Military


National Defense Reserve Fleet (NDRF)

The National Defense Reserve Fleet (NRDF), under the custody of MARAD, is an inactive reserve source of basic Merchant design type ships that could be activated within 20 - 120 days to meet the shipping requirements of the United States during national emergencies. This fleet of about 100 ships consists mostly of World War II merchant vessels are available for use in both military and non-military emergencies, such as commercial shipping crises. Ships in the NDRF are regionally located at three fleet sites - James River, VA (East Coast), Beaumont, TX (Gulf Coast), and Suisun Bay, CA (West Coast). Naval auxiliaries are maintained at the fleet by MARAD on a retention basis for the Navy.

Inactive naval ships of basic merchant design, including ships of the Amphibious Force and excluding ships maintained in a mobilization status by MARAD for Military Sealift Command (MSC), may be laid up in the NDRF when overcrowded berthing conditions exist at a Navy Inactive Ship Maintenance Facility (NISMF). Battleships, Cruisers, and Aircraft Carriers which have been stricken or those awaiting final disposition may be transferred to MARAD locations for berthing.

The National Defense Reserve Fleet (NDRF) was established under Section 11 of the Merchant Ship Sales Act of 1946, to serve as a reserve of ships with value for national defense purposes. These ships could be activated to meet shipping requirements during national emergencies.

NDRF anchorage sites were originally located at Stony Point, New York; Fort Eustis, (James River), Virginia; Wilmington, North Carolina; Mobile, Alabama; Beaumont, Texas; Benicia (Suisun Bay), California; Astoria, Oregon; and Olympia, Washington. At its peak in 1950, the NDRF had 2,277 ships in lay-up. NDRF vessels are currently located at the James River, Beaumont, and Suisun Bay fleet sites, and at designated outported berths. As of January 31, 2001, the NDRF consisted of 257 vessels, primarily dry cargo ships, with some tankers, military auxiliaries, and other types.

A Ready Reserve Fleet component was established in 1976 as a subset of the NDRF to provide rapid deployment of military equipment, and became known as the Ready Reserve Force (RRF). The RRF numbered 76 vessels as of early 2001. A vessel downgraded from RRF is still a NDRF asset and its removal from the RRF does not affect the total of the NDRF.

An additional 60 ships are held under MARAD custody for other Government agencies on a cost- reimbursable basis.

NDRF vessels have supported emergency shipping requirements in seven wars and crises.

In World War II, civilian-crewed U.S. cargo ships controlled by the War Shipping Administration carried about 75 percent of shipments from the United States. Total cargo lifted between December 7, 1941, and the capitulation of Japan was approximately 300.5 million short tons. The U.S.-flag merchant fleet also carried the great majority of military personnel and civilians moving overseas and returning to the United States during and after the war.

During the Korean War, 540 vessels were broken out to support military forces. A worldwide tonnage shortfall in 1951-1953 required over 600 ships to be reactivated to lift coal to Northern Europe and grain to India.Approximately 31.5 million measurement tons of supplies were shipped from the United States to the Far East during the Korean War. About 95 percent of these supplies were shipped by sea, with 80 percent carried by privately owned U.S.-flag merchant ships, and 15 percent by Military Sea Transportation Service ships -- all crewed by civilian American citizen seafarers.

From 1955 through 1964, another 600 ships were used to store grain for the Department of Agriculture. Another tonnage shortfall following the Suez Canal closing in 1956 saw 223 cargo ships and 29 tankers activated from the NDRF. During the Berlin crisis of 1961, 18 vessels were activated and remained in service until 1970. More recent sealift requirements have been met by the RRF component of the NDRF.

The Vietnam conflict caused 172 vessels to be activated to meet military requirements rather than requisition commercial vessels away from trade. Privately owned U.S.-flag merchant ships delivered 65 percent of the dry cargo shipments to support American forces in Vietnam, and Government-owned ships carried the balance. The Maritime Administration activated 172 World War II era Victory ships from its National Defense Reserve Fleet. Some 15,000 U.S. citizen merchant mariners crewed the vessels. Cargoes totaled more than 85 million measurement tons.

 NATIONAL DEFENSE RESERVE FLEET--September 30, 1995 
=======================================================================
                         NDRF      NDRF Non-     Reimbursable
HOME PORT            Retention{1}  Retention{2}   Custody{3}    Totals
=======================================================================
James River Reserve Fleet 
Ft. Eustis, VA            37           33             37          107
Beaumont Reserve Fleet
Beaumont, TX              39            8              4           51
Suisun Bay Reserve Fleet
Benicia, CA               24           22             35           81
Other Locations {4}       55            2              0           57
-----------------------------------------------------------------------
Totals:                  155           65             76           296 
========================================================================
1 Vessel being maintained for emergency activations, for historic display, 
or for spare equipment.  Number shown includes RRF ships.
2 Vessels pending disposal.
3 Vessels not in the NDRF program and owned by other government agencies 
or by the Title XI program.
4  Various outport locations within the continental United States. 
Three vessels are outported in Japan.

