Docket No. USCG–2014–0063 - Considerations for Further Development

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UNITED STATES COAST GUARD

CONSIDERATIONS FOR FURTHER DEVELOPMENT –

DOCKET NUMBER USCG – 2014 – 0063, “REQUIREMENTS FOR MODUS AND OTHER VESSELS CONDUCTING OUTER CONTINENTAL SHELF ACTIVITIES WITH DYNAMIC POSITIONING SYSTEMS”

14 April 2015

Report on Comments - Docket Number USCG – 2014 – 0063

(R)Evolution Consulting & Engineering Services 2 of 19 14 April 2015

DOCUMENT INFORMATION

REVISION HISTORY

Rev Date Description By Checked Approved

A 14/04/2015 Draft for USCG Review & Consideration CNF

AMENDMENT RECORD

Revision Description of Changes

DISCLAIMER

This report is intended for the sole use of the person or company to whom it is addressed and no liability of any nature whatsoever shall be assumed to any other party in respect of its contents. As to the addressee, (R)EVOLUTION CONSULTING & ENGINEERING SERVICES, LLC (the Company) shall not be liable for any loss or damage whatsoever suffered by virtue of any act, omission or default (whether arising by negligence or otherwise) by the Company or any of its servants.



EXECUTIVE SUMMARY

Per the instructions provided in Department of Homeland Security, USCG Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Proposed Rules, this document is submitted in response to the requested call for comments on docket number USCG – 2014 – 0063, “Requirements for MODUs and Other Vessels Conducting Outer Continental Shelf Activities With Dynamic Positioning Systems.”

This document is provided – without any assumption of exclusive rights – for the consideration, revision, and potential application by the USCG and DPSAOs.

Responses, Comments, and Suggestions are Welcome

Any comments to the material contained herein are welcome and should be addressed to Chad N. Fuhrmann by email at [email protected] or by phone at (920) 750-8844.

About (R)Evolution Consulting & Engineering Services, LLC

(R)Evolution Consulting & Engineering Services, LLC is an independent third party consulting organization providing dynamic positioning and marine assurance services to the Marine Industry. All services are guided by the core values of quality, trust, and integrity and in keeping with the Company’s core mission of protecting commercial viability through integrity assurance.

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CONTENTS

1. OVERVIEW .............................................................................................................................................. 5

1.1 Instruction .................................................................................................................................................. 5 1.2 Purpose ..................................................................................................................................................... 5 1.3 Scope of Report ........................................................................................................................................ 5 1.4 Structure .................................................................................................................................................... 5

2. NPRM – COMMENTS AND CONCERNS ................................................................................................ 6

2.1 Background ............................................................................................................................................... 6 2.2 Specific Guidance, Reference, Definitions, etc. (§62.10, et al) ................................................................. 6 2.3 Definition of Reliability (pp. 70946, 70949, etc.) ........................................................................................ 7 2.4 Definition of Risk (pp. 70946, 70947, etc.) ................................................................................................ 7 2.5 Dynamic Positioning System Assurance Organizations (§61.50) ............................................................. 7 2.6 DP incident investigations (§61.50-4, pp. 70957, 70966, etc.) .................................................................. 8 2.7 DP System Software (§61.50-5 (b)) .......................................................................................................... 8 2.8 Financial Impact Analysis .......................................................................................................................... 8 2.9 DPO/DPOQ (p. 70986, §140.310, §140.315, etc.) .................................................................................... 8

3. PROPOSED – MINIMUM STANDARDS FOR RECOGNITION AS A DP SYSTEM ASSURANCE ORGANIZATION (DPSAO) OR DP ASSURANCE PROVIDER (DPAP) ................................................. 9

3.1 Background ............................................................................................................................................... 9 3.2 Purpose ..................................................................................................................................................... 9 3.3 Minimum Standards for Recognition as a DP System Assurance Organizations ..................................... 9 3.4 Minimum Standards for Recognition as a DP Assurance Provider ......................................................... 11

4. PROPOSED – USCG/DPSAO SURVEYOR DP FAMILIARIZATION/TRAINING AND DP ASSURANCE MONITORING PROGRAMS........................................................................................... 12

4.1 Background ............................................................................................................................................. 12 4.2 Purpose ................................................................................................................................................... 12 4.3 Development and Implementation of DP Rules & Regulations ............................................................... 12 4.4 Annual Trials Program Evolution ............................................................................................................. 13 4.5 Surveyor Training & Development .......................................................................................................... 13 4.6 Continued Technical & Advisory Support ................................................................................................ 14

APPENDIX A Original Notes Presented in Response to NPRM ..................................................................... 15



1. OVERVIEW

1.1 Instruction

1.1.1 Per the instructions provided in DHS, USCG Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Proposed Rules, this document is submitted in response to the requested call for comments on docket number USCG – 2014 – 0063, “Requirements for MODUs and Other Vessels Conducting Outer Continental Shelf Activities With Dynamic Positioning Systems.”

1.2 Purpose

1.2.1 Through the issuance of the subject NPRM, the USCG set to become the first regulatory body to develop regulations directly affecting the dynamic positioning sector. As the USCG and Class Societies gain more experience in DP and further gain confidence in regulating it, the offshore industry can expect increased cooperation between regulatory bodies that will foreshadow revolutionary changes in the offshore sector. Ideally, by taking the initial step toward providing auditable operational standards for the offshore industry this proposed rulemaking will provide a basis for the industry to grow and improve in safety and reliability.

