernizing its acquisition management capability, including
creating a new Acquisition Directorate and issuing and revising
the blueprint for acquisition reform. That said, there are
several issues of concern that I want to just ask you about.
Admiral Blore testified that all of the projects considered
to be a part of Deep Water, when combined with acquisition
activities that are also part of Deep Water such as program
management cost; systems engineering; and technology
obsolescence preventions programs, are currently estimated to
cost more than $26 billion to complete. The figure represents
an increase of $2 billion above the May 2007 baseline cost
estimate of $24 billion.
What do you estimate the full cost of the procurements
contained in Deep Water Program will be? What measures are you
implementing to effectively control the cost?
The reason why I am asking this, of course, is that the
President has made it clear that he is trying to reduce costs.
Deep Water, at the rate we are going, is going to be $2 billion
above that. It is possible, I don't know whether it is
probable, but it is possible that if it keeps going up at the
rate it is going that at the end of the Deep Water acquisition
period we won't have the kind of equipment we were bargaining
for.
As a matter of fact, I met with a team of manufacturers
today and I said to them, you guys have got to get innovative.
You have got to change the way you do business. All this cost
overrun stuff, you have got to be a lot more careful. You come
in, hypothetically, with a contract for $4 million and then we
end up spending $7 million. I think this President is basically
saying we have got to get a new culture. So I am just curious
where do you see Deep Water going?
By the way, I congratulate you on the efforts that you have
made within the Coast Guard to move more and more towards much
more effective and efficient acquisition process. But go ahead.
Admiral Allen. Yes, sir. First of all let me state a
general principle. Let me walk you through a couple of line
items that support that. The way to control cost is to do these
acquisitions better based on a particular asset with open
competition. Move into fixed price as soon as you can, removing
the risk from the Government.
What we have been doing over the last 18 to 24 months in
assuming the lead systems integrator role from Integrated Deep
Water Systems is to take each asset, separate it from the
system, rebaseline that asset, and where it isn't already under
construction to openly compete it. So the reason that the
change in the estimate occurred was we have taken every single
asset in Deep Water--the national security cutter, the coastal
patrol boat--and we have issued a new acquisition baseline
validating the cost and the performance.
So to date, I can give you them really quickly. These are
the projects that we have rebaselined so far as we move to be
the lead systems integrator: the national security cutter, the
coastal patrol boat which is just about done, the Medium
Endurance Cutter Mission Effectiveness Program, the Patrol Boat
Mission Effectiveness Program, response boat medium, the
maritime patrol aircraft, and Rescue 21.
We are in the process of taking each asset apart and
pulling it through a knot hole new acquisition baseline for the
following: the fast response cutter, the H-65 sustainment, and
the H-65J conversion.
In other words, we are taking every asset and doing an
evaluation on it. If there is still a decision to be made, we
are not going to execute that decision through Integrated Coast
Guard Systems. We will openly compete it, reduce the risk, and
get to fixed price. So while there has been adjustment related
to the early cost growth in Deep Water, some of that related to
the national security cutter, the best way to control cost and
reduce cost in the future is an asset by asset open
competition, fixed price, disciplined acquisition process. That
is where we are going, sir.
Mr. Cummings. Now, with the national security cutter, are
we at that point yet where we level off the course when it
began to go down a little bit? Are you following what I am
saying?
Admiral Allen. Yes sir, we are.
Mr. Cummings. Now that we have got the blueprints, we have
been working out all the little kinks. I am just wondering at
what point do we get to the point where we begin to see, not
savings, but at least leveling off.
Admiral Allen. Yes, sir. With hulls four and five, we are
there, sir.
Mr. Cummings. Say that again.
Admiral Allen. With hulls four and five, we are there.
Mr. Cummings. OK.
Admiral Allen. That is why it is critical if we can not to
break production between awarding the base contract for
construction of the fourth cutter and keeping the long lead
time materials in the works for cutter number five going off at
the same time so they overlap in the workforces employed, sir.
Mr. Cummings. OK. Mr. Hutton with GAO testified at our
hearing a few weeks ago before the Appropriations Committee,
Subcommittee on Homeland Security that in September 2008 after
conducting a full and open competition the Coast Guard awarded
a $88.2 million contract for the design and construction of a
lead fast response cutter. However, the Coast Guard does not
have an approved operational requirements document or test plan
for this asset.
Recognizing the risks that are inherent in this approach,
the Coast Guard developed a basic requirement document and an
acquisition strategy based on procuring a proven design. These
documents were reviewed and approved by the Coast Guard's
Capabilities Directorate, the Engineering and Logistics
Directorate, and the Chief of Staff before the procurement
began. According to a Coast Guard official, the Coast Guard
intends to have an approved operational requirement document
before procuring additional ships.
While I understand the urgent need to recapitalize the
Coast Guard's fleet, I am curious why the Coast Guard would
deviate from the MSAM process on this procurement, one of the
first that it is initiating and managing in house, totally
independent of the ICGS contract team.
Admiral Allen. Yes, sir.
Mr. Cummings. What was that about?
Admiral Allen. That is a fair question. There were two
competing dynamics here. One was the loss of patrol boat hours
from the 123s that were taken out of service and our need to
accelerate a replacement patrol boat. To mitigate risk, we put
out the solicitation for proposals for the fast response
cutter. We indicated there had to be a parent craft that was
already in service operating for a certain number of years some
place in the world where it was a demonstrated, proven design.
That would stabilize the requirements by the fact that a parent
craft had been operated. That was the risk mitigator shortening
the process we normally would have followed with an operational
requirements document. It was done because of the loss of the
patrol boat hours.
I would say that after they awarded that contract there was
a protest to GAO. That was denied. The Contract Court of
Appeals also heard the case and dismissed it with prejudice. In
our mind, that validates the procurement strategy. We believe
these are stable requirements. We will issue the operational
requirements document but for this particular case the need to
get this cutter built and into the hands of our people and the
stability that comes with a proven parent craft design, which
was a requirement, mitigates that risk, sir.
Mr. Cummings. I am concerned and this Subcommittee is
concerned about the Coast Guard's equal employment opportunity
services. Did you have any comments about that, generally?
Admiral Allen. Yes, sir.
Mr. Cummings. I know you got that report, didn't you?
