WA-based boat builder laments federal funding ‘chaos' as vessels for Ukraine in peril

Yahoo

05-03-2025

The CEO of Bremerton-based SAFE Boats International said at a Tuesday press briefing that recent cutoffs of already-budgeted federal funding was damaging his company's boat-building work, particularly in Tacoma.
SAFE Boats CEO Richard Schwarz spoke as part of a press briefing organized by U.S. Sen. Patty Murray (D-Washington) and attended by various Washington state business leaders affected by recent funding freezes ordered by the Trump administration.
Schwarz said that in the month or so following the executive order from President Trump to pause foreign-assistance programs and implement a 90-day review, SAFE Boats received 'stop-work orders for all of our foreign military and security cooperation contracts that were issued through the State Department's Bureau of International Narcotics and Law Enforcement.'
Schwarz noted that 'the majority of those boats were already in production and partially completed.'
After that, according to Schwarz, the company received additional stop-work orders for the Mark VI patrol boats being built for Ukraine, as well as the weapon systems for Coast Guard cutters being refurbished for Ukraine by another shipyard.
'Ukraine contract was stopped, even though we have four boats completely done, two more in production, and have ordered most of the long-lead materials for the remaining two,' he noted. 'And now we're being asked questions that lead us to at least fear that it's possible that contract could be canceled in its entirety.'
He said the stop-work orders had affected about 90 of the company's 300 workers.
'Probably the most serious immediate concern is that late last month we were also notified that we were not going to be paid for work that we had completed on these programs,' he said. 'It was where invoices were issued after the executive order, but prior to the stop-work orders on those contracts.'
That affected 'several million dollars worth of invoices,' he added.
Schwarz explained that 99% of his business is with government customers, including state and local first responders and law enforcement, the U.S. military, Coast Guard, Border Patrol and foreign military, 'particularly smaller allies like Costa Rica, Panama and Colombia.' His firm delivers boats to about 70 countries.
He noted the boats were designed to 'better police their waters, essentially stop human trafficking, drug trafficking before it arrives at our shores.'
The News Tribune has previously reported on SAFE Boat's work on the Ukraine project, first in 2021 when the company announced it would reopen its Tacoma facility for the effort and again in 2023 for a status update when SAFE Boats was creating and outfitting eight Mark VI patrol boats in a more-than $100 million contract with the U.S. Navy for Ukraine, along with providing operational training.
The SAFE Boats Mark VI is an 85-foot patrol boat previously only used by the U.S. Navy.
The project was the result of plans in the works long before Russia invaded Ukraine on Feb. 24, 2022.
In June 2020, the U.S. Department of Defense announced Ukraine was set to purchase up to $600 million in military patrol boats and related equipment.
Fast forward to Tuesday, and Schwarz essentially described trying to make the best of an uncertain situation, noting the Tacoma facility 'was reopened specifically for this contract.'
'We have about 60 people there now, and they were all really dedicated to working on the Mark VI program for Ukraine,' he said.
'In the short term, we're moving work around and bringing forward some of the other boats that we had in our order backlog, so we're keeping that team busy and working.'
He said the company hoped for some additional opportunities for work, 'as well as hopefully some good news on the Mark VI program ... because this is really a program that's focused on a post-war rebuilding of the Ukrainian capabilities that will eventually become a priority and something that is important for the United States as well as for Ukraine.'
Murray reiterated that the current funding freeze ran counter to what was expected by the businesses and their representatives speaking Tuesday.
'All of this funding went through Congress. It was scrutinized,' she said. 'These awards were out there, and now a new administration came in and said, 'Sorry, it's frozen,' putting lives, economy, everything at real risk.'
She added, 'People need to understand this is having a huge impact in communities across our state and across our country.'
SAFE Boat's issues over its Ukraine work also came before the latest in deteriorating U.S.-Ukraine relations, with the Trump administration's decision this week to suspend delivery of all military aid to Ukraine following the explosive confrontation Friday at the White House between Trump and Ukrainian President Volodymyr Zelenskyy.
The Associated Press reported Monday that a White House official said Trump is focused on reaching a peace deal and wants Zelenskyy 'committed' to that goal. The official added that the United States was 'pausing and reviewing' its aid to 'ensure that it is contributing to a solution.'
In the meantime, Schwarz noted that there was 'a lot of uncertainty for the team, a lot of disruption and chaos for them and the millions of dollars in unpaid invoices, unfortunately, all tied to that program ... so certainly some causes for concern in the short term.'
Other officials who spoke at Tuesday's briefing included Michael Frazier, executive director of Viva Farms in Skagit County; Rena Shawver, executive director of Okanogan County Community Action Council in Okanogan; and Greg Franks, president of Manor Management Services, the management agency for Smith Tower in Vancouver.
The press event was one of two back-to-back sessions hosted by Murray ahead of Trump's address to the joint session of Congress Tuesday evening. The second virtual briefing included federal workers from Washington state affected by job cuts, who described their circumstances and what the loss of expertise at their respective agencies would mean for future services going forward. Those agencies included the U.S. Department of Veterans Affairs, the Consumer Financial Protection Bureau, National Park Service and the U.S. Forest Service.
Previous reporting by The News Tribune contributed to this report.