Merchant ships added to the NDRF are acquired by MARAD through the provisions of section 510(I) of the Merchant Marine Act of 1936. Many of these newer vessels are held for potential upgrade to the RRF, while older vessels, including the remaining World War II built Victory-ships, are being systematically scrapped.

Vessels with military utility or logistic value are held in retention status and are in a preservation program that is designed to keep them in the same condition as when they enter the fleet. Dehumidification of the internal spaces is an effective means of controlling the corrosion of metal and the growth of mold or mildew. A cathodic protection system uses an impressed current in which DC power is distributed through anodes to the exterior underwater portions of the hull, resulting in an electric field that suppresses corrosion and preserves the surface of the hull. External painting and other cosmetic-appearance work is generally deferred since it is not detrimental to the ability to activate and operate the vessel.

MARAD is authorized as the government's disposal agent through the NDRF program for merchant type vessels equal to or greater than 1,500 gross tons. As National Defense Reserve Fleet vessels become obsolete, the US Maritime Administration sells them in accordance with the Merchant Marine Act of 1936 (as amended). Proceeds from the sale of National Defense Reserve Fleet vessels were required to be deposited in the Vessel Operations Revolving Fund and used to maintain and purchase newer vessels for the Ready Reserve Fleet.

Some vessels have been stored in the inactive fleet up to fifty years. As of 1998 MARAD had 70 obsolete NDRF vessels. The yearly cost to maintain the NDRF ships in lay-up average about $19,000 each. Over a dozen of the oldest ships are in such poor condition that they might require dry-docking for repairs to prevent the ships sinking in place. Estimates for the cost of repairing the worst ships run as high as $800,000 per ship. Even proceeding under a "scrap the worst first" formula, some vessels will require repair if not scrapped in a reasonable period of time. The US Maritime Administration estimates it will have to scrap an average of 18 ships per year to avoid dry-docking costs.

In 1990, funds for maritime heritage were derived through proceeds from disposed government property. The Merchant Mariner Memorial Act of 1990 (P.L. 101-595) authorized the conveyance of a National Defense Reserve Fleet vessel scheduled for scrapping to a non-profit organization. The Act further provided that the non-profit organization use the proceeds from the sale and scrapping the vessel to establish a memorial to merchant mariners. The use of vessel conveyance and scrapping proceeds to support specific maritime heritage projects was introduced again in the Maritime Administration Authorization Act for Fiscal Year 1993 (H.R. 4484). This bill, which incorporated the Merchant Marine Memorial Enhancement Act of 1992 (H.R. 5663) and the Historic Fleet Restoration Act of 1992 (H.R. 5319), also proposed to authorize conveyance of vessels scheduled for scrapping to non-profit organizations. This time the proceeds would be used to restore historic vessels and to make a Liberty or Victory Ship seaworthy for participation in activities commemorating the 50th anniversary of the Normandy invasion.

Under the 103rd Congress, the concept of using scrap proceeds to support a single competitive grants program was introduced September 14, 1993 in the National Maritime Heritage Act of 1993 (H.R. 3056). Through this proposed legislation grants for maritime heritage education and preservation activities would be funded through 25 percent of the annual proceeds from scrapped vessels of the National Defense Reserve Fleet.

In October 1991, a US General Accounting Office report, entitled "Strategic Sealift, Part of the National Defense Reserve Fleet Is No Longer Needed," recommended that the US Maritime Administration accelerate its scrapping of older National Defense Reserve Fleet ships. Consistent with the General Accounting Office report, Congress directed the US Maritime Administration through the National Maritime Heritage Act of 1994, to scrap all unassigned obsolete vessels in the National Defense Reserve Fleet by September 30, 1999 (since changed to 2001), in a manner that maximizes the return to the United States. The US Maritime Administration did not interpret the requirement to maximize benefits to the US through these sales as a mandate to consider only price when accepting bids for its vessels. On November 2, 1994, the National Maritime Heritage Act of 1994 became Public Law 103-451.

In 1996, Congress authorized the transfer of government property to United States memorial ships. The NDRF program has been able to support ships with items that are no longer commercially available to enhance the heritage of historic U.S. built ships. A state agency can file an application to request title to a vessel "as-is where-is" from the NDRF for the purpose of creating an Artificial Fish Reef. A total of 51 vessels have been transferred to 10 states under the program including: Texas (12), Florida (10), North Carolina (7), Virginia (6), Alabama (5), Mississippi (5), Georgia (2), South Carolina (2), California (1), and New Jersey (1).

