Maritime Museums Seek Grant Funding Changes

The USS Constitution in drydock; documentation of her repair is funded in part by an NPS Maritime Heritage Program grant.

Published May 13, 2016 4:24 PM by Paul Benecki

A group of maritime heritage advocates are working with members of Congress to increase transparency for the process of scrapping government vessels and to improve the accounting for ship inventory and proceeds – a review they contend is long overdue. This year, after a decade of work, they expect to see their proposal enshrined into law.

The U.S. Maritime Administration (MARAD) is responsible for administering the disposal of most public vessels over 1500 gt, with the exception of certain assets handled by the Navy. From 1994 to 2010, MARAD was required to provide 25 percent of the excess revenue of ship disposal to a matching grant program for maritime heritage organizations – museums, training programs and related groups, the majority of them non-profits. A legislative amendment in 2010 lifted that requirement, permitting the agency to spend the funds on either the grant program or on its own maritime heritage efforts.

Dr. Timothy J. Runyan, a professor at East Carolina University and chair of the 1,000-member National Maritime Alliance, says that heritage organizations have not seen enough of that 25 percent over the years, either before 2010 or after. Only three rounds of grants have been awarded so far, in 1998, 2015 and 2016. The long gap between rounds overlapped with the recession and a sharp decline in private funding for the non-profit sector, including donations to heritage organizations. Runyan says that MARAD should have prioritized "getting funds out to America's maritime heritage community . . . [which was] struggling with reduced contributions and visitation during the worst economic downturn since the Great Depression."

Kim Strong, a spokeswoman for MARAD, cited fluctuations in the scrap market and a halt in export of government vessels for overseas recycling as the primary reason for the absence in funding. She notes that in many of those years, MARAD had to pay domestic ship recyclers to demolish ships, not the other way around; once a positive return on ship sales resumed, the National Park Service and MARAD began conversations about reconstituting the grant program, leading to a memorandum of understanding in 2013 and a round of funding applications in 2015.

MARAD collected $75 million in proceeds from ship recycling sales from 2005 through 2015, and it has stated that as required, 25 percent – $19 million – will be allocated to heritage projects, including its own. Of that $19 million, MARAD has already awarded about $5 million to NPS Maritime Heritage Grant Program recipients in the 2015 and 2016 rounds, and it has said that it intends to commit about $5 million more (minus a percentage in administrative costs for NPS). MARAD Administrator Paul "Chip" Jaenichen has committed to making 12.5 percent of MARAD's future ship recycling proceeds available for the grants, subject to change "as informed by funding levels and each agency's requirements."

Runyan says that these allocations are long overdue and were made only after years of pressure from advocates. Ray Ashley, president and CEO of the Maritime Museum of San Diego, says that his efforts are substantially the reason that grant funding has recently been released. “[He] has worked long and tirelessly on this and deserved an enormous amount of credit for the success he has won,” Ashley said. 

However, Runyan says that the funds allocated to date are still inadequate to meet the needs of the organizations he represents. In support of additional grantmaking, he highlights the value of the winning projects from the last two years, including funds for drydocking the USS Constitution, the world's oldest commissioned warship afloat. Only about 30 out of over 130 proposals submitted were funded last year, and he suggests that many more worthy projects could have received grants if MARAD had allocated more. Dr. William B. Cogar, executive director of the Historic Naval Ships Association and Greg Gorga, president of the Council of American Maritime Museums echo Runyan’s call for additional funding.

To address these concerns, Runyan is working with Denise Krepp, a representative for ship recyclers and a former chief counsel for MARAD, on a legislative solution. Their efforts – which they describe as a years-long, difficult process – are beginning to bear fruit, despite alleged opposition from MARAD. Elements of their proposal are winning the support of prominent elected officials from both parties, including Senators David Vitter, Bill Cassidy and Roger Wicker, and Representatives Randy Forbes, Garret Graves, Duncan Hunter, and Donald Norcross.

If successful, their language will be included in the final version of this year's National Defense Authorization Act, expected in August. The amendment would restore the 25 percent allocation for heritage grants and compel MARAD to give an account of funds from ship disposals. The agency would also have to inventory all vessels that "may meet the criteria for MARAD to act as the disposal agent,” including ships held for auction by the Government Services Agency (GSA), a measure intended to increase transparency and provide a starting point for further legislation.

Strong did not directly comment on the legislative proposals, but said that the agency has already published reports on its ship-recycling programs, with annual reviews available on its website. She adds that it is working on new policies for inter-agency coordination of ship disposal.

The ship inventory provision of the legislation is of interest to activist Jon Ottman, who alleges that in the past, MARAD has not consistently exercised its authority as the government's disposal agent, and that other agencies (notably GSA) have disregarded regulations governing vessel disposal. A detailed list of all agencies' obsolete ships would give MARAD a means to enter into conversation with GSA regarding its holdings, and give Congress and advocates a view into the specifics of the government's scrapping activity, he says. Ottman and Krepp both contend that MARAD has been less than transparent in this aspect of its work and less than forthcoming in its communications; they suggest that a legislative (rather than administrative) solution is the appropriate course of action.

Whether or not they succeed this congressional year, a new downturn in the scrap market will mean less new funding for everyone concerned. As in the early 2000s, MARAD will again have to pay recyclers to take on the no-longer-profitable task of dismantlement – meaning no new sales revenue from disposal and no additional funding for maritime heritage grants (beyond the $10 million in existing commitments).