[Federal Register Volume 88, Number 42 (Friday, March 3, 2023)]
[Notices]
[Pages 13508-13510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04352]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration

[Docket Number MARAD-2023-0041]


Buy America Request for Information; Federal Ship Financing 
Program

AGENCY: Maritime Administration (MARAD), Department of Transportation 
(DOT).

ACTION: Notice; request for information (RFI).

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SUMMARY: MARAD, a modal agency of DOT, administers the Federal Ship 
Financing Program (``Title XI''), which provides loan guarantees to 
finance the construction of commercial vessels in U.S. shipyards or 
shipyard projects. Although Title XI provides important support for 
U.S. shipyards, the U.S. maritime industry in general, including the 
shipbuilding sector, has been on the decline for decades. As a result, 
U.S. shipyards frequently turn to foreign manufacturers for a variety 
of components that are not made in the U.S. This RFI is intended to 
gather information regarding the availability of domestically 
manufactured components for commercial shipbuilding in the U.S., 
particularly considering the investment planned in commercial 
shipbuilding for support of offshore windfarm facilities by MARAD 
through loan guarantees from the Title XI program. MARAD is seeking 
input from the public, including stakeholders (such as State and local 
agencies, the marine component manufacturing industry, component 
suppliers, labor unions, related associations, ship operators, and 
transportation advocates), on the availability of ship components 
manufactured in the U.S. that can meet the Title XI domestic content 
requirement.

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

ADDRESSES: To ensure that you do not duplicate your docket submissions, 
please submit all comments by only one of the following ways:
    [ssquf] Federal eRulemaking Portal: Go to https://www.regulations.gov and follow the online instructions for submitting 
comments.
    [ssquf] Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Ave. SE, W12-140, Washington, DC 20590-
0001.
    [ssquf] Hand Delivery: W12-140 of the Department of Transportation, 
1200 New Jersey Avenue SE, Washington, DC 20590 between 9 a.m. and 5 
p.m. E.T., Monday through Friday, except Federal Holidays. The 
telephone number is 202-366-9329.
    [ssquf] Instructions: You must include the agency name and the 
docket number, MARAD-2023-0041, at the beginning of your comments. All 
comments received will be posted without change to https://www.regulations.gov, including any personal information provided.
    [ssquf] Note: Input submitted online via www.regulations.gov is not 
immediately posted to the site. It may take several business days 
before your submission is posted.
    [ssquf] Privacy Act: Anyone can search the electronic form of all 
comments received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). For information on 
DOT's compliance with the Privacy Act, please visit https://www.transportation.gov/privacy.

FOR FURTHER INFORMATION CONTACT: Mr. David Heller, MARAD Associate 
Administrator for Business and Finance Development, 202-366-1850, or 
via email at [email protected]. For legal questions, please contact 
Ms. Lauren Gill, MARAD Office of Chief Counsel, 202-366-2150, or via 
email at [email protected]. Office hours for MARAD are from 8 a.m. to 
4:30 p.m., E.T., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    A copy of this Notice, all comments received on this Notice, and 
all background material may be viewed online at https://www.regulations.gov using the docket number listed above. Electronic 
retrieval help and guidelines are also available at https://www.regulations.gov. An electronic copy of this document also may be 
downloaded from the Office of the Federal Register's website at: 
www.FederalRegister.gov and the Government Publishing Office's database 
at: www.GovInfo.gov.

Confidential Business Information

    Confidential Business Information (CBI) is commercial or financial 
information that is both customarily and actually treated as private by 
its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), 
CBI is exempt from public disclosure. If your comments responsive to 
this RFI contain commercial or financial information that is 
customarily treated as private, that you actually treat as private, and 
that is relevant or responsive to this RFI, it is important that you 
clearly designate the submitted comments as CBI. You may ask DOT to 
give confidential treatment to information you give to the Department 
by taking the following steps: (1) Mark each page of the original 
document submission containing CBI as ``Confidential''; (2) send DOT, 
along with the original document, a second copy of the original 
document with the CBI deleted; and (3) explain why the information you 
are submitting is CBI. Unless you are notified otherwise, DOT will 
treat such marked submissions as confidential under the FOIA, and they 
will not be placed in the public docket of this RFI. Submissions 
containing CBI should be sent to Mr. David Heller, Associate 
Administrator for Business and Finance Development, Room W21-318, 
MARAD, 1200 New Jersey Avenue SE, Washington, DC 20590. Any

[[Page 13509]]

comment submissions that DOT receives that are not specifically 
designated as CBI will be placed in the public docket for this matter.