1.2.2 It should be noted that the DP sector will need to be approached with due consideration of the unique operating environment and with the highest respect for the level of safety attained up to this point by a largely self-regulated industry. Ignoring or downplaying the collective industry experience of vessel owners/operators, third party consultants, and other concerned parties may unwittingly set a precedent of ineffective regulation, resulting in a net effect that may be worse than no regulation whatsoever.

1.2.3 The comments and suggestions provided within this report are submitted with an industry wide cooperative approach in mind, with a goal of establishing an open discourse and intelligent dialogue between all parties to support the industry in growth and evolution. As such, this document is provided without any assumption of exclusive rights, for the consideration, revision, and potential application by the USCG and DPSAOs.

1.3 Scope of Report

1.3.1 This document contains the response to the USCG NPRM on the use of dynamic positioning on the Outer Continental Shelf. In addition, sections of the report include outline proposals for consideration developed to address specific concerns regarding the NPRM, as noted below.

1.3.2 DPSAO Standards for Consideration – includes proposed standards for determining an organization’s status as a DP System Assurance Organization as well as individuals providing DP assurance services.

1.3.3 USCG / DPSAO Surveyor DP Familiarization Program – includes a program outline designed for the familiarization of USCG and DPSAO surveyors who will be involved in the application of the rules, regulations, and requirements outlined in the NPRM.

1.4 Structure

1.4.1 All direct responses to concerns highlighted through review and consideration of the content of the NPRM are included in the body of the report.

1.4.2 Appendices attached to the document include background information, reference material, and original documentation as necessary.



2. NPRM – COMMENTS AND CONCERNS

2.1 Background

2.1.1 The comments included in this document were initially presented on LinkedIn as part of a group discussion (www.linkedin.com/groups/USCG-NPRM-regarding-DP-regulation-2015932.S.5949695652979032066). Since initially being presented on that forum they have been revised and submitted to the official USCG docket (www.regulations.gov) – the version submitted to the docket is included in the Appendices. The comments contained in the body of this report have been further revised and edited as necessary.

2.1.2 The comments represent the thoughts and opinions of Chad N. Fuhrmann of (R)Evolution Consulting & Engineering Services, LLC. Furthermore, they are generated based on collective industry experience, comments, information, and insights gained from discussions with industry professionals and in DP-related industry groups.

2.2 Specific Guidance, Reference, Definitions, etc. (§62.10, et al)

2.2.1 As a general observation, more specific definitions are required. It is understood that the NPRM by nature must be nebulous enough to allow for application across a broad industry. However, unless developed and applied carefully, a set of rules attempting to cover an entire industry inevitably creates many grey areas. This can lead to conflicts and provides areas of loose interpretation resulting in parties that follow the letter of the law but not the intent either inadvertently or intentionally.

2.2.2 While IMCA standards are noted in the background material (pp. 70944 – 70985), some of the referenced IMCA standards are omitted from the actual proposed rules (pp. 70985 – 70994). Specifically, IMCA M117 is not directly reference in the proposed rules, only in the preamble.

2.2.3 As above, more definition is needed with regard to MTS guidance. MTS guidance is fluid and subject to alteration. The guidance is updated and revised frequently. Laying out some defined criteria for critical operations or perhaps even referencing a specific (i.e., dated) MTS document may assist.

2.2.4 Most significantly, there is a lack of definition of critical OCS activities. Definitions provided do not specifically include windfarm activities and other non-oil related projects. The definition seems to restrict these to “mineral” related projects.

2.2.5 Likewise, more clear guidance on simultaneous operations and categorization of critical operations for all assets involved in the support of same critical operations.

2.2.6 DP system requirements for critical activities (p. 70950). A recent joint BSEE/USCG Safety Alert (www.bsee.gov/uploadedFiles/BSEE/Regulations/Safety_Alerts/FINAL%20USCG-BSEE%20Joint%20DP%20Safety%20Alert.pdf) highlights a potential gap in the proposed rules. It has been confirmed by the USCG that the subject vessel was not a CLASSED DP vessel, counter to what the report states. Rather the vessel carried a single DP system – comparable to a DP 1 classed vessel – but did not carry an official DP 1 notation from a Class Society. This incident will be held up as an example of why the USCG wants to restrict defined critical operations on the OCS to DP Class 2 or 3 vessels but can simultaneously serve as an example of a potential loophole. It can be stated that this unclassed vessel does not fall under the proposed rules and is therefore a valid vessel to be chosen for the project – following the letter of the law, but not the intent. The diagram on page 70950 of the NPRM illustrates this. "Using a DP system to conduct OCS activities on US OCS?" The answer can be "No" because the system is not classed as a DP system. Thus, following the chart, there are "No Requirements." While this incident highlights the fact that responsibility falls to the charterers and owner/operators to rigorously vet their vessels and ensure that they are appropriate for a given task, it also demonstrates that while the USCG is attempting to mitigate risk by these proposed rules, the potential exists that they may create a an unintended situation if unclassed DP vessels are overlooked entirely. Consideration should be given for modifying and applying minimal DP 2/3 risk mitigation standards to DP 0/1 vessels such as company and vessel-specific DP 0/1 Operations Guidelines/Manuals and/or CAM, ASOG and other decision support tools as noted in the referenced joint Safety Alert.

