Concerned about a growing backlog of obsolete ships that need dismantling,
the Navy recently issued new guidelines to potential contractors interested
in vessel disposal work.
Industry response to the Navy's request for proposals is due March 9-approximately
one year after the service suspended its ship-scrapping program because it was
deemed environmentally unsafe.
Last spring, the Navy stopped the program in response to highly publicized
accounts of the U.S. government's failure to address environmental violations
by overseas contractors. In the early 1990s, the U.S. Maritime Administration
(MARAD) had been aggressively selling unneeded ships for scrap in foreign markets.
The Navy and MARAD were dealt an embarrassing public relations blow when it
was revealed that contractors hired for ship breaking and disposal were suspected
of violating environmental, worker health and safety requirements. Most of the
horror stories dealt with ship scrappers in Pakistan and India.
The practice of selling vessels for scrap in the export market was also called
into question. That had been traditionally a lucrative venture for the Defense
Department. "The Navy is not exporting ships for scrap, but it is continuing
to scrap ships in the inventory," says Sherri Goodman, deputy defense undersecretary
for environmental security.
The service is also undertaking a pilot project to look more closely at the
cost of actual ship scrapping "so that the government can make a determination
about whether this is an undertaking that we can realistically hope to get money
Ship-breaking processes are much different in nuclear submarines, for example.
"We don't just give it to somebody and get money. The U.S. Navy does [the
scrapping]. That's because of the nuclear materials and the nuclear hazards
involved in that, so that whole life-cycle of the nuclear ship is internalized
in the Department of Defense weapons acquisition process," explained Goodman.
"That's not so for conventional surface ships. And there are good reasons
why it is not. The time is right now to begin to look fully at the full life-cycle
costs and what's the best way to allocate those. And of course, one of the mandates
is to make sure that the scrapping is done in an environmentally sound matter
that also protects human life and safety."
Many U.S. ship breakers have left the business because they have been frustrated
by the government's approach to scrapping, said Robin K. Wiener, executive director
of the Institute of Scrap Recycling Industries, Inc., a Washington, D.C.-based
trade association representing the scrap processing and recycling industry.
The U.S government, she said, generally sells ships for scrapping to the highest
bidder, without substantial knowledge or regard for a bidder's ability or plan
to protect worker health and safety or safeguard the environment during scrapping.
Because of the hazardous nature of some of the contaminants contained in ships
being put up for bid by the Navy and MARAD, "it has become economically
difficult, and at times impossible, to make a profit legitimately scrapping
ships in the United States and also address worker health and safety needs,"
In an interview, she predicted more U.S. ship scrappers would re-enter the
markeplace if the Navy "addressed these problems."
The Navy has now revamped its ship disposal effort so that the ships to be
dismantled will remain titled to the Navy and dismantled as a contractor-provided
The demand for ship disposal skyrocketed as a result of post-Cold War downsizing
of the fleet. The Navy and MARAD have 185 surplus ships. Officials are increasingly
concerned because they are quickly running out of space to store these obsolete
Older vessels contain polychlorinated biphenyl (PCBs) in various shipboard
components. The Navy and the maritime administration as a rule remove ozone
depleting substances and various other hazardous materials from the ships before
they are turned over to the contractors.
New guidelines to companies interested in bidding for the work were unveiled
several weeks ago. A Navy spokesman told National Defense that the service is
taking no chances this time around. Because of the "political interest"
in this project, the Navy must pursue its ship-scrapping efforts in an environmentally
The revamped ship dismantling program calls for the award of multiple indefinite
delivery indefinite quantity (IDIQ) contracts, which are broad in scope and
involve incremental work orders.
The work will involve towing and dismantling the vessel and establishing a
schedule, as well as demilitarizing residual military equipment and completely
scrapping the hull.
Contractors will be responsible for hazardous material, waste removal and disposal,
and sale of scrap material.
The Navy will follow performance-based contracting methods-requiring the successful
completion of ship scrapping while complying with environmental and worker safety
regulations, rather than specifying the procedures on how the contractor should
perform. Separate contracts will be awarded for the East Coast-for up to 12
ships-and for as many as 8 ships on the West Coast.
For Fiscal Year 1999, Congress appropriated $7.5 million for Navy ship disposal.ND
Associate Editor Joshua A. Kutner contributed to this report.