Admiral Allen. Yes, sir.
Mr. Cummings. It was not very flattering to the Coast
Guard.
Admiral Allen. Yes, sir.
Mr. Cummings. Do you take any responsibility for that?
Admiral Allen. I am totally responsible. I am the
Commandant, sir. As I told you in the past, I am responsible to
take care of this as well.
Mr. Cummings. I am going to let you talk. I just want to
hear what you have to say.
Admiral Allen. Yes, sir.
Mr. Cummings. You can also tell us about what is going to
be happening with the Academy. We have been looking at the
numbers and it seems like, as far as African Americans are
concerned, we are going backwards.
Admiral Allen. Yes, sir. First of all, in regards to equal
opportunity and civil rights, we have for about six months been
looking at a number of issues related to that. That predates
the Booz Allen Hamilton report, which was issued after the
first of the year. I had personal concerns when I reviewed the
Management Directive's 7/15 report last fall, which is our
annual report that is due on equal opportunity.
There were some issues raised in there that caused me some
concern that we probably weren't doing enough robust barrier
analysis to entry into our workforce by our civilians. More
troubling, we actually stated in our report that we weren't
resourcing our Civil Rights Office.
The report was to me to sign leaving the Coast Guard. I
thought at one point about sending back and changing the report
but I think you and I would both agree that was disingenuous.
So in December of 2008 I signed the report and I gave a
direction to my Vice Commandant, the Chief of Civil Rights, and
the Chief of Personnel to address resource shortfalls,
organizational issues, and to come up with a plan to move this
program forward. The points that were raised in that review are
actually verified and ratified by the Booz Allen Hamilton
study.
So we have taken that for action. We have moved out
aggressively. I have approved a reorganization of the Office of
Civil Rights and the field organization structure. At the
hearing you held recently, we said that by the end of May we
would fill six positions. We have done that, sir. We have
provided about $750,000 to the Office of Civil Rights this year
to start doing manpower studies. Ms. Dickerson has been out
visiting the district office, socializing the field changes
that she has proposed. The restructuring of the Civil Rights
Office is exactly in line with Coast Guard modernization and
how we intend to do support services across the Coast Guard.
So we are moving out very, very strongly on all points. We
accepted the report. We saw where we need to make changes and
we are making the changes, sir.
Mr. Cummings. I have just two other things. We learned
during our hearing that you just referred to that the Office Of
Civil Rights had repeatedly requested additional personnel
specifically as documented in the Coast Guard's own MD715
report. I guess that is what you are referring to?
Admiral Allen. Yes, sir.
Mr. Cummings. The Office of Civil Rights had requested
additional funding in fiscal year 2008 for six additional
personnel to meet the field personnel resource level
recommended in the 2001 review of the Coast Guard civil rights
program. The funding request was not funded in 2008 and was
resubmitted in fiscal year 2009. Why was the recommendation
that was made in 2001 left unfulfilled for so long? That is a
long time.
Admiral Allen. Yes, sir. I would just say this: Again, I
wasn't in the position to go back and change that report
because it was submitted to me and I forwarded it on.
Mr. Cummings. You act like that is a big deal. I mean, I
wouldn't want you to change the report.
Admiral Allen. Exactly, sir. But what I was going to say
is----
Mr. Cummings. We are just seeking the truth.
Admiral Allen. We did provide resources over the last
several years that may not have been identified in the report.
That is what I saying.
Mr. Cummings. Oh, I see.
Admiral Allen. Yes, sir. In fiscal year 2004, we actually
added two GS-14 billets to both the Atlantic and the
headquarters EEO staff. Over the years, the problem is being
successful in an actual budget process for two or three
positions. That is very difficult to do, moving that out
through the Administration and OMB. So we have actually
reprogrammed some base resources over the years.
I would like to give you an answer for the record on where
we have done that. In addition to the six that we have just
provided, the entire strength before we provided the six was 45
EEO specialists and 14 support personnel. We have now added six
to that so we are up to a total of 66 personnel in the civil
rights program in the Coast Guard right now. I would like to
lay that out for you if I could for the record, sir.
Mr. Cummings. All right. During our last year we saw from
data provided by the Coast Guard--and this is just going back
to the Academy--that nine African Americans had been offered
admission to the Coast Guard Academy, Class of 2013. How many
of the nine individuals who were offered admission came from
the preparatory school and how many of the nine were direct
offers to individuals who had not previously attended the Coast
Guard preparatory school? And as of today, how many of the
African Americans have accepted the offer for admission?
Admiral Allen. Yes sir. Of the nine, four were direct or at
large, and four were Coast Guard Scholars coming from the
preparatory schools. As it stands right now, we have four
acceptances but the window has not closed and we are working
the kids as we speak, sir.
Mr. Cummings. And with regard to women, how are we doing
with regard to women in the Academy? I understand we are doing
pretty good there.
Admiral Allen. Yes sir. I would have to go check, I think
we are somewhere around 28 percent.
Mr. Cummings. I see. All right.
Mr. LoBiondo?
Mr. LoBiondo. Thank you Mr. Chairman. Admiral Allen, can
you talk a little bit about the current state of Coast Guard's
shore side support infrastructure? I talked about that a little
bit in the opening statement, my concerns for how you are going
to deal with that.
Admiral Allen. Yes sir. Are you talking about shore
infrastructure, buildings, and facilities?
Mr. LoBiondo. Yes sir.
Admiral Allen. As the Master Chief has stated, many of our
facilities are very, very old, 40 or 50 years old. Some of them
are actually historical buildings now based on the fact of when
they were built. Some of our SAR stations were actually built
in the 1930's during the WPA era. When I became Commandant, our
shore funding was around, I believe, $20 million a year. There
was a time right after we were awarded the deep water contract,
because of funding constraints, where the shore account was not
funded at all. In other words, there was zero money.
A couple of years earlier in the 2000 decade, I made it an
internal goal of mine to raise the recurring amount for shore
facilities to $100 million before I left as Commandant. I would
certainly like to see it rise higher than that.
If I could just make one clarification, there does not
appear to be shore money in the 2010 request but a good deal of
the $98 million provided for in the stimulus package will go
there once we are allowed to release the details. So I am
convinced that as far as establishing the $100 million goal
that we are substantially there for 2010.
