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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
