THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, May 4, 1996 TAG: 9605040369
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 74 lines
A rider attached this week to the 1997 Defense Authorization bill by the House National Security Committee would reshape the ship repair business in Hampton Roads.
The bill would give all Navy ship repair contracts of more than $750,000 to the region's shipyards, freezing out dozens of smaller ship repair firms known as ``down-river'' contractors.
The rider was proposed by Rep. Owen Pickett, the Democrat who represents Virginia Beach and Norfolk, a district that has many of the shipyards that would benefit from the bill.
Pickett said in a news release Friday that the bill would restore Navy policies that have been strayed from in recent years, allowing ``less capable yards to bid on more complex work.''
Navy officials declined to comment on the rider, but one said, on the condition of anonymity, that Pickett's provision isn't in the Navy's best interest because it restricts competition.
The bill must be approved by the full House of Representatives and the provision would have to be introduced into the Senate's version.
``The Navy has for years encouraged private shipyards to make capital investments in drydocking and related facilities to assure the availability of a sufficient number of shipyards capable of performing complex ship repairs for the Navy,'' Pickett said in the release.
Those yards that met the Navy's criteria were given a Master Ship Repair Agreement and did more complex work. They include Norshipco, Metro Machine Corp., Colonna's Shipyard Inc., Moon Engineering Co. Inc., Marine Hydraulics International Inc. and, of course, Newport News Shipbuilding.
Smaller ship repair companies that did not meet the criteria for the Master designation did minor repairs. Nearly 30 small ship repair firms in Hampton Roads have the Boat Repair designation.
``This is an attempt to legislate us and other small ship repairers out of business,'' said John Brandon, chairman of Dreadnought Marine Inc., one of the largest Boat Repair-designated firms in Hampton Roads.
Dreadnought employs about 400 workers and recently won a $3.1 million contract for repairs on the guided-missile cruiser Normandy.
Under Pickett's provision, Dreadnought wouldn't have been allowed to bid on cruiser contracts.
``There's been opposition to us doing larger jobs all along,'' Brandon said.
``I don't understand the rationale behind $750,000,'' said Frank Wagner, owner of Davis Boat Works Inc. and a state delegate. ``That's an arbitrary figure picked out of the air.''
Pickett was unavailable Friday to explain the $750,000 threshold.
Executives at shipyards with the Master designation argue that they've made the investment necessary to perform repairs for the Navy in the best possible manner and that that investment needs to be insulated as it was in the past by Navy policy.
``There's a very fragile industrial base out there that is trying to survive,'' said John L. ``Jack'' Roper IV, executive vice president of Norshipco, which has announced it may lay off 500 of its 2,600 workers because it doesn't have enough work.
There's plenty of competition between just the Master shipyards to keep costs down, Roper said. Bidding has been cutthroat in the market as the Navy fleet has shrunk and work has dried up, he said.
``It might give me a fighting chance to win a bid because I will be bidding against my peers that have made big capital investments in waterfront facilities,'' Roper said of Pickett's rider.
``All this bill does is formalize what has been the Navy's procedure traditionally,'' said Doug Forrest, vice president of Colonna's Shipyard Inc.
A congressman from San Diego amended the rider so that it would not apply to the West Coast. by CNB