Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 4028 APRIL 2017 • FOGHORN REGULATORYREPORT its opening summary. “A longtime material cost index in Navy shipbuild- ing is the steel –vessel index. It is a weighted average of three Bureau of Labor Statistics (BLS) producer price indexes (45 percent iron and steel, 40 percent general-purpose machinery and equipment, and 15 percent elec- trical machinery and equipment). One criticism of the steel-vessel index is that it does not accurately cover the materials used in building a modern ship”. From our point of view, steel costs here understate structural impacts in the passenger vessel industry. Our industry has vessel segments that are construct- ed of wood, composites, aluminum or a combination. Since materials impact weight and maintenance there is often motivation to not build of steel. Repairs to these other materials may not permit the flexibility of steel where experience and availability of necessary labor skills is more prevalent. The degree to which these ship- building related indexes may or may not fit specific areas of the passenger vessel industry and its repair/replace scenarios leaves some room for debate, but their credibility for this rulemak- ing is far superior to the Coast Guard’s choice of CPI-U. It should also be noted that there is an inescapable complicat- ing factor not reflected and that is the circumstances when repairs must be made. Much of the passenger vessel industry is seasonal and other business relies on a reputation for reliability such as ferry service. A casualty often means that repairs must be made regardless of cost. One member that needed a pro- pulsion shaft machined paid a triple overtime labor rate for three days to be able to restore the vessel and avoid a lost capability at a critical time leading that would have led to lost income and lost credibility in the marketplace. This is a more typical post causality conse- quence that would lead to understating the straight-time labor captured in the BLS statistics where building is a more controlled cost due to long lead time planning and scheduling. The Coast Guard’s recommended levels are not supportable at $72,000 and $200,000. Based on the other indices noted above, the Passenger Vessel Association has recommend that the reporting threshold for CG Form 2692 be set at $100,000 and the serious marine incident maintain its 4-to-1 ratio with that threshold and become $400,000. The PVA docket comments can be found at Regulations.gov by entering Coast Guard Docket No. USCG-2016- 0748 in the search option. n