Competition heats up for ship repair jobs: as orders for new vessels lag, yards fight for contracts to maintain existing ones.

• Author: Kennedy, Harold

A long the wharves of Virginia's historic Hampton Roads--home to the largest naval base in the world--the competition among shipyards always has been stiff. These days, however, the shipyards are competing more to repair existing U.S. Navy vessels than to build new ones.

The same is true coast to coast, and the reason is simple. The Navy is ordering fewer and fewer new ships these days. It plans to build five ships in 2003 and seven in 2004. In contrast, during the Reagan era, the Navy was building 35 vessels per year.

Since then, the size of the U.S. fleet has shrunken from 580 ships to 308 this year and is expected to drop to 291 by fiscal year 2006. Meanwhile, the remaining vessels--fighting a war on terrorism and preparing for conflict with Iraq--are working harder than they have in years, according to Adm. Vein Clark, chief of naval operations.

"Today, there are 151 ships on deployment, fully half of the Navy," he told the House Armed Services Committee in late February. "A greater percentage of our ships are underway than at any time in the last dozen years.

To help the vessels stand up to this heavier workload, the Navy has increased its emphasis on ship maintenance. In its fiscal year 2003 budget, the Navy added $3.4 billion to its operations and maintenance and working capital accounts. "Last year, we reduced our major ship depot maintenance backlog by 27 percent," Clark said. An additional 32 vessels received repairs, he said.

Many ships need only routine maintenance. Others-particularly older aircraft carriers and amphibious assault ships, nearing the end of their 30-year service lives--often require urgent, unplanned repairs.

Some ships still in their middle age are being converted to perform new missions. Beginning later this year, four Trident submarines will begin replacing their nuclear munitions with conventional, precision-guided Tomahawk cruise missiles. They will also be outfitted to transport special operations forces for clandestine missions. Starting in fiscal year 2004, Aegis-class cruisers will begin receiving new land-attack, force-protection and air-defense technologies.

With all of this activity, then-Navy Secretary Gordon R England told a 2002 Senate Armed Services Committee hearing that, despite the lull in new shipbuilding "there is substantial work in many of the nation's shipyards."

A recent tour of Hampton Roads' shipyards seemed to bear that out. Hampton Roads is a duster of ports, including Norfolk, Portsmouth and Newport News. Situated at the mouth of the Chesapeake Bay, Hampton Roads has been a shipbuilding site...