Before 1994, MARAD disposed of obsolete vessels on a regular basis by selling ships "as is/where is" to the highest bidder, generally an overseas entity. However, after the Environmental Protection Agency (EPA) raised concerns regarding the presence of hazardous materials such as polychlorinated biphenyls (PCBs) in various shipboard components, the sale of vessels for overseas scrapping was curtailed in 1994. India, Pakistan and Bangladesh dominate the world ship scrapping market, while Vietnam, the Philippines and Thailand are rapidly developing scrapping industries. It is more difficult for companies to scrap ships profitably in the domestic market as a result of more protective environmental, safety, health and labor laws in the United States.

Since 1995, MARAD has refrained from scrapping obsolete NDRF vessels overseas due to concerns about the environment and worker health and safety at the foreign scrap sites. The few remaining domestic ship buyers soon found that scrapping under stringent U.S. worker safety and environmental protection laws was not profitable under MARAD's conditions of sale. Meanwhile, MARAD was constrained from paying for scrapping services by both a lack of specific appropriations and statutory authority. As a result, MARAD's fleet of obsolete vessels grew and deteriorated further.

Between 1987 and 1994, 130 vessels were sold to foreign scrappers for $108/ton, but only 10 vessels were awarded to be scrapped domestically in 1997-98 at an average of $4.60/ton. In 1999 a total of 12 vessels were awarded for only 27 cents per ton and three vessels were sold for $10 each, to be scrapped domestically. Many of the vessels that were sold domestically had not been picked up by the buyers. One sales agreement for five vessels was terminated in 1999 because the purchaser did not take possession of the vessels.

The Department's Inspector General (DOT IG) has identified the disposal of obsolete ships in the National Defense Reserve Fleet (NDRF) as one of the Department's "Top 10" management challenges. MARAD's fleet of obsolete ships had grown to 122 as of July 2001, and MARAD expects to receive up to eight additional, obsolete, non-combatant ships from the Navy each year in the future.

These vessels are deteriorating and pose an immediate environmental threat in Virginia, Texas, and California. They contain hazardous substances such as fuel oil, asbestos, solid and liquid polychlorinated biphenyls, lead, radium, and chromates. Immediate state and Federal action would be required, should the hazardous materials escape into the water. The so-called "40 worst condition" vessels are on average 50 years old and have been awaiting disposal for two decades. Some have deteriorated to a point where a hammer can penetrate their hulls. During FYs 1999 and 2000, MARAD spent over $2 million to repair leaking vessels and keep them afloat.

Specific authority to pay for scrapping provided in the National Defense Appropriations Act for FY 2001 (P.L. 106-259), enacted on October 30, 2000, included $10 million for the accelerated scrapping of those vessels in the "worst condition." This amount was transferred to MARAD early in the fiscal year to begin disposal of the worst-condition vessels in the fleet. This amount will likely fund the scrapping of an estimated 3 to 5 vessels. Concurrently, the National Defense Authorization Act for FY 2001 (P.L. 106-398) extended until September 30, 2006 the deadline to dispose of all vessels in the NDRF that are not assigned to the Ready Reserve Force or otherwise designated for a specific purpose. P.L. 106-398 also charged MARAD to develop a program for the scrapping of obsolete NDRF vessels in a timely, safe and environmentally sound manner, and to report to Congress every six months on the program's progress.

In accordance with the provisions of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (Act) the Maritime Administration (MARAD) intends to establish a long term ship scrapping/disposal program to dispose of obsolete National Defense Reserve Fleet (NDRF) Vessels. The Act identified thirty-nine (39) priority vessels slated for disposal, the majority of which are located in the James River Reserve Fleet, Norfolk, VA. The scope of the work includes, but is not limited to, towing of the vessel; dismantling of the vessel; hazardous material/waste removal and disposal; and sale of scrap material, in compliance with specific solicitation requirements which are consistent with U.S. statutory and regulatory requirements (i.e., the Toxic Substances Control Act (TSCA), the Resources Conservation and Recovery Act (RCRA), Occupational Safety and Health Act (OSHAct)), as well as international laws, treaties conventions and agreements. MARAD anticipates awarding up to three indefinite delivery/indefinite quantity contracts per each phase/lot (i.e., Phases 1-3/East, West and Gulf Coast). The applicable NAICS code for this procurement is 488330. MARAD intended to issue a draft Request for Proposals (RFP) for industry review and comments on or about August 6, 2001.



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