TAX CONFERENCE

The recently enacted "American Jobs Creation Act" gives significant tax breaks to a number of U.S. industries--including shipping.

MARINE LOG and BLANK ROME will present a senior level seminar CHANGES IN U.S. TAXATION OF SHIPPING INCOME in Stamford, Conn. on April 5 & 6, 2004

Make sure you know how the new tax rules work!

February 24, 2005

DD(X) to go to single yard?

The stage is being set for the Navy to recompete the DD(X) destroyer program with a view to allocating construction of the next-generation destroyer to just one yard--rather than splitting it, as currently envisaged, between General Dynamics Bath Iron Works and Northrop Grumman Ship Systems, Pascagoula.

Navy Times reported an unnamed Navy spokesman as saying the Navy is recommending the change , but that "no final decision has been made, as this requires approval by the Office of the Undersecretary of Defense for Acquisition Technology and Logistics."

Meantime, Ship Systems President Phil Dur, speaking Tuesday to a business group in Pascagoula, said the Navy has not made a formal announcement, "but there are very, very strong hints that we're going to move from a sole source collaborative strategy to a competition for the production of the ship."

Yesterday, a memo from BIW President Dugan Shipway that was circulated to his yard's 6,200 employees said: "I believe the Navy now envisions a competition between (Northrop) and BIW for this work that would eliminate the need for a second source of supply, and that the Navy feels the cost associated with maintaining a second source of supply cannot be justified now that the anticipated build rate of the program has been reduced to one ship per year."

Under the Bush Administration's FY 2006 budget proposal, rather than seven DD(X)s, the Navy will procure five DD(X)s through 2011, when it will begin procurement of the CG(X) cruiser program.

According to the Office of Management and Budget the Navy "believes that procuring one DD(X) per year is the appropriate investment for the DD(X) program until the CG(X) is procured in 2011. In addition, the upcoming 2005 Quadrennial Defense Review will review the Navy's current fleet and determine the capabilities needed in the future, which could impact the number of DD(X)s bought and the appropriate transition to CG(X) cruisers."

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