After several years of tight funding, 2026 is shaping up to be a significant year for the U.S. Maritime Administration’s (MARAD) Small Shipyard Grant Program. Congress delivered a major funding increase in the fiscal year 2026 appropriations bill, underscoring a growing recognition on Capitol Hill that small shipyards play a critical role in supporting the nation’s maritime economy—and the passenger vessel operators who depend on them.
A Major Funding Increase In FY26
For fiscal year 2026, Congress appropriated $35 million for the Small Shipyard Grant Program—up from $8.75 million in FY25. That fourfold increase represents the program’s strongest funding level in recent history and reflects renewed bipartisan support for domestic shipyard capacity.
For years, demand for these grants has far outpaced available funding. Many strong applications went unfunded simply because the program did not have sufficient resources. The FY26 increase is an important step toward closing that gap and allowing more shipyards to move forward with needed investments.
Building Toward A Larger Program
Beyond the immediate funding boost, there are signs that policymakers are thinking more expansively about the program’s future.
Congress has increased the program’s authorization level to $105 million annually, a substantial jump that signals long-term intent to grow the program. While authorization does not guarantee funding, it establishes a clear benchmark for what Congress believes the program should support.
The administration has echoed that approach. The president’s FY27 budget request also calls for $105 million for the program, aligning with the new authorization level and reinforcing momentum for continued growth.
Taken together, these developments suggest that the Small Shipyard Grant Program is gaining traction as a key tool for strengthening the U.S. maritime industrial base.
Why This Matters For PVA Members
For Passenger Vessel Association members, the Small Shipyard Grant Program has real, practical implications.
The program, administered by MARAD, provides funding to qualified small shipyards to support capital improvements, workforce training, and facility upgrades. Those investments, in turn, help shipyards operate more efficiently, expand capacity, and adopt modern technologies.
For vessel operators, that translates into tangible benefits: more capable shipyards, shorter repair timelines, improved reliability, and better long-term value in vessel construction and maintenance.
In short, when small shipyards are stronger, the entire passenger vessel industry benefits.
Preparing For Future Grant Opportunities
The Small Shipyard Grant Program moves quickly once funding is announced, so the most successful applicants tend to plan ahead rather than wait for the opening of a grant cycle.
The U.S. Maritime Administration typically releases grant opportunities with a relatively short application window. That means shipyards that already have a clear idea of what they want to do and how they plan to do it, are in the best position to compete.
For PVA vessel members, this creates an opportunity to stay engaged with your shipyard partners even outside of an active funding cycle. Conversations about future vessel construction, repair needs, or facility upgrades can help identify projects that may be a good fit for grant funding down the road.
Conversations about future vessel construction, repair needs, or facility upgrades can help identify projects that may be a good fit for grant funding down the road.
Generally, the strongest applications are built around practical, well-defined projects, whether that’s upgrading equipment, expanding capacity, or investing in workforce training. These projects also tend to reflect real operational needs, not ideas developed solely for the purpose of applying for a grant.
The bottom line is simple: even if a grant opportunity isn’t immediately on the horizon, it’s worth thinking ahead. Shipyards and operators that take the time to plan and coordinate are better positioned to take advantage of funding when it becomes available.
Looking Ahead
The FY26 funding increase is a major win for the maritime industry, but it is also part of a broader, ongoing effort.Even at $35 million, demand for Small Shipyard Grant funding will likely continue to exceed supply. The new $105 million authorization—and the administration’s matching FY27 budget request—point to a larger vision for the program, but continued advocacy will be important to turn that vision into sustained funding.
For the passenger vessel industry, the takeaway is clear: a strong network of small shipyards is essential to keeping vessels operating safely, efficiently, and competitively. The Small Shipyard Grant Program remains one of the most effective federal tools for supporting that network—and 2026 may mark the beginning of a new chapter in its growth.
Richard Patch is the Legislative Director of the Passenger Vessel Association.