THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, August 19, 1995 TAG: 9508190064
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 55 lines
Newport News Shipbuilding and a Norfolk firm will get slices of a Navy contract that could be worth more than $1 billion.
The giant Peninsula shipyard and Norfolk-based Atlantic Ordnance and Gyro Inc. are among about 10 companies designated to maintain and repair about 100 former Navy warships now used by foreign governments.
The work would help Newport News Shipbuilding in its drive to diversify and could mean up to 75 new jobs at Atlantic Ordnance, a combat systems support company, officials there said.
The foreign military sales contract was won by BAV, a joint venture of Alexandria-based VSE Corp. and McLean-based Booz Allen & Hamilton Inc. The contract is for $202 million in the first year, with nine optional years that would push the estimated value to over $1 billion.
Two Virginia Beach-based firms - American Systems Engineering Corp. and Raytheon Support Services - were among the seven losing bidders.
Newport News Shipbuilding is not the only shipyard among the winning subcontractors. The group also includes the large Ingalls Shipbuilding yard in Pascagoula, Miss., a West Coast yard, and a small shipyard in Charleston, S.C.
The coalition of companies led by BAV will provide engineering, technical, maintenance and logistics support services for U.S. warships bought, leased or transferred to foreign governments.
The warships include older destroyers, frigates and amphibious ships that would have been mothballed or scrapped.
Instead they were sold or leased to foreign governments. For example, Taiwan has six former Knox-class frigates that it began leasing in 1993 and 1994, and Egypt leased two Knox-class frigates in 1994.
Working with the BAV coalition should allow foreign users of former U.S. Navy ships to get faster service and take advantage of economies of scale, a Navy source said. But there's nothing to prohibit a foreign government from dealing with other contractors.
As part of the contract, Newport News Shipbuilding will have the first shot at reactivating any Oliver Hazard Perry-class guided-missile frigates that go to Turkey or a Persian Gulf state, a shipyard spokeswoman said. Such work would be a minute addition to the $5 billion backlog at the yard, which employs 19,300 people.
Atlantic Ordnance could have to add up to 75 employees to meet the needs of contract, said Edmund W. McNutt, the firm's president and owner. Atlantic Ordnance repairs and upgrades weapons systems aboard warships. It currently employs about 100 at its Norfolk headquarters and offices in San Diego and Charleston, S.C.
``It's a very nice contract,'' McNutt said. by CNB