Metro Machine Wins AMPHIB Upgrade Contract

Metro Machine wins contract for 'midlife' upgrade of amphibious ships

By Jon Glass
The Virginian-Pilot
© February 1, 2008 

NORFOLK

Metro Machine Corp. has snagged a lucrative Navy contract to perform major overhauls of six amphibious dock landing ships.

The hotly contested multiship, multioption contract is potentially worth $288.1 million and should give the Berkley ship repair yard steady work for the next six years, said John Strem Jr., Metro's president and chief operating officer.

Metro and three other Elizabeth River repair yards submitted bids for the contract nearly a year ago, Strem said Thursday. Naval Sea Systems Command informed the company Monday it had been selected, but the Navy did not immediately make the award public.

"We're quite happy - it's been a long time coming," Strem said Thursday. "I think it's very significant."

The Norfolk-based ships involved are known as the LSD-41 or Whidbey Island class. They are 609-foot-long workhorses that transport landing craft, helicopters and personnel on amphibious assault missions.

Under the contract, the ships will undergo a "midlife modernization," expected to include such things as upgrading machinery controls, installing software to automate engines and converting steam-run equipment to electric. All of the ships will be lifted from the water into dry dock. The scope of work is broad enough that each will be in the yard for close to nine months, much longer than the routine 60- to 90-day maintenance jobs.

"There's going to be a significant amount of upgrades, and we've been told there's a pretty extensive repair package as well," Strem said.

Metro teamed with BAE Systems Norfolk Ship Repair as a major subcontractor to bid on the contract. BAE Systems also submitted its own bid vying to be the prime contractor.

In addition, rival Norfolk yard Marine Hydraulics International Inc., known MHI, submitted a proposal for the work. In another bid, MHI, which does not own a dry dock, teamed with Colonna's Shipyard Inc.

"I'm very disappointed," said Gary Brandt, MHI's president and chief executive.

Brandt said it was too early to say whether MHI plans to protest the award. The Navy is expected to brief yards that submitted bids on its selection process late next week, he said.

"In their letter, they said the award was based on 'best value,' but we don't have the details," he said.

Since 2004, three of the seven high-stakes multiship, multioption Navy contracts awarded in Hampton Roads have been protested. The Government Accountability Office, a federal watchdog agency, has upheld one of the protests, while the Navy acknowledged making errors on another.

For Metro, the contract award comes at a time when it and other local yards have been laying off workers as Navy work has slowed. Currently, Strem said, Metro has around 100 workers on furlough, about a quarter of its work force.

Expecting a slow February, MHI, with roughly the same number of employees as Metro, also has furloughed about 100.

Brandt, who said MHI just won a contract for maintenance on a Military Sealift Command vessel, expects work to pick up in March and that the yard would begin calling workers back.

BAE Systems recently has laid off around 15 shipfitters, and the union there is anticipating more workers to be furloughed this winter, said Mike Patterson, president of International Brotherhood of Boilermakers Local 684.

Most shipyard executives say Navy work in the port, scheduled around fleet operational needs, is expected to pick up by the summer and remain steady through next year.

Strem said the first job under the LSD-41 contract is the overhaul of the Gunston Hall, LSD 44, based at Little Creek Naval Amphibious Base. The work is expected to run from mid-July to March 2009.

Jon W. Glass, (757) 446-2318, jon.glass@pilotonline.com

U.S. Shipyards Struggle with Labor Shortages

By Daniel Lovering, AP Business Writer
Manufacturing.Net - January 28, 2008

ERIE, Pa. (AP) — Dirk VanEnkevort wanted to take advantage of a shipbuilding boom when his family's company leased one of the largest dry docks in the Great Lakes region in 2005. But now he is so short-handed he has turned to robots to help keep up.

His company, Erie Shipbuilding LLC, has since hired about 150 workers and equipped the facility on Lake Erie with sophisticated metalworking tools — including robots. It now has orders to build eight oceangoing barges and plans to hire additional workers as needed.

