10 U.S.C. § 8633 — Auxiliary vessels: extended lease authority
submitted 27 years ago by Pub. L. 106-65 to r/title-10-ARMED-FORCES · 707 words · no verdicts yet
The Navy can lease new ships from private shipyards instead of buying them. Each lease must run 20 years or more, and Congress must approve each specific ship. The Navy can later buy the ship, and it must be built in the U.S.
(a) The Secretary of the Navy can sign contracts with private U.S. shipyards to build new surface ships, which the Navy then leases long-term instead of buying outright. This applies to ships for the Navy's combat logistics force, its strategic sealift force, or other Department of Defense support vessels.
(b) But the Secretary can't use this authority for any specific ship unless Congress has passed a separate law specifically authorizing a lease contract for that ship. When asking Congress for that authorization, the Secretary must also share the findings required under subsection (g).
(c) A "long-term lease" here means a lease, bareboat charter, or conditional sale agreement lasting 20 years or more, counting any option periods.
(d) These lease contracts can include an option letting the United States buy one or more of the ships at any point during or at the end of the lease. The price is whichever is lower: the remaining unpaid cost of the ship (plus any costs from ending the financing early), or the ship's fair market value.
(e) Every ship covered by one of these contracts must be built in a shipyard inside the United States, and once delivered, must be officially registered under U.S. law.
(f) The Secretary has choices about how to actually operate a leased ship. He can contract with a U.S. company experienced in running vessels for the government, for whatever length of term he sets. If he instead wants to use government civilian mariners to crew the ship, he must first weigh three things: the full cost of a civilian crew over the ship's expected lifespan, the effect on the pool of private-sector mariners, and what the Navy actually needs operationally.
(g) The Secretary can waive two other laws — the part of section 3672 dealing with paragraph (b)(2), and section 3675 — for one of these lease contracts, but only if he makes three specific findings: that the need for the ships or services isn't expected to change much over the contract, that it's reasonable to expect the government will keep requesting enough funding to avoid canceling the contract, and that waiving these rules serves U.S. interests given how quickly Congress can act. Whenever the Secretary uses this waiver, he must notify the Senate and House Armed Services Committees.
(h) If a contract entered into under this section is terminated, the costs of termination may be paid from amounts originally made available for performance of the contract, amounts currently available for operation and maintenance of the type of vessels or services concerned and not otherwise obligated, or funds appropriated for those costs.
Subject to subsection (b), the Secretary of the Navy may enter into contracts with private United States shipyards for the construction of new surface vessels to be acquired on a long-term lease basis by the United States from the shipyard or other private person for any of the following:
The combat logistics force of the Navy.
The strategic sealift force of the Navy.
Other auxiliary support vessels for the Department of Defense.
A contract may be entered into under subsection (a) with respect to a specific vessel only if the Secretary is specifically authorized by law to enter into such a contract with respect to that vessel. As part of a request to Congress for enactment of any such authorization by law, the Secretary of the Navy shall provide to Congress the Secretary’s findings under subsection (g).
In this section, the term “long-term lease” means a lease, bareboat charter, or conditional sale agreement with respect to a vessel the term of which (including any option period) is for a period of 20 years or more.
A contract entered into under subsection (a) may include options for the United States to purchase one or more of the vessels covered by the contract at any time during, or at the end of, the contract period (including any option period) upon payment of an amount equal to the lesser of (1) the unamortized portion of the cost of the vessel plus amounts incurred in connection with the termination of the financing arrangements associated with the vessel, or (2) the fair market value of the vessel.
The Secretary shall require in any contract entered into under this section that each vessel to which the contract applies—
shall have been constructed in a shipyard within the United States; and
upon delivery, shall be documented under the laws of the United States.
The Secretary may operate a vessel held by the Secretary under a long-term lease under this section through a contract with a United States corporation with experience in the operation of vessels for the United States. Any such contract shall be for a term as determined by the Secretary.
The Secretary may provide a crew for any such vessel using civil service mariners only after an evaluation taking into account—
the fully burdened cost of a civil service crew over the expected useful life of the vessel;
the effect on the private sector manpower pool; and
the operational requirements of the Department of the Navy.
The Secretary may waive the applicability of subsection (b)(2) of section 3672 and section 3675 of this title to a contract authorized by law as provided in subsection (b) if the Secretary makes the following findings with respect to that contract:
The need for the vessels or services to be provided under the contract is expected to remain substantially unchanged during the contemplated contract or option period.
There is a reasonable expectation that throughout the contemplated contract or option period the Secretary of the Navy (or, if the contract is for services to be provided to, and funded by, another military department, the Secretary of that military department) will request funding for the contract at the level required to avoid contract cancellation.
The timeliness of consideration of the contract by Congress is such that such a waiver is in the interest of the United States.
The Secretary shall submit a notice of any waiver under paragraph (1) to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives.
If a contract entered into under this section is terminated, the costs of such termination may be paid from—
amounts originally made available for performance of the contract;
amounts currently available for operation and maintenance of the type of vessels or services concerned and not otherwise obligated; or
funds appropriated for those costs.
Source credit: (Added Pub. L. 106–65, div. A, title X, § 1014(a)(1), Oct. 5, 1999, 113 Stat. 741, § 7233; renumbered § 8633, Pub. L. 115–232, div. A, title VIII, § 807(d)(1), Aug. 13, 2018, 132 Stat. 1836; Pub. L. 116–283, div. A, title XVIII, § 1883(b)(2), Jan. 1, 2021, 134 Stat. 4294.)
- 1999Enacted · Pub. L. 106-65 · 113 Stat. 741
- 2018Amended · Pub. L. 115-232 · 132 Stat. 1836
- 2021Amended · Pub. L. 116-283 · 134 Stat. 4294
A history note hasn’t been published yet. The record shows enactment by Pub. L. 106-65 on 1999-10-05.
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