http://www.linkedin.com/groups/USCG-NPRM-regarding-DP-regulation-2015932.S.5949695652979032066

http://www.regulations.gov/

http://www.bsee.gov/uploadedFiles/BSEE/Regulations/Safety_Alerts/FINAL%20USCG-BSEE%20Joint%20DP%20Safety%20Alert.pdf




2.3 Definition of Reliability (pp. 70946, 70949, etc.)

2.3.1 The use of the terms “reliable” and “reliability” is incorrect in reference to DP class. The DP class of the vessel is meant to be a direct reference to its level of redundancy and has little to do with reliability. Reliability comes primarily from the diligence in operating and maintaining the asset and adherence to recommended practices and the vessel's design.

2.3.2 In the same vein, the redundancy of the vessel is directly related to operating the vessel in accordance with its WCFDI. This may include an open or closed bus design.

2.4 Definition of Risk (pp. 70946, 70947, etc.)

2.4.1 Definition of “risk” is questionable and considers only consequences rather than both consequences and likelihood.

2.4.2 There are strong assumptions throughout that the class and size of the vessel dictates its level of risk. This may prove to be beneficial for the purposes of applying the requirements gradually across the industry as older vessels are transitioned into the program. In operation, however, this provides a potential loophole in the proposed rules. In keeping with earlier bullet points, recommended practices are applicable any time a vessel is operating in DP mode regardless of other factors. If a risk assessment is conducted to determine an acceptable level of redundancy for a given operation, it should only apply for open water operations that do not include manned diving operations or operating in the vicinity of any other vessel or unit. To apply differing levels of risk to Class 2 vs. 3 or 500 ton vs. 1600 ton (tonnage determination is not straightforward, either) vessels and include operations invites varied interpretations, perceived loopholes, and above all, confusion. In short, risk and criticality considerations should start with the specific operation being undertaken rather than on the size of vessel.

2.5 Dynamic Positioning System Assurance Organizations (§61.50)

2.5.1 NOTE: Please see Minimum Standards for Recognition as a DP System Assurance Organization (DPSAO) or DP Assurance Provider (DSAP) in a following section.

2.5.2 This guidance regarding DPSAOs provided in the NPRM in effect eliminate the role of truly independent third party assurance providers who are (granted, arguably) more prepared and capable of providing assurance services and in further capable of applying decades of practical experience. Class Societies may initially represent an attractive alternative to many of the stakeholders, allowing DP assurance services to be provided at the same time as annual inspections and related activities and at a reduced cost in comparison to third party assurance providers. However, Class Societies’ potential lack of both DP-specific industry experience and DP qualified resources may adversely affect the value of assurance services provided, resulting in an increased risk to operations, contrary to the NPRM’s obvious intent.

2.5.3 While Class Societies most certainly should play a role in DP assurance, most of these organizations currently lack the expertise and resources to fill this need. Likewise, presenting a Class Society as an automatic “DPSAO” makes many assumptions about the expertise of an organization and its employees. A DP trials program run by a Class Society is vastly different to a program run by an independent third party (or by the commercial arm of that same Class Society, if applicable). Class surveyors are not necessarily qualified to be DP surveyors. A distinction needs to be made between a DPSAO and an individual DP Assurance Provider (suggested terminology) in conjunction with consideration of an individual DP surveyor’s qualifications rather than assume their qualifications based on whether or not they are affiliated with an approved DPSAO.

2.5.4 There is ambiguity created in the definition of a DPSAO and its duties and responsibilities. DPSAOs appear to be given the responsibility of Class in many areas including plan approval, etc. Some distinction and separation needs to be considered between Class and independent third party organizations.



2.5.5 Further to the above, there is a heavy reliance on DPSAOs for incident investigation and reporting. The concern is that this will make third parties part of a de facto enforcement arm of the USCG. This creates an issue by taking the “independence” out of being an independent third party. Assurance providers offer their services free of conflicts of interest such as having physical assets, equipment, or operational software in the field. Likewise, there is an effort to have no direct ties to Class or regulatory agencies. An independent consulting organization’s core service is to provide objective review and analysis based on a recommended practice – normally over and above class or regulatory requirements. This independence serves as a clear distinction between Class, regulatory, and independent third party service providers and affords a level of guarantee against conflicts of interest. By putting reporting responsibilities for owner/operators on the shoulders of third parties that separation is clouded.

2.5.6 Liability related to the duties of the DPSAO – including incident reporting – is not explored in the NPRM. A designated DPSAO may be assuming a higher level of liability (and associated costs) along with the responsibility for incident reporting.

2.5.7 Further, any consequence for low reporting levels may fall to the DPSAO rather than on the vessels (or companies) that hold the ultimate determination of whether an incident is labeled as such and whether it is subsequently reported.

2.5.8 It is unclear how the DPSAO designation is determined for a specific vessel and/or company. A vessel’s Class Society could be assumed to be the default DPSAO. Alternatively, a contract to perform a DP related service (e.g., annual DP trials, suitability survey, OVID/CMID, etc.) may be assumed to indicate the default DPSAO, leading to confusion regarding responsibilities for incident reports, etc.