But as his order book fills, VanEnkevort faces a problem hampering dozens of other mid-size commercial shipyards across the country: a shortage of skilled, experienced workers capable of assembling and welding freight ships.

To fight the shortage, VanEnkevort and other shipbuilders have scoured the country and recruited from afar. They have appealed to prospective employees at local high schools and started in-house training programs. VanEnkevort says his company plans to use robotic welders extensively.

Some shipyards have temporarily hired foreign laborers, including from Mexico and countries in Eastern Europe, under a federal program that allows businesses to obtain so-called H2B visas if they prove efforts to hire locally were unsuccessful.

''There hasn't been any shipbuilding in Erie for quite some time,'' said VanEnkevort, 52. ''So those people that were here are doing other things or moved away. We've just got to find people and train them, which is what we're doing.''

After topping 100,000 in 1998, employment in the U.S. commercial shipbuilding and repair industry hovered around 91,000-92,000 for six years before climbing to 93,600 in 2006, according to the U.S. Bureau of Labor Statistics.

At the same time, demand has soared, mostly at mid-size shipyards. The industry — though tiny on a global scale and prone to dramatic boom-and-bust cycles — has seen its largest expansion since the 1970s in recent years.

The growth has been propelled by demand from shipping companies that are replacing or expanding fleets of aging tankers, tug boats, offshore supply vessels and other boats, in some cases to meet the fast-changing needs of the energy sector.

Single-hull tankers must be phased out and replaced with double-hulled tankers by 2015 under a federal law passed after the single-hull Exxon Valdez ran aground and spilled 11 million gallons of oil in Alaska in 1989.

And oil and gas companies are ordering ever larger and more complex ships to support drilling activities in deeper waters of the Gulf of Mexico, said John Snyder, editor of the New York-based trade publication Marine Log.

The labor crunch in U.S. shipyards has been spawned by several factors, including competition from other trades that offer lucrative work, such as construction in areas hit by Hurricane Katrina in 2005, said Matthew Paxton, president of the Shipbuilders Council of America, a Washington-based trade group that represents more than 35 companies that operate about 100 shipyards nationwide.

''What we've found is there's been a lack of interest in some of the work that our shipyards are doing,'' Paxton said, citing government figures showing there are about 180 commercial shipyards of various sizes across the country.

Industry representatives have fought back by trying to promote the trade in communities near shipyards, and some firms have established training programs for welders and shipfitters — workers who construct the vessels from parts, Paxton said.

''A lot of our shipyards carry significant costs in training and getting people to come to their yards, and there's no guarantee they'll stay,'' Paxton said. ''But they're still willing to do it.''

''We have had to look at foreign labor when things get extremely tight,'' he said, noting that shipyards have tapped workers from Mexico and Eastern European countries with a history of shipbuilding, such as Croatia.

Bollinger Shipyards Inc. of Lockport, La., which operates 12 shipyards in Louisiana and one in Texas, has spent millions on housing for laborers, said Robert Socha, the company's executive vice president of sales and marketing.

''It's not a cost-saving measure,'' he said. ''It's a measure to keep your business flowing.''

Bollinger's use of contract labor has also risen significantly, with contractors now comprising roughly 65 percent of its 3,200-strong work force compared with about 20 percent in the past, Socha said. ''It's all based on people shortage.''

The company's chief administrative officer, Craig Roussel, said he could realistically ''hire 400 people today,'' if they were qualified and available.

Tim Colton, an independent consultant based in Florida, said the labor shortage arose partly because the industry has never been high-paying. It's not a particularly large industry, he said, and most companies are family owned.

A top welder at Erie Shipbuilding earns $18.50 an hour, an amount VanEnkevort said was comparable to pay offered by other companies in the industry.

The shortage extends not only to hourly paid workers, but to supervisors, planners and engineers, ''all the people that make the shipyard function,'' Colton said. ''It's terrible.''