We are also the recipient of several hundred million
dollars for hurricane repair money as a result of what happened
in the Gulf. Sometimes a storm helps you. If you have got an
old fallen down station, if it gets hit by a hurricane then you
have emergency supplemental funding and you can build that
station. Frankly, we have done that pretty much all over the
Gulf Coast right now.
So I would tell you, going through 2010, I am OK with where
we are at. I am not OK that we have solved the problem long
term and that we have got a wedge or a base in there that is
enough to sustain us. The floor ought to be $100 million a
year.
Mr. LoBiondo. I have just one more quick one before I go to
the Master Chief. What percentage of Coast Guard owned housing
would you say is in need of major repair?
Admiral Allen. I would almost refer that to our civil
engineers and give you a really detailed answer for the record,
sir. The Master Chief and I go out and we see them. If I were
to give you just an intuitive answer, if you will let me
correct it in case I am wrong, I would say it is probably in
thirds. We have a third that is really good; we have a third
that is kind of right in the middle, it is kind of OK; and we
have a third that you would really have to think twice about
whether or not that is where you would want to put your people.
Mr. LoBiondo. Master Chief, I think that----
Mr. Cummings. Would the gentleman yield?
Mr. LoBiondo. Certainly.
Mr. Cummings. We can do better than that. I know it is
upsetting to you all, but this is the United States of America.
This is not some Third World country where we can't provide our
members of the Corps with housing so they can have a decent
night's sleep and have a place to go to just rest. That is just
unacceptable. Really, it is just unacceptable. I think anybody
who will sit around and stand for that without fighting, there
is a problem. We are going to fight.
I think, I'm sure I speak for both sides, everybody is very
complementary of these folks but we have got to make sure that
we provide them with that housing. That is why I am so glad
that you said the things that both of you all have said. It
means a lot to me.
Thank you for yielding.
Mr. LoBiondo. Mr. Chairman, to further engage that fighting
spirit about which I am very happy to hear, maybe the Master
Chief can provide you with some photos that would give a clear
indication of just how terrible some of this is. Master Chief,
would that be a possibility?
Master Chief Bowen. Sir, that has already been provided. It
is in the package for each Member.
Mr. LoBiondo. OK. I think Mr. Coble is going to have a
question in one area of housing.
But I wanted to ask you, Master Chief, the housing is very
critical but in addition to the housing authorities, what other
authorities does the Coast Guard currently lack with parity
with the Department of Defense? Some of it maybe has to be
dealt with by statute and some of it maybe doesn't. We are
going to maybe need to know that. If that is not something that
you can answer today, maybe you can come back to us with a list
on what we can do because we are just short of money on what we
need statutory changes on to get ourselves parity with DOD.
Admiral Allen. With trepidation, I speak for the Master
Chief here. I would give you one kind of thematic issue, sir,
to deal with. It is something I deal with and something the
Master Chief deals with. This is not an act of commission. I am
going to say that right now because we love our DOD partners.
We fight and work together everywhere.
But in many cases when you are looking at Defense
Authorization, when they are talking about issues like family
programs or access say to child development centers and things
like that, if the language is not exact and precise about all
of the Armed Forces, which include the Coast Guard, which is in
DHS, we sometimes run into a barrier where there is an
unimplied but all of a sudden a legal constraint because the
terminology and legislation say Department of Defense rather
than Armed Forces. Sometimes this is one of those things where
if there is just better visibility and understanding, it takes
care of itself. Master Chief?
Mr. LoBiondo. Well, before we go to the Master Chief let me
just make sure I understand. So what you were saying is if in
the Defense Authorization Bill, which is going to being taken
up soon, if we are more precise with our language, this will
enable the Coast Guard to participate in a fuller way. Is that
what I am hearing you say?
Admiral Allen. Yes, sir. In cases where there is an
entitlement or a family program, there are times where we have
gone to bases and approached them and they will say, we
understand but you are not Department of Defense and that is
what the law says.
Mr. LoBiondo. This is very timely then.
Admiral Allen. I would ask the Master Chief to comment as
well.
Mr. LoBiondo. OK. Master Chief?
Master Chief Bowen. Recently Admiral Allen's spouse and my
wife met with Mrs. Obama and she asked those very same
questions. We provided her with a paper that definitely shows
that there is a gap in family program services between what the
Coast Guard gets and what the Department of Defense family
services are. That is just wrong. My wife hounds me up and down
about it.
For instance, I will just throw this out, the Department of
Defense is able because they have the money to engage in what
is called Military One Source which is a referral for many
different support services for military families. The Coast
Guard has a referral service. It is called EAP. My wife calls
it the economy model. This is one of the differences: With EAP,
you can get six referral visits to, say, get counseling for a
number of issues. With Military One Source you get 12, which
enables you to really get with a counselor and get to the meat
of the problem.
In this type of thing, we definitely need equity and we
need to move closer to equity. One of the things is language.
Another thing is we just need to work very hard to get funding
for our work/life programs.
Mr. LoBiondo. So there is a list you can provide us of the
authorities that we should look at changing?
Master Chief Bowen. Well, there is a paper that was given
to the White House regarding the parity issue. But I don't know
that it is specific enough for what you are asking.
Mr. LoBiondo. OK. Well, very directly with the Defense
Authorization Bill coming up we need to know what we maybe can
fix this year by language so we don't miss this opportunity
with the Defense Authorization Bill this year. I would be
willing to take that as a personal mission, being on that
Committee.
Admiral Allen. Yes, sir. We would be happy to create what I
will call the art of the possible this year. We will also give
you a copy of the paper that our spouses provided to the First
Lady.
Mr. LoBiondo. OK. Thank you Mr. Chairman.
Mr. Cummings. Thank you. Mr. Taylor?
Mr. Taylor. Thank you Mr. Chairman. Commandant, Chief,
thank you for sticking around. Master Chief, that was a great
statement you made a few minutes back.
Chief, I am curious in your travels. I also serve on the
Armed Services Committee. We are blessed with both Coast Guards
and a large contingency of Navy in my district. Several of the
Navy commanders have brought to my attention the high cost of
wind insurance for those people who live on the local economy.
Seeing as how the Coast Guard is in coastal America and that
the insurance industry has pulled out of costal America, do you
hear much of that from your folks who live on the local
economy?