2.6 DP incident investigations (§61.50-4, pp. 70957, 70966, etc.)

2.6.1 Incident investigation/reporting responsibility should be shared between owner/operators, charterers, and equipment vendors and manufacturers. There are many risks in operation (human error – symptomatic and problematic, software failure, hardware failure, procedural failure, manufacturing flaw, etc.). While it may not be directly addressed, commercial interests generally trump learning opportunities for the industry. Requiring each stakeholder to play a part in incident investigations and reporting will provide additional transparency and provide assurances that important lessons are learned and potential failures of any variety are prevented.

2.7 DP System Software (§61.50-5 (b))

2.7.1 Due to concerns surrounding proprietary information, DP system manufacturers and software providers (e.g. Kongsberg, L3, GE, etc.) will need to carry the responsibility to provide adequate information to DPSAOs demonstrating due diligence in developing and testing software. DPSAOs (regardless of definition) are not capable of approving software packages, updates, etc. due to lack of specific knowledge of proprietary details and information. Nor is this information currently released to the general public (or, in many cases, the industry at large) by software providers even following DP incidents.

2.8 Financial Impact Analysis

2.8.1 Some of the costs outlined in the NPRM are inaccurate. References indicate that numbers are derived from transportation industry sectors that do not apply (e.g., Bureau of Labor Statistics, transportation surveyor). A $600 Annual DP Trial Program may be accurate for a Class DP survey (see DPSAO discussion points, above) if performed as part of an Annual Class Survey but is grossly inaccurate for the level of complexity required of IMCA, MTS, and generally accepted industry standards for Annual DP Trials.

2.9 DPO/DPOQ (p. 70986, §140.310, §140.315, etc.)

2.9.1 There are several references to DPOs and DPOQs being required to understand the FMEA, vessel specific documentation, etc. There is no clear definition of how this is gauged or how it is to be demonstrated. Familiarization documents are noted/mentioned and could potentially be linked to existing ISM/SMS programs for verification and tracking purposes. These systems are firmly in place and may provide the basis for and auditable training/competency assurance program.



3. PROPOSED – MINIMUM STANDARDS FOR RECOGNITION AS A DP SYSTEM ASSURANCE ORGANIZATION (DPSAO) OR DP ASSURANCE PROVIDER (DPAP)

3.1 Background

3.1.1 Industry stakeholders apply vetting principals to hardware and assets and demand much the same of personnel involved in vessel and DP operations. To adequately provide for the requirements outlined within the NPRM all organizations and individual surveyors should be likewise held to an auditable standard in the area of expertise for which they are responsible.

3.1.2 The following standards are based closely on CFR Title 46, Ch. I, Subchapter A, Part 8, Subpart B, Section 8.230 – Minimum Standards for a Recognized Classification Society.

3.2 Purpose

3.2.1 The proposed minimum standards outlined below provide a basis for determining an organization’s designation as a DPSAO as well as provide for the qualifications of individual surveyors – provisionally referred to as DP Assurance Providers (DPAP).

3.2.2 Incorporation of these, or similar, requirements will provide an auditable qualification process for established DPSAOs. These guidelines serve to further ensure that the personnel employed by DPSAOs for the purposes of vetting and surveying DP vessels and operating personnel are appropriately trained, experienced, and qualified in DP system assurance practices.

3.3 Minimum Standards for Recognition as a DP System Assurance Organizations

3.3.1 In order to receive recognition by the Coast Guard a DP System Assurance Organization (DPSAO) must:

1) Establish that it has functioned as a recognized source to the industry for providing guidance on recommended practice through participation in national and international industry groups (i.e., IMCA, MTS, OCIMF, NOSAC, etc.);

2) Establish that it has functioned as a DP assurance provider to vessel owner/operators, charterers, etc. for a minimum of 3 years, incorporating recognized industry guidelines as part of its assurance practices, and has played an active role in developing same;

3) Establish that it has a history of advising vessel owners, operators, charterers, and/or other industry stakeholders. Provide evidence of delivering guidance to clientele for the purposes of establishing internal assurance practices and in the implementation of appropriate corrective actions in addressing nonconformities and observations raised during DP trials, surveys and audits, including incidents, casualties, and cases of nonconformity with DP class rules;

4) Establish that it has a history of providing DP assurance services to wide-ranging vessel classes & types, service providers, and industry stakeholders;

5) Establish that it provides a recognized quality of DP assurance services to the industry through the range of services provided and exposure in the industry;

6) Demonstrate employment of adequately qualified personnel designated as DP Assurance Providers (as outlined in Sect. 3.4, below);

7) Verify that it retains qualified managerial staff and support personnel carrying qualifications and experience equivalent to a DPAP (if acting in that function), or similar to the DPAPs they employ (see DPAP qualifications, below);

8) Have adequate resources (or access to resources via qualified contracted personnel) including research, technical, and managerial staff, to ensure appropriate updating and maintaining of internal DP guidelines, trials procedures, and survey requirements;

https://www.law.cornell.edu/cfr/text/46

https://www.law.cornell.edu/cfr/text/46/chapter-I

https://www.law.cornell.edu/cfr/text/46/chapter-I/subchapter-A

https://www.law.cornell.edu/cfr/text/46/part-8

https://www.law.cornell.edu/cfr/text/46/part-8/subpart-B



9) Have, as above, adequate resources and established processes to ensure regular communications and interaction with the USCG concerning recurring DP related issues for purposes of trend analysis, reporting, and continuing development of rules and guidelines;