Sean T. Connaughton, head of the U.S. Maritime Administration, said it was difficult to open a new commercial shipyard, even in the current robust market, because of regulatory hurdles. And the revival of existing facilities may be unattractive, he said.

''They can make a lot more money selling that land to a condominium developer,'' he said.

But Dirk VanEnkevort hopes his company, with a 44-acre facility where ships had not been produced for decades, will become internationally competitive. He said he plans to expand his work force to 200.

Employees' cars and trucks hint at the competition for labor within the industry, carrying license plates not only from Pennsylvania, but also from Louisiana and Ontario. Erie Shipbuilding's general manager was hired away from Bollinger.

One of the company's welders, Charlie Potter, 59, of Erie, said he had worked at a shingle factory for 24 years before it closed last year and he entered a training program at Erie Shipbuilding.

''I learned flat welds, verticals, horizontals, overheads,'' he said, preparing to weld a deck section. ''I love it. It's a young man's game, but I didn't have any choice.''

OSHA Shipyard Employment Proposed Rule for Comments

WASHINGTON -- The Department of Labor's (DOL) Occupational Safety and Health Administration (OSHA) announced in the Federal Register of 12/20/07 they are accepting public comments on a Notice of Proposed Rulemaking (NPRM) on General Working Conditions in Shipyard Employment. The proposed rule aims to help reduce hazards and provide greater protection for shipyard employees. The agency will be accepting public comments on the proposed rule until March 19, 2008.
"Working in shipyards is one of the most hazardous occupations in the nation," said Edwin G. Foulke, Jr., assistant secretary of labor for occupational safety and health. "Shipyard employees perform industrial operations such as abrasive blasting and welding, operate heavy equipment and often work in confined spaces onboard vessels. This proposed rule would help reduce the hazards these employees face."
The proposal updates and clarifies provisions in the shipyard employment standards (29 CFR Part 1915 subpart F) that have largely gone unchanged since OSHA adopted them in 1972. OSHA proposes to revise and update existing provisions and to add new provisions, including the control of hazardous energy and motor vehicle safety.
Proposed updates include establishing minimum lighting for certain worksites, accounting for employees at the end of work-shifts if they work in confined spaces or alone in isolated spaces, and adding uniform criteria to ensure shipyards have an adequate number of appropriately trained first aid providers. The proposal also updates sanitation requirements.
Interested parties may submit comments electronically at http://www.regulations.gov, the Federal eRulemaking Portal; by sending three copies to the OSHA Docket Office, U.S. Department of Labor, Room N-2625, 200 Constitution Avenue, NW, Room N-2625, Washington, DC 20210; or by FAX at (202) 693-1678 if the comments and attachments do not exceed 10 pages. Comments must include the Agency name and Docket Number for this rulemaking (Docket No. OSHA-S049-2006-0675).
Under the Occupational Safety and Health Act of 1970, employers are responsible for providing a safe and healthful workplace for their employees. OSHA's role is to assure the safety and health of America's working men and women by setting and enforcing standards; providing training, outreach, and education; establishing partnerships; and encouraging continual process improvement in workplace safety and health. For more information, visit www.osha.gov.

New OSHA Compliance Assistance Products Available

VSRA received the most recent update of the OSHA Compliance Assistance products which was compiled by the Shipbuilders Council of America.  It includes publications, eTools, Safety and Health Topics pages, and case studies and success stories.  The update also includes products that were developed by Alliance Program pariticpants.

The update covers products issued in the first quarter of  FY 2008 .  There are links to the individual products in the document.

Aircraft Carrier Industrial Base Coalition (ACIBC) Wants You

OSHA Maritime Train the Trainer Course in Portsmouth

    The National Resource Center for OSHA Training (WVU) and the OSHA Region III Education Center are conducting a OSHA 5400 Maritime Train the Trainer Course at the Dry Dock Club, Portsmouth, VA., February 18-21, 2008.   