Master Chief Bowen. Sir, I think it is a rising problem,
certainly. Say in Florida, many insurers have actually pulled
out of there. It is not something that is brought up to me
every day, but I am aware that it is rising problem because we
have to move our people there and they have to live there. So
they need to have affordable insurance.
Mr. Taylor. Commandant, the other day a professional
maritime operator stopped me and posed what I thought was a
very smart question. That is why do we this late in the game
still have two sets of rules for inland waters and western
rivers with two sets of lights and two different
documentations? Again, I didn't have a good answer for him,
quite honestly. So I am asking you, the expert.
Admiral Allen. I think the first time I had that question
was when I was trying to learn the rules of the road as a
Cadet. Can I go back and think about that? I am not sure that
isn't a good point.
Mr. Taylor. Would you have someone consider that? Because
again, I also had to memorize those rules many, many years ago.
I just wonder if it wouldn't make sense just to go to inland
waters for everything. Could you can get back to me on that,
again just in the name of standardization?
Admiral Allen. Yes, sir. The only comment I would make is
we do have a nexus now with the International Navigation Rules
and the International Regime as well. But I would be happy to
get back and give you some ideas on that, sir.
Mr. Taylor. All right. The third thing goes to the failed
123 Program. The more I learn about it, I have to admit that as
a taxpayer, the angrier I get. I will just say that up front.
Number one, it was a performance specification. Then when
the performance specification didn't work, we pay apparently--
and please correct me--we paid the contractor again to weld
some plate along the gunnels to try to stiffen the hulls. This
was to the tune of about $130,000 per boat times $8 million.
Then we apparently we took it to a second yard and had many of
these vessels replated, which I am certain with my limited
legal knowledge, I strongly suspect is going to void the
warranty at the first yard. That is just my opinion.
What is being done? Number one, that contract had to have
been horribly flawed for our Nation to have to pay that
contractor in the first place to make the changes to a
performance specification ship that didn't perform. You would
think that under normal circumstances that would have been
their cost to fix it and their cost to continue fixing it until
the ship worked. You would think someone in the acquisition
community would have said, don't take it to a second shipyard
because we may void our warranty.
What changes have been made? That is water under the
bridge. What changes have been made so that you can assure me
that this isn't going to happen again?
Admiral Allen. Yes, sir. We have had this discussion
before, sir. I think one of the frustrations you had, let me
talk about water under the bridge just for a little bit, I
think there has been general frustration in the Congress and
with everybody related Deep Water about what I would call a
single point of accountability. So you go back and find out
when the decision was made, who is accountable, why didn't they
perform, how you are going to hold them accountable, and what
you are going to do about it. It was so diffuse and the
contract structure was so vague about those types of
responsibilities that I am not sure we are ever going to be
able to figure that out.
One thing we do know, if you have a technical authority
established independent from the program people who are
acquiring the vessel who are the ones who have to certify that
the performance specification has been met in all technical
ways, whether you are talking about hull and engineering, you
are talking about the sensors, you are talking about even the
personnel accommodations associated with that, if there is a
separate technical authority that is warranted to protect those
interests then you get performance out of the acquisition.
The new acquisition structure we have formed places a
technical authority in a position to make sure the requirements
are met. Those are dictated to the program manager that has to
execute them to technical specifications.
Many times, in fact more often than not, we will pull in
partners to help us, whether it is the folks up at Carderock
with the Navy or the American Bureau of Shipping. We use a lot
of partnerships to ensure that the technical requirements are
met.
I believe that the modernized Coast Guard with the product
line management scheme that we have set up, the Service Forces
Logistics Center that we have now in Curtis Bay, is the right
organizational model that could have helped people or succeeded
at the start. I have held for a long, long time that if you are
going to award a contract to Integrated Coast Guard Systems you
had better damn well have an integrated Coast Guard. We did
not.
Mr. Taylor. As far as your legal staff, I really am amazed
that that contract was allowed to become law without someone
raising a flag that, hey, if they screw up building this thing,
they ought to pay. As far as the legal end of it, is that part
of--again, going forward--is that part of your contracting
psyche changed so that the next time we build a cutter?
Admiral Allen. Absolutely, sir. The other thing is, as I
mentioned earlier, it is getting out of a cost plus contract
environment to fixed price where the risk is assumed by the
contractor, sir.
Mr. Taylor. And going forward, that could be the case?
Admiral Allen. Yes, sir.
Mr. Taylor. OK.
Mr. Cummings. The gentleman's time is expired.
Mr. Taylor. Thank you, Mr. Chairman.
Mr. Cummings. Thank you. Mr. Coble?
Mr. Coble. Thank you, Mr. Chairman.
Master Chief, the distinguished gentleman from Washington
started the question on housing. The Chairman and the Ranking
Member picked up on it. I want to continue it because I believe
that second only to safety, I know of no more issue any more
pressing or important than housing. Good housing is a direct
contributor to high morale.
In your statement you indicated your concern, and I share
that concern, about the state of Coast Guard owned housing. The
average age is in excess of four decades and not unlike many
cutters in the Coast Guard fleet, getting older.
We have a good number of DOD bases in my State of North
Carolina and, as you know, in your State. But the Department Of
Defense has been very successful in using public/private
venture housing authority to improve the quality of their
housing facilities.
While I know you all have many demands on your budget and
that you may not currently have the resources to commit, would
reauthorization of public/private venture housing authority for
the Coast Guard be an important first step towards improving
the state of your housing and the quality of life for your
shipmates and their families?
Master Chief Bowen. Yes, sir. I thank you for the question.
It absolutely would. I would like to continue with saying that
public/private venture is now a proven way using mostly private
money to renew these houses. And that is, Mr. Chairman, the
reason why I probably looked a little taken aback when you made
your statement. It is because I didn't ask for money.
That is the beauty of this. It doesn't take a huge amount
of Government money. As long as there aren't failures, and
there haven't been, most of it is private money. It can be
done. They are over 80 percent complete, all houses in the
continental United States and DOD.
Mr. Coble. Thank you, Master Chief.
I will put this question, Mr. Chairman, to the Commandant
and/or the Master Chief. And maybe it has already been
answered. You all fielded a lot of questions today. But could
you all provide background information on your efforts to
privatize family housing and your requirements for achieving
parity with the Department of Defense? Could you all do that?
