Op-Ed: The Scripps Award Sets a Precedent Small U.S. Shipyards Cannot Survive
Scripps Institution of Oceanography is building its next coastal research vessel in Chile. If that award stands as the model for how publicly funded institutions replace their fleets, the small American shipyards that build this country’s research vessels lose a market they cannot survive without.
MarineLink.com reported the award in August: a 124-foot vessel for Scripps, part of the University of California San Diego, going to ASENAV in Valdivia, Chile. Qualified U.S. yards competed for it and came in under the project’s publicly stated budget. The work is leaving the country anyway. That is why eleven U.S. shipyards that normally compete against each other signed a joint letter asking the Senate Commerce Committee and the House Transportation and Infrastructure Committee to examine how the research vessel exemption is being applied to publicly funded vessels, and whether the guidance or the law needs tightening before this becomes precedent.
One Award Becomes the Template
University and public-agency research vessels are a substantial share of the order book at the yard I work for, and we are far from alone. I cannot plan around a whole sales vertical disappearing. With tariffs pushing prices up and private-sector orders feeling it, the public side of the order book matters more. A small yard stays healthy by keeping its verticals in balance, so government work carries it through the valleys in private spending and private work returns the favor.
Scripps is one of the most respected names in oceanography. It is also a member of UNOLS, the University-National Oceanographic Laboratory System, whose members operate the U.S. academic research fleet and face the same replacement decisions. When Scripps buys foreign, every fleet manager at the other UNOLS institutions learns the route is open, and as research budgets tighten everywhere, more vessel builds go offshore.
How the Exemption Works
Under the Jones Act and the Passenger Vessel Services Act, a vessel carrying cargo or passengers between U.S. points has to be built in the United States. Federal law carves out oceanographic research vessels by treating them as not engaged in trade or commerce. That holds even when the operator is paid to charter the vessel, oftentimes with NSF or NOAA grant money, so the taxpayer is funding the charter too. Customs and Border Protection reads that carve-out narrowly: the vessel has to be used solely for research, and so do the people aboard.
Inside those limits, an institution can buy a hull anywhere in the world and run it between U.S. ports. The mechanism is the Customs letter ruling, a process that runs between Customs and the party asking. Nobody else is notified or invited to comment before a ruling issues, which leaves the domestic yards and operators it affects without a voice. Customs’ own regulation, 19 C.F.R. § 177.9, says a ruling letter covers only the transaction it describes, case by case, and that no other person should rely on it. In practice, a ruling written for one vessel gets stretched to cover the research vessels that come after it, without a vote in Congress. The Offshore Marine Service Association and the Shipbuilders Council of America are challenging Customs’ Jones Act letter rulings in federal court, and the case is on appeal.
The Comparison is Tilted Before Bids Open
A U.S. yard pays tariff-driven prices for imported aluminum, steel, and equipment. A finished vessel built abroad can enter the country under a duty-free tariff classification. The policy meant to strengthen American manufacturing raises the domestic builder’s costs and leaves the completed foreign boat untouched. The foreign yard will win that comparison on price more often than not.
What Leaves with the Work
One vessel of this size is tens of millions of dollars in fabrication, systems integration, installation, and commissioning work for skilled trades and engineers, plus orders for the domestic suppliers behind them. Small shipyards cannot warehouse a skilled workforce between contracts. When the work goes, the experienced welders, fitters, electricians, and painters who took years to train move on to other industries, and the capacity does not come back on command. These are the same yards the country expects to be there when the Navy or the Coast Guard needs small-vessel capacity.
The Fix
Steel has not been cut on the Scripps vessel, and the next university research vessels are already on drawing boards. Congress, Customs, or the White House has a narrow window to settle this before one award hardens into standard practice.
Congress could require that a research vessel bought with public money for work in U.S. waters be built in a U.S. yard whenever an interested, qualified domestic yard bids within the buyer’s budget. Customs could open its letter-ruling process so the domestic yards and operators a ruling affects get notice and a chance to comment. The White House could act without new legislation. Section 232 of the Trade Expansion Act allows tariffs on imports that threaten national security, and vessels doing cutting-edge research for NSF, NOAA, or the Office of Naval Research are exactly where that concern applies. A tariff on imported vessels, wherever interested and qualified domestic yards are ready to build them, would put foreign and domestic bids back on equal footing.
Under any of these, research still gets its ships, and the yards that build them are still here to build the next ones.
* As published in the October 2026 edition of Marine News. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Marine News | MarineLink.com.