10) Have adequate resources and geographical coverage (or access to same via qualified contracted personnel) to carry out all plan review and vessel survey activities associated with delegated functions and USCG requirements;

11) Employ a minimum number of direct-employed surveyors (or access to qualified contracted personnel) to provide for the execution of required services, to the level necessary to carry out delegated functions, meet USCG survey requirements, and as deemed commercially appropriate for size of organization;

12) Employ contract surveyors only to the extent deemed necessary for execution of work and have adequate measures in place to verify and ensure a minimum level of qualification/experience of contract surveyors;

13) Have adequate criteria for hiring and qualifying surveyors and technical staff;

14) Have an adequate program for continued training and development of surveyors and technical staff. Said training and development should be structured, measured, monitored and auditable, and meet with USCG or equivalent approval;

15) Have a corporate office in the United States that provides a continuous management and administrative presence;

16) Maintain an internal quality system based on current industry quality standards (e.g., applicable ANSI, ISO standards or equivalent);

17) Determine classed vessels comply with appropriate DP class rules, during appropriate DP-related surveys, audits, inspections, trials, etc.;

18) Determine that attended vessels comply with all DP requirements related to industrial mission, delegated functions, etc. during appropriate surveys/inspections;

19) Monitor all activities related to industrial mission or delegated functions for consistency and required end-results;

20) Maintain and ensure compliance with a Code of Ethics that recognizes the inherent responsibility associated with delegation of authority;

21) Not be under the financial control of ship owners or shipbuilders, or of others engaged commercially in the manufacture, equipping, repair or operation of ships;

22) Not be financially dependent on a single commercial enterprise for its revenue;

23) Not have any business interest in, or share of ownership of, any vessel, asset, hardware, software, etc.; and

24) Not be involved in any activities which could result in a conflict of interest and have adequate measures in place to provide for the continued evaluation and monitoring of such activities.



3.4 Minimum Standards for Recognition as a DP Assurance Provider

3.4.1 Further to the above, an individual designated as a recognized DP Assurance Provider or employed as such by a recognized DPSAO – either by contract or direct employment – and/or otherwise serving as a DP Surveyor, Engineer, Auditor, Assessor, etc. must:

1) Demonstrate active membership and/or regular participation in industry groups (i.e., IMCA, MTS, NOSAC, OCIMF, etc.);

2) Verify and confirm that they have functioned as, or in the capacity of, one or more of the following;

a. A DP assurance provider (by contract or direct employment) to vessel owner/operators, charterers, etc. for no less than 2 years incorporating and practicing the assurance principles as provided in recognized industry guidelines, and that they have played an active role in establishing same;

b. A SDPO (per recognized standards), licensed mariner (Second Officer or higher), or licensed engineer (Second Engineer or higher) on Classed DP vessels;

c. A DP service provider, in the field(s) of DP system installation and maintenance, project management, or other service directly involving DP systems and have adequate training and development records to ensure qualifications as a DP surveyor;

d. A direct employee or contractor to an established DPSAO, having undergone DPAP development and training through an established training program;

3) Demonstrate continued training and development as a DP surveyor via structured, measured, and auditable coursework set up according to industry recognized standards such as IMCA, USCG, Class Society, or similar;

4) Establish by record of employment or association with a DPSAO (as outlined in Sect. 3.3.1, above) – or through an auditable training/development scheme – that they have provided a recognized quality of DP assurance services and that they have a history of advising industry stakeholders regarding services required of DPSAOs as noted herein.

5) Confirm that they are not currently employed by an owner/operator of any offshore vessel, asset, hardware, DP system software, or similar;

6) Likewise confirm that they do not have any significant and/or direct business interest in, or share of ownership of, any vessel, asset, hardware, DP system software, etc.; and

7) Not be involved in any other activities which could result in a conflict of interest.



4. PROPOSED – USCG/DPSAO SURVEYOR DP FAMILIARIZATION/TRAINING AND DP ASSURANCE MONITORING PROGRAMS

4.1 Background

4.1.1 The need for DP assurance services has grown and the field itself has evolved significantly since the early 1990s. This due to both necessity and market demand resulting from a lack of uniformly accepted standardization, a tremendous increase in the application of DP technologies, increasing complexity of systems and operations, and a maturing (albeit slowly) realization of the risks and consequences involved in offshore projects and operations. Class societies (for the most part) have maintained a hands-off approach to DP assurance in favor of their more traditional roles in the maritime industry, leaving the DP assurance to specialized organizations in the form of independent third parties.

4.2 Purpose

4.2.1 Class Societies play a critical role in DP assurance, but may lack the expertise and resources to do so adequately. A cooperative effort of Class, regulatory, and independent third party service providers can potentially result in all stakeholders improving together through the application of significant practical experience and via knowledge migration across an array of industry groups and DP related interests.

4.2.2 The proposed DP familiarization and training program outlined below provides a potential basis for training USCG surveyors and potential DPSAO surveyors (including both third party consultants, and Class surveyors/auditors). The program is thus provided – without any assumption of exclusive rights – for the consideration, revision, and potential application by the USCG and DPSAOs.

