Navy Overhaul Market
Exhibit 1
Number of Contracts
Fiscal Year
1984 1985 1986
East Coast
Number of Overhauls
Regular overhauls 18 20 10
Reserve ship overhauls 3 1 3
Number of Selected Restricted Availabilities (SRA)
Drydocking involved 3 6 12
No drydocking 27 26 33
Number of Phased Maintenance Availabilities (PMA)
Drydocking involved - 3 9
No drydocking - 3 8
West Coast
Number of Overhauls
Regular overhauls 9 11 5
Reserve ship overhauls - 4 3
Number of Selected Restricted Availabilities (SRA)
Drydocking involved 8 13 6
No drydocking 20 25 18
Number of Phased Maintenance Availabilities (PMA)
Drydocking involved - - 2
No drydocking — 6 9
Exhibit 2
Limits On Overhaul Competition
(regular overhauls only)
Fiscal Year
1984 1985 1986
East Coast
Number of overhauls 18 20 10
Coastwide competed
Number 11 12 8
Percentage of total 61 60 80
Homeport restricted*
Number 7 8 2
Percentage of total 39 40 20
West Coast
Number of overhauls 9 11 5
Coastwide competed
Number 4 6 5
Percentage of total 45 55 100
o Homeport restricted
Number 5 5 -
Percentage of total 55 45 -
Notes: 1. FY 1985 includes two Charleston based submarines earmarked for Newport
News.
2. Includes 3 ESA's.
Exhibit 3
Distribution Of Work By Type Contract Award
(number of awards)
Fiscal Year
East Coast
Regular Overhauls:
Fixed price/fixed price incentive awards
CPAF awards
Other
Reserve Ship Overhauls:
Fixed price awards
Phased Maintenance Availabilities (PMA):
CPAF awards
Selected Restricted Availabilities (SRA):
Fixed price awards
CPAF awards
Other
West Coast
Regular Overhauls:
Fixed price/fixed price incentive awards
Other
Reserve Ship Overhauls:
Fixed price awards
Phased Maintenance Availabilities (PMA):
Fixed price awards
CPAF awards
Selected Restricted Availabilities (SRA):
Fixed price awards
CPAF awards
Other
1984
10
8
22
8
11
3
14
1985
14
3
3
1
6
30 1
1
1
5
19
19
1986
9
1
3
17
44
1
11
22
2
(continued)
availabilities (overhauls, SRA's and
PMA's) exceeding six months dura-
tion are to be competed coastwide.
Under prior policy all SRA's and
PMA's were restricted to homeport
area competition.
Ten FFG 7 frigates (maybe only
eight) scheduled to be retrofitted
with the LAMPS III helicopter
landing system (RAST) are affected
by this instruction. This retrofit
work was planned to be performed
during an SRA since FFG 7 class
frigates are not scheduled for over-
haul during their service life. These
special SRA's will take ten-twelve
months to complete and under pre-
vious policy the work would be
reserved for local homeport ship-
yards. The new policy opens this
work to coastwide bidding.
Eight of these frigates are home-
ported on the East Coast. Two are
homeported on the West Coast. The
first retrofit is scheduled for the
Mclnerney (FFG8) in February
1986.
Norfolk Homeport Extended
To Include Baltimore
Another development was a mem-
orandum from the Secretary of
Navy instructing the CNO to in-
clude Baltimore in the Norfolk area
homeport radius. As background
the memo cited the increasing per-
centage of SRA's and described how
this development has hurt ship-
yards outside the Norfolk homeport
area.
The instruction specifies that be-
ginning 8 May 1985, Baltimore area
shipyards are eligible to bid on jobs
reserved for the Norfolk homeport
area. This policy, however, applies
only to fixed price solicitations and
requires a relocation cost differen-
tial to be added to the Baltimore
bid(s). Because only fixed price
awards are included, Baltimore
yards will be unable to bid for
phased maintenance contracts (they
are cost plus contracts). This elimi-
nates many amphibious and sup-
port ships from the available mar-
ket.
Depth limitations in Baltimore
further restricts the impact of this
policy change. The channel depth at
the Bethlehem-Sparrows Point
shipyard is 26-27 feet, ruling out
major combatant ships. As a result
it is unclear whether the new policy
will open much Navy SRA business
to Baltimore shipyards.
No plans to widen other home-
port areas are being considered by
Navy—at present. But this develop-
ment opens the door for shipyards
in other non-homeport areas to
push the same initiative.
Kitty Hawk Service Life
Extension (SLEP)
Both House and Senate Armed
Services Committees have re-
quested Navy to provide further in-
formation on the cost effectiveness
of performing the Kitty Hawk mod-
ernization at the Philadelphia Na-
val Yard. Underlying the requests is
an attempt to assign Kitty Hawk to
the Puget Sound Naval Shipyard,
rather than the Philadelphia Naval
Shipyard. Language in the House
version leaves open the possibility
of sending the ship to a commercial
yard on the West Coast.
The House referred to a Navy
internal study and requested an
analysis of the cost effectiveness of
alternative approaches:
A Navy paper, known as the
"AIRPAC Study," suggested that
dollar savings and increased oper-
ational availability may be
achieved by accomplishing the ex-
tension of the service life through
a complex overhaul (COH) and a
series of short shipyard periods
(that could be performed in West
Coast shipyards) rather than dur-
ing a single long shipyard period
(that would be performed in Phil-
adelphia, the site of previous
SLEP's). The study also sug-
gested that a single long shipyard
period SLEP would involve un-
necessary or duplicative work be-
cause West Coast based carriers
have different (higher) mainte-
nance standards.
The Commander of the Naval Sea
Systems Command (NAVSEA)
has studied the matter. The
NAVSEA study concluded that a
single long shipyard period was
preferred because it could include
necessary major main engine re-
pairs and structural repairs that
would have to be deferred under
the alternative approach. The
NAVSEA study also concluded
that cost, workload, and facilities
considerations favored the assign-
ment of U.S.S. Kitty Hawk to
Philadelphia for a single long
shipyard period. Accordingly, the
.Commander of the Naval Sea
Systems Command recommended
to the Chief of Naval Operations
and the Secretary of the Navy
that U.S.S. Kitty Hawk be as-
signed to the Philadelphia Naval
Shipyard for extension of service
life in a single shipyard period.
The committee directs the Secre-
tary of the Navy to assess the cost
effectiveness of alternate ap-
proaches to extension of service
life of U.S.S. Kitty Hawk and to
submit a report to the Commit-
tees on Armed Services of the
Senate and House of Representa-
tives describing the results and
conclusions of that assessment.
The report should include the fol-
lowing: a description of the work
planned to be accomplished dur-
ing the SLEP; an assessment of
the costs and benefits (to include
operational availability) of ac-
complishing the planned work in
a Service Life Extension Program
as compared to accomplishing the
same work in a complex overhaul;
and a comparison of the work
planned to be accomplished dur-
ing the SLEP with the work iden-
tified as being required in the
"AIRPAC Study."
The Senate Armed Services Com-
mittee requested that Navy certify
the cost effectiveness of its plan and
26 Maritime Reporter/Engineering News
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