JOC Staff | Jan 24, 2013 3:34PM EST
Liberty Maritime Corp. sued the Maritime Administration, accusing the agency of awarding slots in the Maritime Security Program to companies whose ships don’t qualify for MSP’s U.S.-flag subsidies.
Liberty and its affiliated companies, based in Lake Success, N.Y., filed the lawsuit in U.S. District Court for the Eastern District of New York.
The lawsuit claims Marad improperly transferred operating agreements for two ships in the MSP program to companies that aren’t U.S.-controlled.
The suit also claims Marad violated its regulations in approving an MSP replacement vessel that wasn’t at least as militarily useful as the ship it replaced, and that Marad ignored Liberty’s requests for information explaining the agency’s decision.
Liberty contends that at least one of its ships should have been received one of the MSP slots that Marad awarded during the last several years. Liberty Global Logistics, one of the lawsuit’s plaintiffs, has one ship in MSP.
MSP was established in 1999 to provide annual subsidies to help offset the higher costs of U.S.-flag merchant vessels that would be available for defense needs. The program provides 60 ships with annual subsidies of $3.1 million apiece. MSP was extended this month through 2025.
Most MSP contractors are U.S.-based units of overseas companies, but hire U.S. seafarers are considered by Marad to be under control of U.S. citizens.