This course is similar to the OSHA 500 and 501, but directed to the maritime industry.  It is a new OSHA program with 10 and 30 hour cards specifically for Marine Terminals 1917, Shipyard 1915, or Longshoring 1918.

This course is designed for personnel in the private sector interested in teaching the 10- and 30-hour maritime safety and health outreach program to their employees and other interested groups. Special emphasis is placed on those topics that are required in the 10- and 30-hour programs as well as on those that are the most hazardous, using OSHA standards as a guide. Course participants are briefed on effective instructional approaches and the effective use of visual aids and handouts. This course allows the student to become a trainer in the Outreach Program and to conduct 10- and 30-hour maritime courses in three areas:

If you have any questions, please contact Tom Stockdale, Program Coordinator at WVU at (800) 626-4748 or at Tom.Stockdale@mail.wvu.edu.

EPA Mandatory Greenhouse Gas Reporting Scheme - 2009

Environmental News
January 16, 2008
EPA to Establish Nationwide, Mandatory Greenhouse Gas Reporting Scheme by 2009
By Michael Lufkin

Tucked into the massive $500 billion omnibus budget package signed into law by President Bush last month is a provision that requires the Environmental Protection Agency (“EPA”) to establish a mandatory program that will require U.S. companies by mid-2009 to report their greenhouse gas (“GHG”) emissions. The GHG reporting provision, which was inserted into the budget package in the final days of Congressional negotiations, directs the EPA Administrator to publish a draft GHG reporting rule nine months following enactment of the law, and a final rule within 18 months, which would be June 2009.[1] The law does not specify which industries must report or how often reporting must occur, but leaves those details to EPA. It also does not specifically preempt state reporting laws.[2]

Over the past few years, there have been numerous proposals in Congress to create a national GHG reporting program as a first step to support comprehensive climate change legislation. This past year, more emphasis has focused on enacting a national emissions trading scheme, such as the one contemplated by the Lieberman-Warner Climate Security Act of 2007 (“Lieberman-Warner Act”). See previous Environmental News article entitled, Congress Takes First Step Toward Enacting Federal Climate Change Legislation. Most observers assumed that a national GHG reporting program would be passed as part of more comprehensive federal emissions trading legislation (e.g., that the Lieberman-Warner Act would require EPA to create a reporting program). Instead, the reporting mandate has been inserted into law ahead of comprehensive climate legislation, leaving EPA in the position of having to develop a reporting program without knowing the details of the regulatory program it will ultimately be supporting. The enactment of the law also comes at a time when many states are adopting their own GHG emission reporting laws, which the new federal law does not expressly preempt. This potentially dual system of emissions reporting creates further challenges for EPA, and for companies trying to prepare for new reporting obligations.

Purpose of GHG Reporting
Reporting of GHG emissions is viewed by many as a first step to support comprehensive emission reduction programs such as those being contemplated both in Congress and by many states. In order to craft policies to achieve the emission reductions required by the law, policymakers need up-to-date and accurate information relative to the source, size and growth of GHG emissions. This is particularly true for market-oriented approaches to reduce GHGs such as a cap-and-trade program, where reliable and transparent emissions data would be the foundation for developing allocation systems, reduction targets, and enforcement provisions. Currently, only coal-fired power plants are required to report their GHG emissions to the federal government. EPA regulations have required monitoring and reporting of CO2 emissions since 1993 under Section 821 of the 1990 Clean Air Act amendments. 40 C.F.R. § 75.l0(3)(i). Some companies voluntarily report their GHG emissions through a number of different voluntary registries.

Summary of the Federal Reporting Mandate The provision directing EPA to establish a federal GHG reporting program was inserted into the appropriations bill by Senator Amy Klobuchar

(D-MN) and Senator Dianne Feinstein, the California Democrat who chairs the Senate Appropriations Subcommittee on Interior, Environment and Related Agencies, which sets EPA's annual budget. The new law directs EPA to use its existing authority under the Clean Air Act to create a mandatory GHG reporting program that would cover businesses across all sectors of the U.S. economy. The one-paragraph directive does not provide details as to how the agency must structure the reporting program. Rather, the EPA Administrator is granted the discretion to determine such significant design details as the types of sources that will be covered by the program, thresholds of emissions above which reporting will be required, the frequency of reporting, and other important features of the program.[3] The law appropriates to EPA $3.5 million for conducting the rulemaking.

