§53204 Effectiveness of Operating Agreements

Summary

Allows the Secretary to make Operating Agreements starting in fiscal year 2021. Each agreement lasts one fiscal year and can be renewed each year if money is provided. Vessels chartered to the United States can get payments under these agreements. If a contractor seriously breaks the agreement, the Secretary must tell them, give a chance to fix it, and end the agreement if they do not comply. If the contractor gives at least 60 days’ notice, the contractor can end the agreement on the date it names. If, by the first day of a fiscal year, there is not enough money for all agreements, the Secretary must tell three congressional committees (Senate Armed Services; Senate Commerce, Science, and Transportation; and House Armed Services) that agreements without funding will not be renewed unless funds arrive by the 60th day. If only part of the money is provided by day 60, the Secretary and the Operating Agency will choose which vessels keep agreements based on national security need. If no funds are provided, no agreements are renewed, contractors are released, and final payments follow section 53206. If funds show up later, an agreement not renewed can be reinstated if the Secretary (with the Operating Agency) and the contractor agree and the vessel still meets section 53202 (ignoring subsection 53202(b)(3)). If funds are not provided by day 60 and an agreement is not renewed, the vessel is freed from the agreement, may be reflagged to an acceptable foreign registry despite section 56101, and, if chapter 563 then applies, may be requisitioned under chapter 563.