Master Chief Bowen. Yes, sir. We could.
Mr. Coble. Thank you, Admiral. Thank you, Master Chief. I
yield back, Mr. Chairman.
Mr. Cummings. Thank you very much. Mr. Larsen, you don't
have anything? Very well.
Thank you all very much. We really appreciate it.
We will now call the Commissioners of the Federal Maritime
Commission: Commissioner Joseph E. Brennan, Commissioner Harold
Creel, and Commissioner Rebecca Dye. Thank you all for being
here. It is my understanding that you will be speaking for the
Commission.
Mr. Brennan, Ms. Dye, and Mr. Creole if you have anything
to say, you are welcome to. Mr. Brennan?
TESTIMONY OF JOSEPH E. BRENNAN, COMMISSIONER, FEDERAL MARITIME
COMMISSION; HAROLD J. CREEL, JR., COMMISSIONER, FEDERAL
MARITIME COMMISSION; AND REBECCA F. DYE, COMMISSIONER, FEDERAL
MARITIME COMMISSION
Mr. Brennan. Mr. Chairman and Members of the Subcommittee,
thank you for the opportunity to present the President's budget
for the Federal Maritime Commission. Two other Commissioners
are here today, Rebecca Dye and the former and esteemed long
term Chairman who will soon be leaving the Commission, Harold
Creel. He is well known to many on this Committee.
The FMC is an independent regulatory agency with 120
employees. The main responsibilities of the Commission are to
first, enforce the commercial conduct in the transport of
containers internationally; second, to stop unreasonable price
fixing agreements of ocean carriers of marine terminal
operators; third to ensure that passenger vessels have adequate
financial resources to repay passenger deposits when a voyage
is canceled and to pay judgments for personal injury or death
of a passenger; and fourth, to take action against foreign
practices that are unfavorable to American shipping.
For the fiscal year 2010 the President's budget provides
for $24.6 million for the Commission. This represents an
increase of about $1.8 million. Most of our spending relates to
mandatory and non-discretionary expenses such as salary and
rent. The requested increase is due to two main expenses, pay
increases in benefits and funds to keep the Commission up to
date in information technology.
Now with regard to the state of the shipping industry, I
have a few key figures. Last year about 15 million containers
came in and out of the Country. About 2,200 container vessels
called at U.S. ports. The number one U.S. export by volume,
very sadly, continues to be waste paper. In fiscal year 2008,
the volume of U.S. container exports grew by 15 percent and
imports decreased by 6 percent.
However, the demand for cargo fell sharply last fall and
continued to decline this year. In February of this year 2009,
the total volume of U.S. container exports dropped an alarming
33 percent over February of 2008 while imports fell 25 percent.
With the decrease in demand, there is a surplus of vessel space
and freight rates have fallen. I would say several hundred
container ships lie idle now.
In the fall of 2008, the European Union repealed most anti-
trust immunity for container operations in the European trades.
The Commission will study the impact of Europe's action and
will share that study in a report to the Congress.
Over the past year, the Commission has continued to watch
and study international container transport as it relates to
the Shipping Act. We have focused on the competitive impact of
carrier or terminal operator agreements having rate making
authority or high market share.
The last time we were here, questions were raised about
employee satisfaction at the Federal Maritime Commission. I am
pleased to report that in the 2008 Federal Human Capital
Survey, the responses of FMC employees were again more positive
than the Federal average. For over 95 percent of the questions
asked, 71 out of 74, the responses of the Federal Maritime
Commission employees were more positive than the Federal
average. The 2008 Survey shows that FNC employees like the work
they do and improved the Commission's performance in
recruitment, employee development, and employee retention.
The Independent Partnership for Public Service has invited
the FMC to receive an award on May 20th of this year at the
release of the 2009 Best Places to Work in the Federal
Government, kind of a long way since a year ago.
The Survey results and the Best Places to Work award I
think confirm that the Commission is moving in the right
direction.
Mr. Chairman and Members of the Subcommittee, thank you for
supporting the important work of the Federal Maritime
Commission. I respectfully request on behalf of the Commission
favorable funding consideration for 2010. Now I and my fellow
Commissioners are ready to try to answer any questions you
might have.
Mr. Cummings. Mr. Creel?
Mr. Creel. Thank you, Mr. Chairman. I ask just a moment, if
I may. Mr. Chairman and Members of the Subcommittee, I am
pleased to appear before you today with my colleagues to
discuss the President's fiscal year 2010 budget for the Federal
Maritime Commission.
This will likely be the last time I appear before you as a
Commissioner since I will be leaving the Commission next month
to pursue new ventures in the private sector. It has been and
honor for me to serve on the Commission since 1994 and to serve
as Chairman from 1996 to 2002. I am pleased to say I was the
longest serving Chairman in the history of the agency, beating
out my good friend, Helen Bentley's record by a matter of a few
days. As you can imagine this is a thorn in Helen's side and
she hits me with her cane every time that I remind her of it.
Mr. Chairman, I would take this opportunity to thank you
and the Subcommittee for your support and guidance over the
years. I also want to impart to you my belief in the importance
of the mission of the Federal Maritime Commission, and that is
regulation of the ocean borne transportation and the foreign
commerce of the United States.
As an independent agency, the Commission is in the unique
position of ensuring that our Country's international trade is
fair and unfettered by noncompetitive conditions or the unfair
shipping practices of foreign countries. After all, the vast
majority of goods coming into this country come to this Country
on a ship. Most Americans don't even realize that. One reason
the consumers are not aware of that is because the industry
works. While occasionally there may be hiccups in the system
that cause delays, generally goods flow into the Country freely
and unencumbered. Therefore the American consumer has little
reason to inquire about how goods are delivered.
I want to take the opportunity to thank my fellow
Commissioners for many years we have worked together. You
should know that the staff at the FMC is an extremely well
qualified and dedicated bunch who are proud of the work they do
in the service of the Country.
Mr. Chairman, I wish you, all the Members of the
Subcommittee, and the Federal Maritime Commission fair winds
and smooth sailing. Thank you, sir.
Mr. Cummings. Thank you very much. Ms. Dye?