Coordination with Other GHG Reporting Schemes A significant issue for EPA in designing the new reporting program will be the extent to which it tries to harmonize its program with reporting regimes being developed by states or by voluntary registration programs such as the Climate Registry.

A number of states have already or are currently in the process of developing mandatory reporting schemes to support their GHG reduction efforts. The State of California’s reporting rules will require reporting of GHG emissions beginning in 2009. California will require more than 800 industrial and commercial sources in that state to annually measure and report their GHG emissions to the California Air Resources Board. The regulations also require third-party verification of emission reports submitted by regulated sources. New Mexico’s reporting program, which also went into effect on January 1, 2008, shares some design elements with California’s, but differs with respect to the GHGs initially covered, the scope of industrial sectors covered, and the verification process.[4] A number of other western states, including Washington and Oregon, have committed to adopt reporting programs so that they may take part in the Western Climate Initiative (“WCI”). The WCI is a regional collaboration among western states and several Canadian Provinces for reducing GHG emissions.[5] As more states develop reporting programs, the differences in program design have the potential to become a serious challenge for businesses operating in multiple states.

To try to avoid regulatory inconsistency, an independent organization called the Climate Registry was formed last year and is supported by 39 states, as well as by several Canadian provinces and Mexican states.[6] The Climate Registry aims to standardize GHG accounting and reporting rules across multiple jurisdictions and to provide businesses with a means of publicly recording their emissions in a single consistent and comparable report. The Climate Registry is currently in the process of developing general reporting protocols which are expected to be adopted in January 2008. The reporting protocol will be based on the internationally recognized Greenhouse Gas Protocol Corporate Accounting and Reporting Standard authored by the World Resources Institute and World Business Council for Sustainable Development (WRI/WBCSD). Members of the Climate Registry hope that mandatory GHG reporting, whether at the state or the federal level, will in the future be closely linked or even coordinated through the Climate Registry’s program to ensure consistent and harmonized reporting standards.

Whether EPA will utilize the reporting protocols being developed by the Climate Registry is unclear at this time. Also unclear at this time is the fate of the federal government’s existing voluntary GHG registry, known as the 1605(b) program within the Department of Energy. This program was designed to track progress towards achieving the President’s goal of reducing the U.S. GHG emission intensity by 18 percent. The

1605(b) program has been criticized for being inconsistent with international GHG accounting standards and unnecessarily complicated.

The program has also been criticized for its failure to require third-party verification of emissions data and its inability to support multiple policy objectives.

Conclusion
The requirement that EPA create a national mandatory GHG reporting program is viewed by many as a necessary first step before federal regulation of GHG emissions. In creating the reporting program, the challenge for EPA will be to avoid a program design that is inconsistent with similar programs that have already been adopted or are in the process of being adopted by states and/or the Climate Registry.

For more information on national and state GHG emissions reporting requirements, and how they will affect your business or agency, please contact Michael Lufkin or any member of Marten Law Group’s Climate Change/Sustainability Practice Group.

[1] HR 2764 (Public Law No. 110-161) provides in pertinent part that, “Of the funds provided in the Environmental Programs and Management account, not less than $3,500,000 shall be provided for activities to develop and publish a draft rule not later than 9 months after the date of enactment of this Act, and a final rule not later than 18 months after the date of enactment of this Act, to require mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the economy of the United States.”

[2] Id.

[3] Id.

[4] Information on New Mexico’s GHG reporting rulemaking can be found at http://www.nmenv.state.nm.us/aqb/GHG/ghgrr_index.html.

