Navy Budgets $25.7 Billion For Ship Maintenance, Modernization Over Next Three Fiscal Years

The Navy has budgeted $25.7 billion over the next three fiscal years for ship maintenance and modernization and for the purchase of mechanical systems, electronics and communications components and other equipment needed for replacement and modernization.

Another $1.5 billion has been budgeted over the same period by the Military Sealift Command and the Maritime Administration for the maintenance of their ships.

IMA has just completed an indepth assessment of future U.S.

Navy ship repair. The 150-page report published in April documents future work activity and analyzes issues impacting ship repair industry prospects. It includes details for specific job starts planned in FY 1991, 1992 and 1993—showing the type of availability planned and work start date. Market share is estimated for each of the shipyards performing Navy ship repair over the past six years. This article highlights some of the findings in the report.

Status of Current Industry Base U.S shipyards building and repairing Navy ships as of the beginning of this fiscal year are shown in Exhibit 1. There were 50 yards involved in Navy work. Five were strictly involved in construction, 38 in repair and conversion and the remaining seven performed both repair and construction.

The trend in the number of Navy vessel construction capable yards has fallen from 37 to 20 over the past nine years—a decrease of 46 percent.

In contrast, the number of yards with full repair capability has dropped from 49 to 44—a decrease of only 10 percent. There has been almost no decrease in the number of yards capable of performing limited repairs.

Exhibit 2 shows the major suppliers of hull machinery & electrical (HM&E) components. These manufacturers supply components for new construction, as well as repair and modernization of the current fleet.

Current Navy Maintenance Practices Four basic ship maintenance patterns are employed by the Navy for active and reserve fleet ships: regular overhaul cycle, engineered/ extended operating cycle, phased maintenance and progressive maintenance.

Regular Overhaul Cvcle—Traditional Navy maintenance practice had been to schedule periodic, lengthy ship overhauls during which repairs and planned alterations would be performed. A typical cycle was approximately 36 months between major overhauls. The overhaul took eight to 12 months.

The Navy has largely discontinued this maintenance practice.

Currently only floating drydocks and a few unique ships are maintained according a regular overhaul cycle.

Engineered Operating Cvcle— This strategy was introduced in 1974 for maintaining ballistic missile submarines. The objective was to match submarine overhaul intervals to a length compatible with new long-life reactor cores. The EOC concept was extended to surface ships in the late 1970s.

Under EOC maintenance, overhauls (ROHs) are scheduled at intervals as great as 15 years. Intermittent depot level availabilities (SRAs and DSRAs) are scheduled between overhauls, lasting two to four months duration.

Fourteen ship classes are now in an EOC maintenance plan. The maintenance cycle shown for a DD- 963 Class destroyer illustrates the EOC concept.

DD 963 Engineering Operating Cycle ROH l « . | SRA I—I DSRA l—l SRA l—l ROH I 0 18 20 38 41 59 61 80 85 Phased Maintenance—This maintenance strategy was first employed in the late 1970s. Initially it was used for the Atlantic Fleet combat stores ships and has subsequently been extended to additional classes.

The general idea of phased maintenance is to perform short, frequent phased maintenance availabilities (PMAs and DPMAs) in place of regular lengthy overhauls. Ships are generally scheduled for PMAs/ DPMAs of two to four months duration at 15 to 18-month intervals.

The work is generally accomplished under multi-ship, multiyear contracts where one contractor is responsible for a particular group of ships.

Twenty-one ship classes are now in a phased maintenance plan. The schedule shown for the LSD-41 Class landing ship dock amphibious assault ships illustrates the phased maintenance concept.

LSD 4 1 Phased Maintenance Cycle DPMAI—I PMAI I PMAI I DPMAI 0 14 17 32 35 50 54 Progressive maintenance—In the 1970s the Navy initiated a ship logistics concept designed for specific classes which had reduced manning.

The FFG-7 Perry Class frigates and PHM hydrofoil patrol boats were designed with progressive maintenance as an objective. Frequent maintainance and repair of these ship classes is scheduled at both intermediate and depot level activities.

Depot level maintenance actions are to be performed during selected restricted availabilities which may involve drydocking (DSRAs) or not involve drydocking (SRAs).

About 10 ship classes are now in a progressive maintenance program.

The maintenance cycle shown for the MHC Class minehunters illustrates this concept.

MHC Progressive Maintenance Cycle DSRA I I SRA I I DSRA I 0 18 20 38 41 MSC and RRF Maintenance Practices— The Military Sealift Command (MSC) basically follows commercial procedures in maintaining ships. Drydocking and overhauls are scheduled at two-year intervals and last 30 to 45 days. Intermediate servicing (midterm availabilities) lasting 15 to 20 days is scheduled between overhauls. Repairs, sponsor modifications, upgrades, etc. are performed during the overhauls and midterm availabilities.

The Maritime Administration (MarAd), which manages the Ready Reserve Force (RRF) fleet, schedules drydockings for RRF ships at two-year intervals to satisfy Coast Guard and ABS certification requirements.

At six-month intervals, minor preventive maintenance is performed aboard each ship by MarAd personnel.

Project Funding & Number of Availabilities The Navy has budgeted $13.5 billion over the next three years for ship maintenance and modernization: $4.1 billion in FY 1991, $4.7 billion in both FY 1992 and 1993.

Another $12.2 billion is budgeted over the next three years for pur- chasing mechanical systems, electronics and communications components and other equipment needed for replacement and modernization.

MSC has budgeted about $600 million for maintenance of its ships over the next three years. MarAd has budgeted about $400 million for maintenance of RRF ships. Another $500 million is budgeted for maintenance of naval reserve ships.

Details for future maintenance spending and numbers of availabilities are contained in the IMA report.

Market Share IMA has calculated the historical market share of shipyards involved in Navy ship maintenance work. In the new report is a six-year tabulation of scheduled ship maintenance jobs performed by the eight public shipyards, three Navy-owned ship repair facilities in the Pacific and the more than 50 commercial ship repair firms involved in this sector.

Data are organized under 29 ship classes—and the market share is calculated for each shipyard over the FY 1985-1990 period.

Exhibit 3 illustrates IMA's mar- ket share analysis. Data are shown for two classes of ships: submarine tenders and tank landing ships. The number of jobs and percentage market share for each shipyard is shown. Details for all 29 ship classes are provided in IMA's new report.

New IMA Report Available IMA has just prepared an indepth analysis of U.S. Navy ship maintenance, repair and modernization.

The 150-page report details future work activity and analyzes issues which will affect ship repair industry prospects. Specific job starts in in FY 1991,1992 and 1993 are detailed.

The report is available for $575.

To order, contact IMA Associates, Inc., 2600 Virginia Avenue, NW, Suite 901, Washington, D.C. 20037; telephone: (202) 333-8501; or fax: (202) 333-8504.