Background

    As expressed in Executive Order 14005, Ensuring the Future Is Made 
in All of America by All of America's Workers (86 FR 7475), it is the 
policy of the Executive Branch to maximize, consistent with law, the 
use of goods, products, and materials produced in, and services offered 
in, the United States. Although the Title XI statute does not contain 
any domestic content requirements, as a matter of policy, MARAD adopted 
a domestic content requirement by regulation, set forth in 46 CFR 
298.13.\1\ Rather than affirmatively requiring recipients to meet a 
domestic content standard as a condition of financial assistance, under 
Section 298.13(b)(2), MARAD excludes from the loan amount that MARAD 
guarantees the costs of foreign components and services used in vessel 
construction unless MARAD grants a waiver for these costs.
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    \1\ MARAD has determined that the requirements of the Build 
America, Buy America Act (BABA), enacted as part of the 
Infrastructure Investment and Jobs Act (Public Law 117-58, November 
15, 2021), relating to the use of domestic steel, iron, manufactured 
products, and construction materials do not apply to the Title XI 
program because the recipients of such assistance are for-profit 
entities which, as indicated in the Office of Management and 
Budget's Initial Implementation Guidance on Application of Buy 
America Preference in Federal Financial Assistance Programs for 
Infrastructure, M-22-11 (April 18, 2022), are not considered non-
Federal entities for purposes of applying the BABA domestic 
preference requirements for public infrastructure projects.
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    MARAD reviews waiver requests based on certifications from the 
applicant that:
    (A) A foreign item or service is not available in the United States 
on a timely or price-competitive basis, or
    (B) The domestic item or service is not of sufficient quality.
    Under Title XI's domestic content requirement, an item is 
considered to be available in the United States (i.e., domestic) if it 
is manufactured in the U.S. As indicated at 46 CFR 298.13(b)(2)(i), 
MARAD does not grant waivers for major foreign components of the ship's 
hull and superstructure. This requirement tracks the long-established 
U.S. construction requirement for ships to operate in the Jones Act 
trade, set forth in 46 CFR 67.97, which is regulated by the U.S. Coast 
Guard. Pursuant to section 67.97, a vessel must be assembled entirely 
in the United States, and all ``major components of the hull and 
superstructure'' must be fabricated in the United States to be 
considered built in the United States.
    Title XI's domestic content requirement is intended to incentivize 
shipowners to purchase vessels that have maximized the use of domestic-
made products and components in an effort to create a steady source of 
demand that will help catalyze domestic production and bolster thin 
supply chains. However, the availability of components for commercial 
ships is heavily influenced by the nature and size of the product 
market. The U.S. has a significantly smaller domestic commercial 
shipbuilding industry than the European Union, Japan, South Korea, and 
China due to government support for that type of heavy-industrial 
manufacturing by those countries. In addition to the higher cost of 
operating in a small domestic market, U.S. commercial ship component 
manufacturers are also limited in their ability to compete by 
differences in domestic and international maritime specifications/
standards. Consequently, domestically manufactured components specified 
for the construction of a ship are often either unavailable or, if 
available, cannot be used as a substitute within a system of components 
that is foreign manufactured. For instance, if a single manufacturer is 
responsible for a propulsion system, substituting a foreign-
manufactured component with a comparable U.S. manufactured component 
may void the warranty for the entire system or make the entire 
propulsion system unreliable. As a result, the U.S. shipbuilding 
industry must incorporate some foreign manufactured components in 
almost all types of ships. Currently, MARAD has some understanding of 
the availability of ship components in the United States that can 
comply with Title XI's domestic content requirement but wishes to 
expand its available information, particularly with the recent 
significant interest and investments in offshore windfarm facilities. 
Therefore, with the goal of maximizing the use of and expanding ship 
component manufacturing in the U.S., MARAD is seeking information on 
sourcing compliant domestic components available to the U.S. commercial 
shipbuilding industry, based on a list of components that MARAD has 
previously identified as not typically available domestically. By 
shifting and maximizing manufacturing to the U.S. for ship components 
as soon as is practicable, domestic manufacturing firms have the 
potential to obtain significant benefits from the investments planned 
in the commercial shipbuilding industry.
    This RFI is intended to: (i) help MARAD better understand whether 
and to what extent domestic sourcing is available now or may be 
possible in the future for commercial ship components that have 
historically only been available from foreign sources; (ii) ensure U.S. 
shipbuilders and ship operators have the opportunity to identify any 
commercial ship component market resources meeting the Title XI 
domestic content requirement; and (iii) highlight the benefits of 
shifting manufacturing to the U.S., considering the investment planned 
in this area.

