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MSC for ship maintenance has been cut from $270 million to $203 mil- lion. Only 22 overhauls are now planned this year. This is much low- er than the 42 overhauls approved in the FY 1986 budget. MSC has estimated that FY 1987 expenditures for ship maintenance and alterations will be $207 million. This will fund-37 MSC ship over- hauls. The FY 1987 estimate is about the same as the current spending estimate for this year. at prices higher than government cost estimates Exhibit 3 summarizes the cost growth found by GAO in each SUP- SHIP office. As shown, cost in- creases have been particularly great in contracts administered by the San Diego SUPSHIP office. (continued) Exhibit 2—Navy Reserve Fleet Maintenance and Alteration Expenditures FY 1985 FY 1986 FY 1987 (current est.) (proposed) Ship maintenance expenditures (millions) $122.0 $173.8 $153.5 No. of Job Starts Ship overhauls 3 9 4 Selected Restricted Availabilities ) j 12 17 } 10 Phased Maintenance i 4 Source: Department of the Navy Public/Private Overhaul Competition The Navy has earmarked eight ship overhauls for competition be- tween naval and commercial ship- yards in FY 1986: East Coast Spear (AS-36) Mahan (DDG-42) Benjamin Franklin (SSBN-640) George Bancroft (SSBN-643) West Coast Albert David (FF-1050) O'Callahan (FF-1051) Fletcher (DD-992) Fort Fisher (LSD-40) Until selected for the public/pri- vate competition, the FF-1050 and -1051 had been scheduled for Long Beach Naval Shipyard. The DDG- 42 had been assigned to the Charleston Naval Shipyard. New- port News and Charleston Naval Shipyard had originally been as- signed one of the two SSBN over- hauls. Each of the other three sur- face ships had been scheduled for commercial bid. Probably the most critical competition involves the two frigates. Workload will be very low at Long Beach if these jobs are awarded to commercial yards. Gramm-Rudman funding cuts may impact the surface ships ear- marked for this compeition. They are among the few overhauls sched- uled for FY 1986 not yet begun or awarded. These job starts may be the only candidates for deferral. Ship Overhaul Buying-In In January, the GAO released a study (NSIAD-86-27) of contract cost growth in Navy ship overhauls. The analysis was based on 105 regu- lar ship overhauls completed be- tween October 1982-May 1985. For each overhaul GAO compared contract award amounts, govern- ment estimates and final prices. GAO found that: • In the 75 fixed price contracts final cost exceeded award price by 63 percent • In the 30 cost reimbursement contracts final cost exceeded award price by 35 percent. • 71 of the 75 fixed price con- tracts were awarded at prices below government estimates • 24 of the 30 cost reimbursement contracts were awarded at prices under government estimate • Modifications negotitated un- der fixed price contracts were made July 15, 1986 9 MARINE ELECTRIC SUPPLYING RELIABLE MILITARY ELECTRONIC SYSTEMS DESIGNED TO MEET THE MOST EXACTING MILITARY SPECIFICATIONS FOR OVER 40 YEARS! GALBRAITH-PILOT MARINE AND CML MACARR DIVISIONS MARINE ELECTRIC RPD, INC. 666 PACIFIC STREET, BROOKLYN, NEW YORK 11217 U.S.A. TELEX: 125327. Tel: (718) 857-2400 Circle 135 on Reader Service Card Temperature Monitoring Mil-T-15377 Salinity Monitoring & Alarm Systems Mil S 15103K —not shown — Motor Generator Sets Mil-M-19633 Battery Charger Portable- Multipurpose Mil-C-24095 (Naval Shipboard) Ground Support 28V DC Power Supplies Mil-P-15736 Loudspeaker Systems Mil-A-21577 TRE Signal Conditioners Mil-T-24387 We also manufacture equipment and systems to MIL quality, not otherwise covered by MIL-Specs, such as Whistle Timers, Control Systems, Wide Band Power Amplifiers, Battery Service and Analysis and Mobile Power Supplies for Aircraft Starting.