[5] See press release, Five Western Governors Announce Regional Greenhouse Gas Reduction Agreement, copy available at http://www.governor.wa.gov/news/2007-02-26_WesternClimateAgreementRelease.pdf

.

[6] Information about the Climate Registry can be found at http://www.theclimateregistry.org/.

Marten Law Group provides the materials and information contained in this web site for its clients and non-client internet users for informational purposes only. This website is not a substitute for legal advice. Please consult with your legal counsel for specific advice and/or information. Using or accessing this web site does not create an attorney-client relationship between Marten Law Group and the accessing user or browser.

Mike Lufkin has practiced environmental law for nearly ten years in the State of Washington with a focus on environmental and natural resource litigation and climate change issues. During the course of his career, Mike has represented both public and private clients in matters involving project permitting, hazardous waste cleanup, development of environmental impact statements, and energy facility siting.

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FY-09 NAVSEA Standard Items Posted

Activity SSRAC Coordinators are responsible for advising users within their respective activities and MSR contractors under their cognizance of the availability and effective dates of these products.

Please read the above letter and visit http://www.sermc.surfor.navy.mil/SSRAC1/index.htm and follow the "What's New" link to view/download the items.  PLEASE NOTE THAT THE SSRAC WEB SITE ADDRESS HAS CHANGED!  VISITORS TO THE PREVIOUS WEB SITE SHOULD BE REDIRECTED TO THE NEW ADDRESS.

The requirements of this letter do not authorize any change in terms, conditions, delivery schedule, price, or amount of any existing Government contract.

Linda D. Mayle
Asst NAVSEA SSRAC Coordinator
SERMC Business Office Code 1220/Standards Coordinator
Ph:  904-270-5593
FAX:  904-270-5729
linda.mayle@navy.mil

Jim Babcock to Speak on Short Notice

Late Monday afternoon, a serious family emergency forced Congressman Randy Forbes to postpone his address to the VSRA members.  He is committed to speak to the membership at a future date.

On very short notice, Jim Babcock, Chief Planner for the Future of Hampton Roads, agreed step in and address the membership.  Jim has been the energy and vision of the Hampton Roads Regional Structure Project.  An important piece of that study has been regional transportation. 

Jim's topic will be "The Hampton Roads Regional Structure Project: Approaching the Third Rail Without Actually Touching It."  Our members will be informed of the significant progress in the project over the last 18 months since Jim addressed VSRA.  He will also discuss the various transportation bills before the current session of the state legislature, some which have their roots in the structure project.

VSRA is grateful to Jim for agreeing on such short notice to speak.

UPDATE - Learn The Ropes of How The Congress Works

VSRA Member Exclusive - The Virginia Ship Repair Association invites it members only to attend the first Legislative Strategy Seminar.  This important seminar will be held on Thursday, January 10th, just in time to utilize your new learning to impact the FY09 Defense Budget.   Most VSRA members are either directly or indirectly dependent upon federal funding as their primary source of revenue.  This is your opportunity to get an insiders look at how the federal legislative and appropriations processes work. 

Learn the critical points when you can impact the federal budget.  When is the best time to effectively inject your opinions and suggestions with your legislators?  How can you use House and Senate staffers to your advantage?  When are the critical hearings and committee meetings?

Take advantage of hearing from an expert - Kenneth Panos, Manager of Financial Strategies and Legislative Consulting with the Washington, DC consulting firm of Whitney, Bradley, and Brown, Inc.  The seminar is limited to 50 attendees and is open to VSRA Members ONLY.

About Whitney, Bradley, & Brown - The WBB Training Team is comprised of senior ex-military officers who have significant experience in key service and or DoD offices working requirements generation, budgeting and/or acquisition program management.  The team remains fully engaged with service counterparts as the WBB product areas work DoD programmatic and process issues year round. 

See the Legislative Seminar Announcement for more details.  To register, click on the Legislative Seminar Registration page on the website.  This is a valuable seminar for anyone in your company in senior positions of contracting and business development strategy for your company.  Seats are limited, so REGISTER NOW.