Federal Ships:

Policy Changes in the Disposal of Surplus Ships

NSIAD-98-17R: Published: Oct 17, 1997. Publicly Released: Nov 7, 1997.

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David R. Warren
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Pursuant to a congressional request, GAO provided information on a major shift in policy by the Environmental Protection Agency (EPA) and the Navy as it relates to the disposal of surplus ships for scrapping.

GAO noted that: (1) recognizing a need to reduce its backlog of about 100 surplus ships and the potential for increased revenues from sales of ships for overseas scrapping, the Navy negotiated an agreement with the Environmental Protection Agency (EPA), effective on August 8, 1997, to allow its surplus ships to be exported for scrapping; (2) except for certain aircraft carriers and nuclear powered ships that will not be scrapped overseas for national security reasons, all other obsolete combatant ships may be scrapped overseas as long as they have been properly demilitarized during the inactivation process; (3) the agreement allows Navy ships to be exported for scrap if liquid polychlorinated biphenyls (PCBs) are removed; (4) items containing solid PCBs must also be removed if they are readily removable and if their removal does not jeopardize the ship's structural integrity; (5) the agreement also requires the Navy to notify EPA prior to export of a ship and specifies that EPA notify the countries where ships will be scrapped; (6) this agreement will remain in effect until EPA's final rule on PCBs is issued, and it is expected that the governing language in the final rule will be consistent with the approaches taken in the agreement; (7) the Navy and the Defense Reutilization and Marketing Service are now developing procedures to be used for sale of ships for overseas scrapping; and (8) further, Maritime Administration ship disposal program managers advised GAO that they are seeking a similar agreement with EPA to allow them to resume exporting its 70 surplus ships for overseas scrapping.

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