THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 16, 1995 TAG: 9510140213
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Opinion
SOURCE: Ted Evanoff
LENGTH: Medium: 82 lines
Jack Gibson saw the remarkable happen. A veteran in the sea of companies experienced in Navy work, he saw the fleet surpass 500 ships in the '80s, only to dwindle in the '90s toward the final mark of 350 vessels.
The scaledown was abrupt and rapid, a wholesale and historic cutback that tends to define a new chapter in the life of old hands like Gibson, executive vice president of Information Technology Solutions Inc., a defense contractor based in Hampton with 740 employees nationwide.
What has Gibson's attention these days isn't the Navy's dramatic downsizing. No, he's struck by something far less visible than the gray ships docked along the Elizabeth River. He's watching how the ships that remain in the fleet are serviced.
The Navy has entertained a revolution. So has every branch of the armed forces. Washington has been overhauling the way the government buys hardware and services.
Generally known as defense acquisition reform, the overhaul is still in the making and has made for few headlines compared to the impact of the base closing commission, but it has had a keen influence on the Tidewater economy.
``The rules are changing,'' Gibson said. ``There'll wind up being winners and losers.''
When all was said and done, the base closing commission spared Hampton Roads. The relief was tangible this summer once it was clear the Norfolk Naval Station would be home port for almost half of what remained of the fleet, and the Norfolk Naval Shipyard would remain in commission, and Oceana Naval Air Station would gain more warplanes.
With the fleet secure, Hampton Roads reached an economic stability not before seen in the '90s. The region set employment records throughout the summer, including August's report of 635,000 civilian jobs filled on the Peninsula and the southside.
Some even traced the summer sales gain in the South Hampton Roads housing market to a newfound optimism. Tidewater would remain a military stronghold.
While we have may stability, we don't have certainty, especially for the huge enterprise in Tidewater that services the ships and bases.
Under the banner of acquisition reform, the U.S. government has consolidated, laid off, automated. It shed real estate and bodies not only to bring the office force in line with downsized ship and troop levels, but also to win new efficiencies in the offices.
This shake up may be evident in the Hampton Roads Economic Performance Index, a barometer administered by economist David Garraty of Virginia Wesleyan College in Virginia Beach.
Garraty insists the core economy of Hampton Roads isn't doing as well as the record employment level suggests. Many new jobs pay low wages, or are temporary work. If the economy raced along, he said, we might see far more than 635,000 jobs. Says Garraty: ``We're just getting back to the place where we were'' in the late '80s before the local economy tanked.
Chances are, the Performance Index may groan along for years. Droves of government acquisition agencies in Tidewater interact with hundreds of private service contractors. These agencies and companies together form the core of the economy, especially on the southside, employing tens of thousands of technicians, engineers, administrators, skilled workers and laborers.
Acquisition reform, though, is simply beginning. In June, the U.S. House passed a $267 billion defense appropriation bill for '96. One provision in the bill requires the secretary of defense to reduce the acquisition workforce by 25 percent in four years.
If the provision becomes law, it would cut 75,000 positions nationwide from a military acquisition work force estimated to number about 300,000 people, said Phil Peters, press secretary for the House National Security Committee. The entire bill is under review by a House-Senate committee trying to pare the total '96 defense appropriation down to $264.7 billion.
``You're going to have a net loss in jobs,'' said Michelle Currier, president of the National Contract Management Association's Norfolk chapter. ``But what's going to happen is, if they privatize a lot of government services like they say they are, you're going to see the government bring in private companies to do the work.
``Then you'll see more consultants being hired for specific jobs, It's already happening,'' said Currier, employed as head of contracts in Norfolk for the Military Sealift Command. ``Some people laid off from government will be picked up in the private sector. Others will have to be retrained.'' by CNB