4.2.3 This program is designed to be applicable between DPSAOs, regulators, Class Societies, potential survey personnel (regardless of employer), energy majors, owner/operators, etc.

4.2.4 The program outlined herein is further intended to be provided across commercial boundaries, providing a platform for migration of industry knowledge and expertise in keeping with the core ethic of the NPRM, “to improve the safety of people and property involved in [DP] operations, and the protection of the environment in which they operate.”

4.3 Development and Implementation of DP Rules & Regulations

4.3.1 Designated DPSAO(s) to provide USCG with gap analyses comparing most pertinent existing industry rules, regulations, and guidance.

4.3.2 DPSAO(s) to provide USCG with guidance for the development of overarching DP vessel regulations based on the following:

Existing “best practice” industry guidance including (but not limited to) International Marine Contractors Association (IMCA), Marine Technology Society (MTS), etc.

Existing industry guidelines and standards such as energy majors, dive companies, etc.

Existing expertise and industry knowledge within third party independent assurance organizations

Rules and requirements as provided by international regulatory agencies and Classification Societies (USCG, ABS, DNV GL, LR. etc.)

4.3.3 DPSAO(s) to provide USCG with insight into an evolving industry that takes account of technological advances, revisions and modifications in international regulation, changes occurring as a result of industry events/incidents, etc.



4.4 Annual Trials Program Evolution

4.4.1 DP assurance service providers to attain necessary approval to become approved DPSAOs (as outlined within this document) for the purposes of creating and conducting FMEA Proving Trials, Annual Trials, five year FMEA Verification Trials, and other DP related services on behalf of USCG.

4.4.2 Approved DPSAOs to develop approved Annual Trials programs (on a vessel by vessel basis), on behalf of USCG, based on applicable requirements/regulations and accepted best practice concepts.

4.4.3 DPSAO(s) to provide qualified surveyors to execute each approved Annual Trials program on behalf of USCG and under direct observation of USCG surveyors/inspectors (and prospective DPSAO survey personnel) for purposes of training and developing USCG and prospective DPSAO personnel (see “Surveyor Training & Development Program” below).

4.4.4 DPSAO(s) – in cooperation with USCG – to provide expert analyses of completed Annual Trials Programs and review of Trials Reports and testing results.

Trials Reports and testing results to be used as part of a continuous development process for the analysis of existing and/or proposed DP rules and regulations.

Annual Trials Programs and subsequent professional reports developed by DPSAO(s) to be utilized as training aids for USCG and DPSAO surveyors/inspectors.

4.5 Surveyor Training & Development

4.5.1 Initial Basic DP Surveyor Training 5-day course conducted by DPSAO(s), at convenient location, covering the following:

FMEA development and understanding

Redundancy philosophy

Rules/Regulations vs. IMCA Guidelines & Industry Standards (Energy Majors, etc.)

Core testing requirements

Conducting Annual Trials

Interpreting and reporting findings from Annual Trials

4.5.2 Four part on board training for each team of USCG/DPSAO surveyors, conducted on vessels of varying types, industrial missions, ownership, etc.

Annual Trials #1 100% conducted by qualified DPSAO personnel

USCG and/or potential DPSAO surveyors are observers only, or provide basic support

Annual Trials #2 50% of trials conducted by USCG and/or potential DPSAO surveyors

DPSAO surveyor in supervisory role.

Annual Trials #3 Minimum of 50% of trials conducted by USCG and/or potential DPSAO surveyors

DPSAO surveyor in supervisory/advisory role.

Annual Trials #4 100% of trials conducted by USCG and/or potential DPSAO surveyors

DPSAO surveyor in advisory role only

USCG/DPSAO personnel training to be tracked by respective employers in cooperation with DPSAOs.

Performance and capabilities of surveyors will receive overall evaluation by respective employers and DPSAO on site surveyor. Additional on site and/or classroom training, if deemed necessary, to be conducted afterward.



4.5.3 Advanced/Refresher DP Surveyor Training, 1-3 day course conducted annually, or as necessary, covering the following:

Specific equipment, as deemed necessary, or by request of USCG/DPSAO

Assurance and guidance changes

Technological advancements

Developments within the industry

4.5.4 Continued periodic on site and class room training and professional support provided by DPSAO as DP sector grows and changes as a result of technological advances, assurance developments, incidents, etc.

4.6 Continued Technical & Advisory Support

4.6.1 DPSAO(s) will continue to assist USCG in a professional advisory role, analyzing existing testing programs and procedures, as well as desktop and on site FMEA analyses.

4.6.2 DPSAO(s) to provide technical and procedural expertise on site or via phone/email while teams are on site conducting trials.

4.6.3 DPSAO(s) to provide review of Annual Trials Report and findings and, where necessary, critical analysis of same.

4.6.4 DPSAO(s) to assist on an as needed basis, providing write up of Annual Trials procedures based on USCG and industry requirements, on a vessel by vessel basis, for use by USCG and/or USCG/DPSAO inspection teams.

4.6.5 DPSAO(s) to provide personnel for periodic observation (if/as deemed necessary by USCG) of USCG and/or other DPSAO DP inspections/procedures to facilitate the regular, periodic, and objective gap analyses of the following:

USCG regulations vs. international regulations and industry standards

USCG/DPSAO testing procedures vs. industry standards and independent third party procedures

USCG/DPSAO surveyor training/expertise vs. industry standards, requirements, perception, needs, etc.