Ms. Dye. Thank you Mr. Chairman. I heard you mention
earlier the benefits of constructive criticism. I want to tell
you that we have taken your suggestions from the last hearings
to heart. I believe we have improved working conditions and
operational efficiency of the Federal Maritime Commission to
the benefit of the folks at the Commission and the American
consumer.
Thank you for having me here today. I want to compliment
Commissioner Creel. I know that I speak for everybody at the
Federal Maritime Commission that it is tough for us to tell him
goodbye. He has been an excellent Commissioner and Chairman
before my term. We appreciate his service. Thank you again.
Mr. Cummings. Thank you very much. I just want to thank all
of you for what you do. We thank you.
Mr. Creel, since you are leaving, I want to thank you. I
may not have a chance to do this again in a public forum like
this. I want to thank you for all that you have given.
This kind of service to the public is not always easy. I
think that you folks are exposed to the public, while they
could do some other job and nobody would ever have an idea of
what they are doing. But the fact is that you are giving a lot
and we do appreciate you very much.
I just want to ask a few questions. But first I am going to
yield to my colleague Mr. LoBiondo.
Mr. LoBiondo. Thank you Mr. Chairman. I too want to join
with you in thanking Commissioners for your work. I had a
chance to work with Commissioner Dye on the Subcommittee before
she moved over. Mr. Creel, I worked with you for a long time. I
wish you all the best. I thank you for your service. It is a
great record that you have accomplished. Mr. Brennan, I look
forward to continuing to work with you.
I had one question that you sort of addressed. That had to
do with the price fixing. I think you indicated that you are
going to be studying what has happened with the Europeans to
determine if that makes sense for us to proceed in that way
here? Is that what I understood you to say?
Mr. Brennan. Yes, the staff is working on that to analyze
what will the effect be, will it result in less service,
increased cost, or just what. So we are very conscious of that.
I think Commissioner Dye recently went to England to make some
observations.
Mr. LoBiondo. Commissioner Dye, do you have anything that
you would like to add? Because without studying it, it seems
like it is not necessary. That is the reaction that I have. I
would hope that we don't have some long drawn out study that
comes back and tells us that yes we can do this and find out we
maybe could have been saving money or encouraging more goods
transported.
Ms. Dye. Yes sir, I understand. I did have the benefit of
speaking in London to the Europeans about the recent changes in
their system, their elimination of the competition exemption
and how we could harmonize the two systems to make sure that
international ocean shipping proceeds unaffected. The
Commission has analyzed all of our existing agreements to make
sure that there are no problems between the two existing
systems.
Of course we deregulated substantially in 1998. So we like
to say we were actually ahead of the Europeans. A shipper
recently said to me while the Americans have allowed the
Europeans to kick in the door, we loosened it substantially and
they took it to the next step.
Of course we will be analyzing the benefits of the system
here. We won't take years. But we will have to get some
experience with the European system before we have good hard
data to analyze. Thank you.
Mr. Creel. Could I just add to that? One thing that sort of
clouds the issue at the moment is this economic downturn and
determining whether what the Europeans have done has resulted
in benefits to the consumer or not. Across the board the
numbers are down tremendously as Commissioner Brown just said.
It is not a market that we have seen in a long time and so I
think we have to be considerate of that in doing our study.
But we are just at the point now where we are laying out
the parameters. We will have two years, the first year of
experience under the European regime and then the second year
to be able to make up a realistic judgment as to the effect of
that.
Mr. LoBiondo. Thank you. Thank you, Mr. Chairman.
Mr. Cummings. Thank you. I want to go back to this 2008
Federal Human Capital Survey showing a 20 percent increase in
satisfaction with the practices and policies of the FMC senior
leaders, an 11 percent increase in job satisfaction, and a 17
percent increase in satisfaction with employee training. That
is simply astounding
One of the things that happens is that when people get used
to voting negatively, it is hard to get out of it. In other
words, there is a presumption that things are going to stay the
same so people have a tendency to vote the same way no matter
how much you do. First of all, I congratulate you all because I
know you all worked so hard on that. I'm just wondering what do
you attribute these increases to? Anybody want to go first? Ms.
Dye, I see you smiling.
Ms. Dye. We all worked very hard Mr. Chairman. For myself,
I think that we have a greater openness at the Commission in
our decision making process. We have worked hard together to
reach the best decisions for the Commission and their staff.
The most important thing that I was pleased to see is that we
began regular open meetings.
Our decision making process is open and everybody is heard
before we reach a decision. Of course not everybody's opinion
is accepted but everybody's opinion is heard at those times.
And we all get the benefit of those. If I had to point to one
most important change I would say that is it.
We also filled a lot of personnel positions. We got staff
back up as quickly as we could. We filled a couple of important
positions with excellent folks.
Right off the top of my head I would have to say those are
the things that I would point to first. Thank you.
Mr. Cummings. Mr. Creel?
Mr. Creel. Yes, sir. I think that as Commissioner Dye says
we have been open.
As you said, you can continue along your way doing the same
thing in the same way and think that you are getting the word
out that we value the work of the staff. But sometimes that is
not the message that is being received. I think that it takes
an initiative to make them realize that and to be proactive in
that.
We have done that, whether it is through the SES Candidate
Development Program at the very top, or whether it is our
Emerging Leaders Program at sort of mid-level, or the term of
ours is upward mobility for the GS-9 and below. I use upward
mobility broader than that in speaking.
Upward mobility has been one thing that I have been very
concerned about because we are a very small agency. It is
difficult to give people encouragement that they can move up.
But we have seen that in the last year and we have made a
concerted effort. You can't make jobs out of something that is
not there but you can be cognizant of it whenever there is a
job opening. And we have seen that over the last year. We have
had folks moving into positions who have been with the
Commission for a long time and tapped out at a certain level.
They then been able to move up into a more professional level.
And that is very rewarding, not only to that person but I think
to others who see that.
Mr. Cummings. We will get to you in a moment, Mr. Brennan.
What you just talked about Mr. Creel is something called
hope, really. When people feel that they can move forward, even
if they don't move forward, if they see somebody in their
sphere moving forward I think the natural inclination may be
some envy. But then they back off and they look and say, you
know what, it is probably a good decision that Mary moved up.
But you know what, I'm going to be the next one.
