Small Shipyard Grant Funding Challenges and Opportunities

MARAD is currently reviewing 172 applications requesting a combined $162.7 million in FY 2026 grant funding, all competing for the $35 million available through the Small Shipyard Grant Program (SSGP). While the FY 2026 appropriation represented a significant increase from the $8.75 million provided in each of the previous two years, the demand for funding continues to far exceed available resources.

The fact that small shipyards requested more than $162 million in grant funding speaks volumes about the popularity and importance of the program. It also likely understates the true need, given the substantial backlog of capital improvement, modernization, and workforce training projects throughout the industry.

2027 funding outlook

While MARAD evaluates FY 2026 applications, Congress has already begun work on funding the SSGP for FY 2027. The federal budget process is now fully underway, and early developments have highlighted both strong support for the program and the challenges that remain ahead.

President Trump's FY 2027 budget request launched the appropriations season by proposing $105 million for the SSGP (see page 925). The Small Shipyard Grant Coalition (Coalition) fully supports this request, which would represent a significant—and necessary—increase over recent funding levels.

Following the President's proposal, leaders of the US House Transportation & Infrastructure Committee's Subcommittee on Coast Guard and Maritime Transportation, Chairman Mike Ezell (R-MS-04) and Ranking Member Salud Carbajal (D-CA-24) led a bipartisan letter requesting $105 million for the program. The letter was signed by 33 additional Members of Congress and submitted to the leadership of the US House Appropriations Subcommittee on Transportation, Housing and Urban Development. The effort was backed by bipartisan leaders from both the full Committee and the maritime subcommittee, and garnered the second-highest number of signatories in the past decade.

Vigor dry dock in Ketchikan, courtesy of Steve Schar.

Support has been equally strong in the US Senate. Senators Bill Cassidy (R-LA) and Tammy Baldwin (D-WI), joined by 17 of their colleagues, submitted a bipartisan request urging the US Senate Appropriations Subcommittee on Transportation, Housing and Urban Development to fund the SSGP at the President's requested level of $105 million.

Additional support for the program was evident during yesterday's US House Transportation and Infrastructure's Committee Subcommittee on Coast Guard and Maritime Transportation hearing on MARAD’s FY2027 budget request; Full Committee Ranking Member Rick Larsen (D-WA-02) described the President’s $105 million proposal for the grant program as the “upside” of the budget and criticized the proposal to combine large and small shipyard grants as a “bad idea”. In response, Administrator Carmel professed, “I am a strong supporter of small shipyards” (link to hearing video, with the exchange starting at 56:12). Other Members of Congress also highlighted the importance of small shipyards and the critical role the grant program plays in supporting the nation's maritime industrial base.

The Coalition's advocacy efforts have also gained momentum. Earlier this year, we hosted our annual Washington, D.C., fly-in, bringing together shipyard representatives and industry stakeholders together to meet with legislative and executive branch officials. Participants highlighted the importance of the program and made the case for increased investment in America's small shipyards and made direct asks to their Senators to support the SSGP at $105 million.

Despite broad bipartisan support and clear evidence of demand, the federal appropriations process remains uncertain. This week, the US House Appropriations Committee marked up its FY 2027 Transportation, Housing and Urban Development spending bill and proposed reducing funding for the SSGP to $30 million—$5 million below the FY 2026 level and far below both the President's request and the requests submitted by Congressional champions of the program.

As the FY 2027 appropriations process moves forward, much is at stake. The contrast between demonstrated industry demand, bipartisan congressional support, and the House's proposed funding reduction underscores the importance of continued advocacy in the months ahead. Your involvement has never been more important, if modernization of America's small shipyards is to become a true national priority.

What happens next

The US Senate Appropriations Committee is expected to consider funding for the SSGP in the coming months. If the Senate side proposes a funding level different from the House's current $30 million proposal, the two chambers will ultimately need to negotiate a final number.

For small shipyards, maritime manufacturers, and advocates, the months ahead will be critical. Congressional support for the SSGP has historically been bipartisan, but final funding outcomes often depend on broader budget negotiations and competing federal priorities. The Coalition will be closely watching committee actions, engaging with lawmakers, and continuing to make the case that sustained investment in America's small shipyards strengthens domestic shipbuilding capacity, supports workforce development, and enhances the nation's maritime industrial base.

Until Congress completes the appropriations process, the final FY 2027 funding level for the SSGP remains uncertain. However, with strong demand for the program and continued support from industry and congressional champions, advocates remain focused on securing the highest possible funding level for the year ahead.

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