APPENDIX A Original Notes Presented in Response to NPRM


To Whom It May Concern:

I would like to present the attached comments for review and consideration at this time by all concerned parties. Please feel free to contact me directly if clarification is required.

The comments attached were initially presented on LinkedIn as part of a group discussion (https://www.linkedin.com/groups/USCG-NPRM-regarding-DP-regulation-2015932.S.5949695652979032066). Since initially presenting comments in that forum, I have revised the comments following further review of the NPRM and discussion with other industry professionals and after involvement in some industry discussion groups.

In the interest of full disclosure, I am an independent third party consultant providing marine and DP assurance to the marine industry. As such, my comments come primarily from that point of view, but also from the perspective of a licensed chief engineer with 16 years of DP experience on both the sailing and shore-based sides of the industry.

By far, my own biggest concern is the DPSAO provision in the NPRM. The need for DP assurance services has grown and the field itself has evolved significantly since the early 90’s. This has been by necessity and market demand resulting from a lack of uniformly accepted standardization, a tremendous increase in the application of DP technologies, increasing complexity of systems and operations, and a maturing (albeit slowly) realization of the risks and consequences involved in offshore projects and operations. Class societies (for the most part) have maintained a hands-off approach to DP assurance in favor of their more traditional roles in the maritime industry, leaving the DP assurance to specialized organizations in the form of independent third parties.

This NPRM, in effect, eliminates the role of truly independent third party assurance providers and opens the door for Class Societies to take on a role for which they are not prepared. The result for the industry will be a cheap alternative to independent third parties, not only in cost but in quality of product. As a result – and contrary to its obvious intent – application of this NPRM as it is currently written may result in an increased risk to operations and overall safety.

DPSAOs (§61.50):

Presenting a Class Society as an automatic “DPSAO” makes many assumptions about the expertise of an organization and its employees. A DP trials program run by a Class Society is vastly different to a program run by an independent third party (or by the commercial arm of that same Class Society, if applicable). Class surveyors are not necessarily qualified to be DP surveyors. A distinction needs to be made here as well as consideration of individual surveyor’s qualifications as a DP surveyor rather than assume their qualifications based on whether or not their affiliated organization receives a stamp as a DPSAO.

There is a lot of unnecessary ambiguity created in general in the definition of a DPSAO and its duties and responsibilities. DPSAOs appear to be given the responsibility of Class in many areas including plan approval, etc. Some distinction and separation needs to be considered between Class and independent third party organizations.

Further to the above, there is a heavy reliance on DPSAOs for incident investigation and reporting. As an independent third party I certainly appreciate an amount of more or less guaranteed work made available by this proposed requirement. However, my concern is that this will make third parties part of a de facto enforcement arm of the USCG. This creates an issue (in my perspective) by taking the “independence” out of being an independent third party. Assurance providers offer their services free of conflicts of interest such as having physical assets, equipment, or operational software in the field. Likewise, we strive to have

https://www.linkedin.com/groups/USCG-NPRM-regarding-DP-regulation-2015932.S.5949695652979032066

https://www.linkedin.com/groups/USCG-NPRM-regarding-DP-regulation-2015932.S.5949695652979032066


no direct ties to Class or regulatory agencies. Our core service is to provide objective review and analysis based on a recommended practice over and above class or regulatory requirements. This may seem minor point but it serves as a clear distinction that a level of guarantee against conflicts of interest. By putting reporting responsibilities for owner/operators on the shoulders of third parties that separation is clouded.

How are DPSAOs determined for each specific vessel and/or company? Is it determined at the point of contracting a company to perform annual DP trials, suitability survey, OVID/CMID, etc.? Put another way, does a contract to perform a DP related service mean that that service provider then becomes the official DPSAO for incident reports, etc.?

With regard to above, what liability do DPSAOs take on with assumption of the incident reporting authority/responsibility?

Further, if the number of reports submitted fall below the anticipated number because of what is reported to DPSAOs, what is the consequence and who bears responsibility for the shortage?

Definitions and specific guidance (§62.10, et al):

As a general observation, more specific definitions are required. As has happened in the past, attempting to cover an entire industry with a set of rules inevitably creates many grey areas. This can lead to conflicts and may do more harm than good. Additionally, it provides areas of loose interpretation that follow the letter of the law but not the intent.

Most significantly, what are the critical OCS activities?

Do critical OCS activities include windfarm activities and other non-oil related projects? The definition seems to restrict these to “mineral” related projects.

As above, more definition is needed with regard to MTS guidance. In my experience, MTS guidance can change quickly and the guidance is updated and revised frequently. Laying out some defined criteria for critical operations or perhaps even referencing a specific (i.e., dated) MTS document may assist.

More clear guidance on simultaneous operations. If a MODU is undertaking “critical operations” will any vessel that then enters the 500m Zone be considered to likewise be undertaking a critical operation regardless of its assigned task?

DPVAD (p. 70953, etc.):

DP verification document and special class notation for DP vessels – What are the specific details surrounding these requirements? Are these US specific documents/classifications on top of existing international standards?

Provide guidance and/or a specific format for required survey certificates, reports, etc. so that deliverables are consistent (DPVAD, annual incident reports, etc.).

