The Department of Defense (DOD) in recent years has leased some foreign-built cargo ships for total periods, including options and renewals, of almost 10 years a length of time that some observers argue effectively circumvents a legal requirement that U.S. military ships be built in U.S. shipyards. These observers, particularly the American Shipbuilding Association (ASA), have proposed reducing the current five-year legal limit on ship leases to two years for foreign-built ships. DOD argues that its ship leases are the most cost-effective way to meet its needs for the ships in question, and opposes the idea of reducing the leasing term from five years to two years for foreign-built ships. The House-reported version of the FY2008 defense authorization bill (H.R.1585) includes a provision (Section 1011) that would limit the terms of future leases of foreign-built ships to no more than 24 months. This CRS report will be updated when events warrant. The issue for Congress is whether to retain the current five-year limit on Department of Defense (DOD) ship leases, or reduce the limit to two years for leases of foreign-built ships. The decision that Congress reaches on this issue could have implications for defense funding requirements, the U.S. shipbuilding and merchant marine industries, and DOD's ability to acquire ships for various purposes The issue occurs in a context of finite defense resources and concerns in Congress and elsewhere for the future of the U.S. shipbuilding and merchant marine industries.
DOD Leases of Foreign-Built Ships: Background for Congress
2007
7 pages
Report
No indication
English
Business & Economics , Marine Engineering , Cost effectiveness , Merchant vessels , Leasing , Shipbuilding , Requirements , Time intervals , Congress , Department of defense , Shipyards , Law enforcement , Resources , Military applications , Ships , Industries , Defense systems , Asa(American shipbuilding association)