Page 40: of Marine News Magazine (November 2023)

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Feature

Shipyards

TOTE “It took some time to get [the

VCM process] right,” he added, “but the demand for success was important. All parties stayed in their lanes. This was make or break for industry.” – Ben Christian, VP for

Business Development and New

Construction, TOTE Services ed, “but the demand for success was important. All parties Christian and Bond both hope that NSMV’s success stayed in their lanes. This was make or break for industry.” will lead to more VCM style contracts, and more ships be-

Both men commented that MARAD was not a distant ing built to address U.S. maritime needs.

partner, it stayed engaged. “They were good at making sure we were doing what we said,” Bond said. But once a

MARAD’s Viewpoint decision was made, it was respected by all. They noted that

Laila Linares is MARAD’s NSMV Senior Program

MARAD’s project team was smaller than for past, similar Manager. She was asked about the VCM model and the government projects. Real world impact: fewer bosses for important milestone with the delivery of the Empire State.

TOTE Services and Philly Shipyard.

In response to emailed questions, she provided extensive

Bond commented that the VCM model “helped us build insights into the VCM model as well as her thoughts on vessels. That’s what we do best.” The VCM established an lessons applicable to future projects.

arms-length status among the parties, avoiding multiple

Linares said that the VCM model saved the govern- layers of reviews, reporting and related bureaucracy.

ment hundreds of millions of dollars and several years

As an example, Bond referenced the need to get design in construction time. One critical reason was MARAD’s work done quickly. “We didn’t want to redo any work,” extensive upfront work on vessel design, a focus that al- he commented. VCM allowed a faster process, one similar lowed TOTE Services and Philly Shipyard to quickly to private sector, commercial pacing, not traditional gov- move to production.

ernment timetables. “We wanted to minimize change,”

She explained that MARAD used a “? rm, ? xed-price”

Christian said, “and we spent the time up front getting the contract, typical, she said, for commercial markets, one design right.” that reduced risk of cost overruns and delays. Another

Another example: the VCM avoided double sea trials – move was development of a single shipyard Inde? nite De- one undertaken by the shipyard and then another ordered livery/Inde? nite Quantity (IDIQ) award, an approach that by the government, a duplication with signi? cant cost further protected the Government’s contractual interests. impacts, a duplication that could have happened “out of MARAD wants ? ve training vessels, but it doesn’t have habit,” Christian commented. He called the Empire State’s full funding available right now. The IDIQ capitalized on integrated sea trial “groundbreaking.” economies of scale not available with multiple shipyards.

40 | MN November 2023