Term “Reliability” (pp. 70946, 70949, etc.):

The use of the term “reliable” is simply wrong in reference to DP class. The DP class of the vessel is meant to be a direct reference to its level of redundancy and has little to do with reliability. Reliability comes primarily from the diligence in operating and maintaining the asset and adherence to recommended practices and the vessel's design.

In the same vein, the redundancy of the vessel is directly related to operating the vessel in accordance with its WCDFI, regardless of class or whether the asset was designed to operate with an or open or closed bus.

Risk definition (pp. 70946, 70947, etc.):


Definition of “risk” is questionable and considers only consequences rather than both consequences and likelihood.

There are strong assumptions throughout that the class and size of the vessel dictates its level of risk. I see certain benefits of this approach, in particular with using it for the purposes of applying the requirements gradually across the industry. However, in keeping with earlier bullet points, recommended practices are applicable any time a vessel is operating in DP mode regardless of other factors. If a risk assessment is conducted to determine an asset’s level of redundancy for a given operation, it should only apply for open water operations that do not include manned diving operations or operating in the vicinity of any other vessel or unit. To apply differing levels of risk to Class 2 vs. 3 or 500 ton vs. 1600 ton (tonnage determination is not straightforward, either) vessels and include operations invites varied interpretations, perceived loopholes, and above all, confusion. To put it simply, I think that criticality considerations should start with the specific operation being undertaken rather than on size of vessel. While critical operations are defined in referenced documentation the NPRM as it stands creates ambiguity as it is presented.

DP incident investigations (pp. 70957, 70966, 70977, §61.50-4, etc.)

Incident investigation/reporting responsibility should be shared between owner/operators, charterers, and equipment vendors and manufacturers. There are many risks in operation (human error – symptomatic and problematic, software failure, hardware failure, procedural failure, manufacturing flaw, etc.). Commercial interests generally trump learning opportunities for the industry. Requiring each concerned party to play a part in incident investigation and reporting will ensure transparency and provide assurances that important lessons are learned and potential failures of any variety are prevented.

DP System Software (§61.50-5 (b)):

DP system manufacturers and software providers (e.g. Kongsberg, L3, GE, etc.) should carry the responsibility to provide adequate information to DPSAOs demonstrating due diligence in developing and testing software. DPSAOs (regardless of definition) are not capable of approving software packages, updates, etc. due to lack of specific knowledge of proprietary details and information.

Some of the costs outlined in the NPRM are inaccurate. References indicate that numbers are derived from transportation industry sectors that do not apply (e.g., Bureau of Labor Statistics, transportation surveyor). A $600 Annual DP Trial Program may be accurate for a Class DP survey (see DPSAO discussion points, above) if performed as part of an Annual Class Survey but is grossly inaccurate for the level of complexity required of IMCA and MTS industry standards for Annual DP Trials.

DPO/DPOQ (p. 70986, §140.310, §140.315, etc.)

Credentialing is not in line with current international guidance from NI and DNV GL and appears to fall more in favor of OSVDPA.

There are several references to DPOs and DPOQs being required to understand the FMEA, vessel specific documentation, etc. There is no clear definition of how this is gauged or how it is to be demonstrated. Familiarization documents are noted/mentioned and could be linked to existing ISM/SMS programs for verification and tracking purposes.


While IMCA standards are noted in the background material (pp. 70944 – 70985), some of the referenced IMCA standards are omitted from the actual proposed rules (pp. 70985 – 70994). Specifically, IMCA M117 is not directly reference in the proposed rules, only in the preamble.

DP system requirements for critical activities (p. 70950):

A recent joint Safety Alert from BSEE and the USCG (http://www.bsee.gov/uploadedFiles/BSEE/Regulations/Safety_Alerts/FINAL%20USCG-BSEE%20Joint%20DP%20Safety%20Alert.pdf) highlights a potential gap in the proposed rules. It has been confirmed by the USCG that the subject vessel was not a CLASSED DP vessel, counter to what the report states. Rather the vessel carried a single DP system but did not carry an official DP 1 notation from a Class Society. This incident will be held up as an example of why the USCG wants to restrict defined critical operations on the OCS to DP Class 2 or 3 vessels. I agree with this to a great extent but it has to be acknowledged that on the other side of this particular incident, it can be stated that this unclassed vessel does not fall under the proposed rules and is therefore a valid vessel to be chosen for the project – following the letter of the law, but not the intent. The diagram on p.70950 of the NPRM illustrates this. "Using a DP system to conduct OCS activities on US OCS?" The answer can be "No" because the system is not classed as a DP system. Thus, following the chart, there are "No Requirements." While this incident highlights the fact that responsibility falls to the charterers and owner/operators to honestly vet their vessels and ensure that they are appropriate for a given task, it also demonstrates that while the USCG is attempting to mitigate risk by these proposed rules, the potential exists that they may create a situation they were not intending by overlooking the unclassed DP vessels.

Again, these are primarily my thoughts (based on an independent third party perspective) on what is contained in the NPRM and what I have gleaned from conversations with other industry professionals. I will continue to review the document and discuss with concerned parties and may provide additional comments.

Please feel free to revert directly regarding any comments or clarifications any of you may have. I can be reached via email at [email protected], or phone at (920) 915-7151.

Thank you.



Docket No. USCG–2014–0063 - Considerations for Further Development

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