But if they never see that, then the question is do I stay
where I am or do I move on?
Mr. Creel. That is when you lose some of your best.
Mr. Cummings. Right. Then they say, I only have one life to
live. This is no dress rehearsal. This is that life. So since
this is that life, I am moving on.
Mr. Creel. Excuse me, sir, but I would just point out here
that the response to one of the questions was that ``promotions
in my work unit are based on merit.'' We went up 24.2 percent
in that category.
Mr. Cummings. Say that one more time.
Mr. Creel. ``Promotions in my work unit are based on
merit,'' there we are 24.2 percent increased.
Mr. Cummings. What you just said is very powerful. People
want to know if they put out the effort somebody is watching
with a possibility, not necessarily the probability, but the
possibility that it may yield a promotion.
But if I remember your testimony before, you all talked
about how you had a lot of very dedicated employees who really
wanted to be there but at the same time seemed like they were
hitting a brick wall.
Mr. Creel. If I could, I would just lead with another one
that is even better than that. ``How satisfied are you with the
recognition you received for doing a good job?'' We are up on
that as well.
Mr. Cummings. Yes. It is nice to hear some good news.
Mr. Brennan. I would say that one of the things that
contributed to the increased morale is the meetings every other
week. Virtually the entire agency is there--it is a small one--
for the first part of the meeting. Then some parts are closed
and they go out. But they feel like they are more part of a
team.
But I would say, you mentioned hope. If I were starting
over in Government and could roll the clock back 40 years, I
think the FMC is a great place to work because I think there is
upward mobility. Of 120 people, there are five SESs. Some of
them come in at the lowest level. Also in a small agency, if
you do a good job, you are quickly recognized and you can move
ahead. I think it is a terrific agency to work at. That is my
view.
Mr. Cummings. You know, I am going to be giving some
graduation speeches. As a matter of fact, on Friday I am
speaking at the University of Maryland Law School. I am going
to pull some stuff from this report because I think it has a
lot to do with how these folks will go out being leaders. They
need to remember the people who they may be supervising or what
have you. It is very significant.
Mr. Larsen?
Mr. Larsen. Thank you, Mr. Chairman. Commissioner Dye, as
you are looking at the implications of the EU's decision, or
whomever can answer this best, obviously you are going to know
a little bit more about this than I will, considering impacts
on the East Coast of the U.S. versus the West Coast of the
U.S., I am just checking now to see if there are any impacts on
the West Coast as well as you are moving forward in looking at
this.
The second question has to do with today's state of the
economy. The ports of my district in Washington State are
seeing it like any other point with 20 to 30 percent decreases
in activity coming in and going out. That is reflected in trade
numbers all over the world as well.
One of the concerns I have as we look at the potential
global economic recovery, as we hit a bottom and come out of
that, especially on the West Coast what is the impact that
State owned or State operated carriers have? Do they have a
different advantage over private common carriers? As well, does
this global economic recession give folks an opportunity to
establish barriers to access to protect themselves better as we
recover? Do you have some thoughts on that?
Ms. Dye. Thank you, Mr. Larsen. It is interesting that you
would ask about controlled carriers because we have just had
this conversation before I came over today. Obviously, during a
time of economic uproar, it is our responsibility to keep on
top of those developments. We started last fall to have regular
briefings from the staff on the effects of the downturn on all
of our stakeholders across the board.
One of the things that we have been watching with
controlled carriers is contract prices. We haven't seen any
evidence yet that any controlled carrier has actually used
unfair advantage against American or for that matter any other
interests. In fact, those carriers have seen a decrease in
their revenues as well.
Mr. Larsen. Is that something then you will continue to
evaluate as you move forward?
Ms. Dye. Yes, of course.
Mr. Larsen. That is really just a couple of thoughts I had,
Mr. Chairman. I appreciate it.
Ms. Dye. Thank you.
Mr. Cummings. Again, I want to thank you all very much. Mr.
Brennan and Ms. Dye, continue on. I am sure that you will be
joined by others soon. To Mr. Creel, again, I thank you very
much. You are now dismissed.
We will now call up Mr. David Rivait who is the Associate
Administrator for Budget and Programs and Chief Financial
Officer of the Maritime Administration. You have a whole room
to yourself.
Mr. Rivait. I am feeling a little lonely down here, Mr.
Chairman.
Mr. Cummings. You may proceed.
TESTIMONY OF DAVID J. RIVAIT, ASSOCIATE ADMINISTRATOR FOR
BUDGET AND PROGRAMS AND CHIEF FINANCIAL OFFICER, MARITIME
ADMINISTRATION
Mr. Rivait. Mr. Chairman, Mr. LoBiondo, Mr. Larsen it is a
pleasure being here today. My name is Dave Rivait. I am
MariAd's Associate Administrator and Chief Financial Officer. I
am here to present the Maritime Administration's 2010 budget
request that we received from annual transportation
appropriations.
In 2010, the President is requesting $345.5 million for the
Maritime Administration, an increase of 3.6 percent over the
2009 enacted level. That is excluding those funds we received
from supplemental appropriations for the Economic Recovery Act.
In 2010, the Maritime Administration has three principle
initiatives that are highlighted in more detail in my written
testimony. Let me just briefly summarize them here. First, a
$15 million increase is included for a Secure and Efficient
Ports Initiative which is part of a larger initiative that is
also funded within the Department of Homeland Security. Second,
the budget includes a program increase of $12 million to
enhance programs at the U.S. Merchant Marine Academy in New
York. Third, our request includes an increase of $1.1 million
to enhance our support to the six State maritime academies
across the Country. Let me just give you a bit more detail on
each of those three items.
First, in the Secure and Efficient Ports Initiative, the
$15 million program that I mentioned is going to be managed
through our Office of the Associate Administrator for
Intermodal Systems Development. As I said, it is in partnership
with the Department of Homeland Security, which includes $10
million in their budget for this program. The principle focus
of this effort is in considering major port improvements around
the Country. This Initiative is going to help identify
strategies for integrating security considerations into
projects improving port capacity and efficiency.
The main way we are going to do this through these new
monies is to provide Federal assistance for studies and joint
planning that will assist in preparing for the larger
infrastructure expenditures that would be forthcoming for some
of these major port improvements. These sorts of study efforts
would focus on some of the program areas that are of keen
interest to the Maritime Administration, particularly the
consideration of links for coastal and inland ports to highways
and rail as well as increased use of the marine highway system.
