THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, May 3, 1996 TAG: 9605030551
SECTION: FRONT PAGE: A10 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 60 lines
The Senate Armed Services Committee voted Thursday to change the way the Navy distributes work between public and private shipyards.
A day earlier the House National Security Committee rejected a proposal that would have allowed the Defense Department to give more of its maintenance work to private contractors instead of its depots, including the Norfolk Naval Shipyard.
Both chambers will likely address the issue again, and any difference will have to be ironed out in a conference committee.
The shipyard in Portsmouth employs about 6,850 workers.
The Senate voted to allow the Pentagon to split its maintenance work evenly between government depots and private contractors.
Currently the Defense Department is required to send at least 60 percent of its maintenance work to government-owned depots, under a law known as the ``60/40 rule.''
The Defense Department had asked Congress to repeal the rule, arguing that it could save money by allowing private companies to do more of its maintenance work.
There was an effort on the Senate panel to do away with the formula altogether.
With both public and private shipyards in the state, Sen. John W. Warner, R-Va., said he thought it best to give them an equal shot.
The House defense panel voted 34-13 on Wednesday to reject a similar proposal.
The Pentagon just didn't prove its case, said Rep. Norman Sisisky, whose district wraps around the Norfolk Naval Shipyard.
``The Pentagon brags that they saved 31 percent from privatization last year, but the reason they saved so much is the competition between the public and private sectors,'' Sisisky said.
``You just can't keep taking things away from the depots,'' he added. ``The overhead will kill you.''
The proposal to repeal the ``60/40 rule'' will likely resurface when the defense authorization bill is considered by the full House of Representatives in a few weeks.
Whatever happens, the matter will have to be settled in the conference committee that will iron out the differences between the House and Senate versions of the bill.
Sisisky said the Navy had assured him that repealing the rule would not have affected the Norfolk Naval Shipyard too much.
The Navy has already taken a lot of work away from it, giving carrier overhauls to Newport News Shipbuilding and sub overhauls to the Portsmouth Naval Shipyard in Kittery, Maine, Sisisky said.
Six years ago the shipyard employed nearly 12,000 people. MEMO: Staff Writer Dale Eisman contributed to this report.
KEYWORDS: DEFENSE BUDGET by CNB