Request for Information

    Through this RFI, MARAD seeks information and suggestions from the 
public and a broad array of stakeholders that may be familiar with or 
interested in manufacturing domestic ship components. Specifically, 
MARAD seeks information regarding the availability of domestic ship 
components to the U.S. commercial shipbuilding industry, and their 
inclusion in Title XI projects. This information will be used to better 
assess requests for waivers and encourage use of domestic-made 
components.
    As a baseline, MARAD has identified the following categories of 
ship components it believes are not currently manufactured in the U.S. 
through information it has collected as part of its domestic content 
review of Title XI ship construction projects over the past decades:
    [ssquf] Marine Propulsion--energy generating systems, propulsion 
units, transmission propulsion systems, marine diesel, support systems, 
fuel service, spares.
    [ssquf] Navigation Systems--interior/exterior communications, 
surface surveyance, navigation systems (RADAR, GMDSS, ECDIS, INMARSAT), 
spares.
    [ssquf] Auxiliary Systems--pumps (including waterjet pumps and 
waterjet thrusters), climate control (HVAC systems), firefighting 
systems, compressed air systems, ventilation fans, boilers, ship 
control (steering, rudder, trim/heel, maneuvering, motion control/
stabilizers and fins), cranes and elevators, anchoring and mooring 
systems.
    [ssquf] Electric Plant--electric power generation, power 
distribution systems (electrical switchboards and switchgear), electric 
motors, lighting systems, batteries (EV power generation), power 
generation supports, special purpose systems, spares.

[[Page 13510]]

    [ssquf] Outfitting and Furnishings--ship fittings, hull 
compartmentation (grating, ladders), motion compensation (walkway, 
accommodation ladder), coatings, living spaces (modular cabins).
    In this RFI, these items are referred to collectively as the 
``Foreign Components.'' MARAD encourages commenters to identify ship 
components listed above that currently have sufficient domestic 
availability to support Title XI projects, or to recommend 
modifications to the above listed components or categories of 
components so domestic sources may be more readily identified. MARAD 
also encourages commenters to identify other components or categories 
of components that should be considered ``Foreign Components.''
    MARAD is providing the following questions to prompt feedback. 
MARAD encourages public comment on any or all of these questions, and 
also seeks any other information commenters believe is relevant.
    In answering the questions below, MARAD asks that you specify in 
your written comments which question(s) you are answering and what type 
of ship component(s) you are discussing.

General Questions on the Listed Foreign Components

    1. Are there any ship components commonly used in Title XI projects 
that are not identified in this RFI as Foreign Components but which, as 
a commercial shipbuilder or ship operator, you believe should be 
brought to MARAD's attention as a Foreign Component not available in 
the US? If so, for each such identified ship component, please provide 
the following information:
    a. What is the basis and need for that ship component to be 
included as a Foreign Component?
    b. Please confirm that the component is not part of the hull or 
superstructure.
    c. What is the typical total cost of the identified Foreign 
Component?
    d. How much does the cost vary for each Foreign Component? Why does 
the cost vary?
    e. What is the average delivery timeline for each Foreign Component 
identified? Please be specific about which ship component you are 
referencing.
    f. How much does delivery time vary for each Foreign Component? Why 
does the delivery time vary?
    g. Where is the place of manufacture of the Foreign Component?

Manufacturer(s) Ability To Meet Title XI's Existing Domestic Content 
Requirement

    2. Are you aware of any existing ship component manufacturers that 
can meet the Title XI domestic content requirement for one or more of 
the Foreign Components? If so, for each identified ship component, 
please provide the following information:
    a. The make, model, and/or specifications of the identified ship 
component, as well as its place of final manufacture.
    b. Explain how the component is designed for use in the marine 
environment.
    c. How many of the ship components meeting Title XI's existing 
domestic content requirement can be manufactured per year?
    d. What is the price typically paid for the domestic ship 
component?
    e. What is the typical delivery timeline for the domestic ship 
component?
    f. How much does delivery time vary for each domestic ship 
component? Why does the delivery time vary?
    g. Where is the place of manufacture of the component?
    3. For those Foreign Components that currently cannot meet Title 
XI's domestic content requirement, what steps can be taken to provide 
ship components that meet Title XI's existing domestic content 
requirement? How long might it take to undertake those steps? What is 
the volume of ship components that could be shifted to manufacture in 
compliance with Title XI's domestic content requirement? Can that 
volume be ramped up over time?
    4. For manufacturers, ship builders, ship operators, and any other 
affected stakeholders, what are the anticipated administrative costs 
associated with complying with the Title XI domestic content 
requirement?

Ability To Maximize Domestic Content, Services, and Labor

    5. Please provide information on how the domestic content of ships 
systems (including their components could be maximized (even if all 
ship components cannot comply with the Title XI domestic content 
requirement).
    6. Please provide information on how domestic services and labor 
used in the manufacturing of specific ship components could be 
maximized (even if the item cannot comply with the Title XI domestic 
content requirement).
    7. In the absence of a waiver, how would the exclusion of the cost 
of foreign components from the amount of a loan under Title XI affect 
the financial feasibility of constructing a vessel?
    8. How else might MARAD spur and incentivize domestic availability 
of ship components commonly used in Title XI projects?

(Authority: 46 U.S.C. chapter 537; 49 CFR 1.93(a), 46 CFR part 298)

    By order of the Maritime Administrator.
T. Mitchell Hudson, Jr.,
Secretary, Maritime Administration.
[FR Doc. 2023-04352 Filed 3-2-23; 8:45 am]
BILLING CODE 4910-81-P