Limits On Overhaul
Competition
Reflecting the diminishing over-
haul business and the FY 1985 Ap-
propriation conferees instructions,
Navy has dramatically increased the
percentage of overhauls earmarked
for coastwide competition. Eight of
ten East Coast regular overhauls
and all five West Coast overhauls
will be bid coastwide in FY 1986.
These data are shown in Exhibit 2
and compared to earlier years.
Type Contracts
To Be Awarded
Exhibit 3 shows the shift toward
fixed price contracts for future
Navy awards. With the exception of
a nuclear carrier overhaul, all regu-
lar overhauls in FY 1986 will be
fixed price or fixed price incentive
awards (the type contract for the
carrier overhaul has not yet been
decided). Almost all SRA's will be
fixed price contracts. Phased main-
tenance availability contracts will,
however, continue to be cost plus
award fee awards.
Type Procurement Planned
Eight out of 15 regular overhauls
in FY 1986 will be contracted using
invitation for bids (IFB's). RFP-IP
procurement will be used for 43 of
69 SRA contracts next year. All but
one FY 1986 PMA contract will
involve source selection procure-
ment. These data are shown in Ex-
hibit 4 and compared to earlier
years.
Overhaul Contracting
By Ship Type
As shown in Exhibit 5, support
ships represent six of the 15 over-
hauls scheduled for FY 1986. All are
coastwide bids with a fixed price
contract to be awarded. Five of the
six involve IFB procurement proce-
dures.
Four cruiser/destroyer contracts
are scheduled for next year. All are
to be bid coastwide and fixed price
incentive contracts are to be
awarded. RFP-2P procedures are to
be used in three out of four procure-
ments.
All three amphibious ship over-
hauls scheduled in FY 1986 are to be
competed coastwide and fixed price
contracts are planned. Two of the
three will involve IFB procure-
ment.
No frigate or submarine overhauls
are scheduled for commercial yards
next year.
RECENT DEVELOPMENTS
Among the recent developments
are action on the defense authoriza-
tion bill, changes in homeport poli-
cy, issues raised about the Kitty
Hawk modernization, and a pro-
posed restriction on Navy ship re-
pair in Japanese shipyards.
Authorization Bills
Both House and Senate have
passed a FY 1986 defense authoriza-
tion bill. The Senate version pro-
vides defense spending authority of
$302.5 billion in FY 1986. The
Circle 313 on Reader Service Card
House version holds spending au-
thority to $292.5 billion. House/
Senate conferees will meet this
month to reconcile the two bills.
Neither bill dramatically impacts
the Navy ship maintenance pro-
gram. The Administration re-
quested $25.8 billion for Navy oper-
ation and maintenance programs in
FY 1986, of which $6.1 billion is for
ship maintenance and moderniza-
tion. The House bill authorizes
$25.1 and the Senate authorizes
$25.5 billion. The only direct impact
is a provision in the House bill
which authorizes an additional $20
million for depot maintenance to
reduce ship maintenance backlog.
The legislative process is far from
complete. An appropriations meas-
ure must be passed and sent to the
President for signature. Ship main-
tenance tends to be of more interest
to the appropriators than the autho-
rizes.
Homeport Policy
OPNAV Note 4700 issued in late
May specifies that all scheduled
(continued on page 26)
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