That could have an important security nexus by, for
example, moving hazardous materials and hazardous freight away
from surface modes and onto what are now underutilized marine
corridors.
The second major initiative in the budget is additional
funding for the U.S. Merchant Marine Academy, an increase of
$12 million, bringing the total funding for the Academy in 2010
to $74.4 million. This includes an additional $4.8 million to
support the operations of the school as well as an additional
$7.2 million to enhance the school's capital improvement
program. That brings total funding to $15.4 million.
I wanted to briefly mention as part of my presentation on
the Academy that the school has experienced some significant
financial management and internal control weaknesses that we
identified last year and brought to the attention of the
Congress. These matters as well as others are now the subject
of a GAO audit that has been ongoing since July. We expect
results from that audit to be delivered to the Secretary and to
Congress within the next many weeks. I would be happy and
prepared to discuss those additional issues with the Committee.
Finally, the last major initiative that is included in the
budget, as I had mentioned previously, is an increase of $1.1
million so support the State maritime academies, bringing total
funding to $15.6 million. This increase will principally
support first an increase to student incentive payments. This
is direct assistance to cadets attending these schools. The
last Congress enacted legislation that allowed an increase in
the annual payment that we could make to each of these
students. So this additional funding is in part to help support
that.
In addition, there is additional money included in the
budget for school ship maintenance and repair. Each of these
six State maritime academies have a Federal ship that is owned
by the Maritime Administration that we make available to these
academies. This funding will help support the adequate
maintenance and repair of those ships for the safety of the
cadets.
Those are my brief oral comments. I have a longer written
statement I would like to submit for the record. I am ready to
answer your questions.
Mr. Cummings. Thank you very much. Mr. Taylor wanted us to
ask you--he had to leave to go to another hearing--but he
wanted to ask how much Title 11 funds do you currently have in
hand? How much do you expect to expend this year?
Mr. Rivait. Mr. Chairman, I don't have a good answer for
you in terms of our plans for spending this year. Perhaps we
can get a response quickly for the record.
But I can tell you that we do have a balance available.
Last year we received through the Department of Defense
resources that were designed to support the Title 11 program,
$48 million. Of that balance, we have only utilized $3 million
of the $48 million as supporting loan guarantees. So there is
still a balance of $45 million that remains available to
support additional loan guarantees.
Mr. Cummings. Is that why the Administration did not
request in increase in this program in fiscal year 2010?
Mr. Rivait. I think that is one of the principal increases
apart from some of the tough trade offs that were made in the
budget. It was also the case that we did have resources that
would support additional loan guarantees from the prior action.
Mr. Cummings. Mr. LoBiondo?
Mr. LoBiondo. Mr. Chairman, I really don't have any
questions. Mr. Rivait, I want to thank you for your
presentation. I want to thank you for your service and keeping
things moving forward. Thank you, Mr. Chairman.
Mr. Cummings. Mr. Larsen?
Mr. Larsen. Thank you, Mr. Chairman. Can you talk a little
bit about the assistance to small shipyards program? It is a
little bit in your testimony. Discuss the timeline for the
fiscal year 2009 money as well as the timeline for the ARRA era
money.
Mr. Rivait. Sure. I can tell you the Secretary places a
very high priority for all of the economic assistance money
getting obligated and out as quickly as possible. For the $100
million, $2 million of which is being reserved for
administrative expenses so $98 million in the shipyard loans
from the supplemental appropriation, there were 451
applications. Many of these our Associate Administrators who
have briefed us on this indicate are quite strong. They are in
the process now of plowing through those. We expect to
essentially make awards all at once sometime around the middle
to third week in August.
The $17.5 million that was appropriated for the program
essentially through regular appropriations, applications for
that program were actually due earlier this week. I believe the
number was 75 applications for that $17.5 million. We are on a
timeline that is actually to make awards for that program I
think a bit earlier than the August timeframe. But I would say
to call it late July. That is the time period we are on right
now.
Mr. Larsen. Just to clarify, it was the stimulus package
for the $100 million?
Mr. Rivait. Yes.
Mr. Larsen. Right, OK. Can you talk as well about piracy?
We are having a hearing next week. Thanks to the leadership of
the Chairman, the Subcommittee is continuing to not just
monitor piracy but also to consider the roles that you all, the
Coast Guard, and the Navy as well are playing in that. Could
you update us in MariAd's continued role in the training and
best practices development for industry?
Mr. Rivait. Well, I can say that I am not the piracy expert
for our agency.
Mr. Larsen. OK, let me ask how much money are you spending
on developing practices?
[Laughter.]
Mr. Rivait. Well, we are spending no more than we usually
would. It is part of our base resources, what we are
accomplishing this through.
But MariAd has been very involved with industry and other
government partners in the international community in both
developing and disseminating best practices. I think one of the
areas that we have been actively involved with is working with
the Naval Investigative Service on anti-piracy assistance
teams. These actually assist shipping companies in examining
the capacities of individual vessels in order to make
recommendations that would make them less vulnerable and often
times would not cost a lot of money.
Mr. Larsen. Thank you very much. Thank you very much, Mr.
Chairman.
Mr. Cummings. I have just two quick things. Do you know how
many U.S. flag vessels transit the Horn of Africa region on an
annual basis?
Mr. Rivait. I have seen different numbers. But in the Gulf
of Aden there may be on any given day 50 to 60 ships that are
transiting the region. So that would be something on the order
of around 20,000 or a bit more per year. I can say that on any
given day, of those 50 or so ships one of them is likely to be
a U.S. flag vessel.
Mr. Cummings. What impact is the increase in piracy in the
Horn of Africa having on insurance and related costs charged to
U.S. flag vessels?
Mr. Rivait. Mr. Chairman, I don't have the specifics for
you in terms of what the difference would be other than to
represent that I know there has been an impact on insurance
that shipping companies are paying in order to travel through
that region. But we can provide those greater details for the
Committee.
Mr. Cummings. I appreciate it. We will be submitting some
other questions also.
Thank you very much. This hearing is ended.
[Whereupon, at 5:10 p.m., the subcommittee was adjourned.]
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