Page 24: of Maritime Reporter Magazine (March 1986)

NAVY (continued) ($10.1 billion); naval military con- struction, $1.8 billion ($1.7 billion); and Navy and Marine Corps family housing, $784.3 million ($665.1 mil- lion).

The important O&M account in- cludes—in addition to the $1.1 bil- lion and $5.3 billion allocated, re- spectively, to the ship maintenance and modernization of the Navy's strategic forces and general purpose forces—an additional $631.3 million for "airlift and sealift" and $6.9 bil- lion for "central supply and mainte- nance." Included in the latter ac- count is $2.2 billion for "ship and weapon system maintenance and engineering," and various other large sums for other maintenance programs, some of them undoubted- ly requiring at least the partial sup- port of the shipbuilding industrial bflSG

Two O&M footnotes: (1) The Ad- ministration requested—in the nu- merous "whereases," codicils, and special provisions that often provide the most interesting reading in the

DOD authorization and appropria-

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INDUSTRIES INC Telex 26-5433 Circle 237 on Reader Sen/ice Card tions bills—that $3.4 billion of the

O&M total be made available "for the performance of such work in

Navy shipyards"; Congress pro- vided $3.65 billion for the work allo- cated to Navy shipyards in the FY 1986 Defense Appropriations Act. (2) The Administration is seeking elimination of a Congressionally mandated provision that requires that "a test program" be initiated to determine the "direct and indirect costs" of the overhaul and mainte- nance work conducted by Navy shipyards as compared to the same work done by private-sector ship- yards; the latter have been saying, usually through the Shipbuilders

Council of America, that the repair and maintenance of the Navy's ships can be done both more cheap- ly and more effectively by private yards.

There also are several special pro- visions included in the shipbuilding appropriations account of particular interest to the shipbuilding commu- nity as well as certain other factors germane to an understanding of the current and projected program.

Among those special provisions of law and "other factors": (a) The

Navy wants to take more time to make up its mind on contract awards, and has for that reason asked that the money appropriated in FY 1987 "remain available for obligation until September 30, 1993." Congress set a cut-off date of

September 30,1990 for obligation of funds appropriated for FY 1986; the

Navy is in effect, therefore, asking that its decision time be increased from five to seven years, (b) The proposed Appropriations Act in- cludes language stipulating that "none of the funds herein provided ... shall be expended in foreign shipyards for the construction of major components of the hull or superstructure" of the ships funded by the Act, and that "none of the funds provided ... shall be used for the construction of any naval vessel in foreign shipyards." The spectre of G-R-H has combined with nu- merous DOD management initia- tives—multi-year contracting, in- creased use of competition at all contract levels, and "second sourc- ing" (the distribution of prime con- tracts to more than one supplier)— to expand the defense industrial base and create business opportuni- ties for numerous companies never previously considered for DOD work. The escalating pressure to cut costs, without sacrificing quality, means that prime contractors are now shaving their own contract bids to the bone, and are in turn seeking lower prices from their own sup- pliers and subcontractors and/or turning to other sources to satisfy their requirements.

Within that context, the following is a breakdown, not necessarily in order of importance, of the new- construction ships and conversions requested and/or projected for funding in the Navy's FY 1987 and

FY 1988 programs. Ship descrip- 26 Maritime Reporter/Engineering News