May 30 2014
At our meeting on May 20th we had the pleasure of hearing from Kristiné Reeves from the Governor’s Office of Economic Development and Competitiveness. Kristiné is the Director of the Military and Defense Sector. From the office’s web site:
Washington State Military and Defense Industry
Governor Inslee’s top priority is to create an economic climate where innovation and entrepreneurship can continue to thrive and create good-paying jobs in every corner of our state. The Military and Defense sector, as Washington’s second largest direct public employer, just behind the State itself, and a key industry that cuts across many sectors in Washington, helps create the backbone for a strong economy through our diverse defense missions and military installations, our pioneering companies, and our military friendly communities.
How do we define Washington State's military and defense sector:
- Infrastructure (Missions, Installations & Workforce)
- Industry (Suppliers & Contractors)
- Partnerships (Public, Private & Social Organizations)
Impacts of Washington State's military installations and defense related assets:
As the second largest public employer in Washington employing nearly 136,000 active duty, reserve, guard and civilian personnel, home to over 670,000 veterans including 75,000 retirees and nearly 91,000 military families; Washington’s military and defense community supports over $14 billion dollars in annual procurement supported by over 1,000 businesses across the state, representing nearly 4% of the state’s GDP.
What’s next for Washington State's military and defense sector:
Top 3 Items to Focus on in 2014
- Coalesce the Sector (by three primary sub-groups)
- Communicate the Sector (in-state/out-of-state)
- Address challenges and opportunities for growth with focus on base realignment and closure (BRAC)
April Meeting Rescheduled
Mar 26 2014
Our next meeting will be Thursday May 1st at the Baymont and will be starting promptly at 11:00. We are accommodating our speaker, Rear Admiral Galinis, who is the new head of Navy Regional Maintenance Command replacing Dave Gale.
Rear Admiral Galinis is a native of Delray Beach, Florida. He is a 1983 graduate of the U.S. Naval Academy where he received a Bachelor of Science degree in Electrical Engineering. He holds a Master of Science in Electrical Engineering from the Naval Post Graduate School.
Galinis’ tours as a Surface Warfare Officer included Damage Control Assistant onboard USS Vreeland (FF 1068) and Engineer Officer onboard USS Roark (FF 1053). He was selected for transfer to the Engineering Duty Officer community in September 1991.
Galinis’ initial engineering duty tour was with the Supervisor of Shipbuilding, Conversion and Repair, New Orleans, La where he worked on both new construction and repair projects including assignment as the PMS 377 Program Manager’s Representative for the LSD (CV) Shipbuilding Program. Upon completion of this assignment, he served as the Senior Damage Control Inspector for the Board of Inspection and Survey, Surface Trials Board.
In 1997, Galinis reported to Washington, DC where he served in a number of different positions including the DD 21 Program Office, LPD 17 Program Office, Office of the Chief of Naval Operations in the Requirements & Assessments Directorate (N81) and in the Office of the Deputy Assistant Secretary of the Navy for Shipbuilding as the Chief of Staff.
Following his selection as the LPD 17 Program Manager, Rear Admiral Galinis reported to PEO Ships, LPD 17 Program Office in October 2005. During his tour as Program Manager, the first four ships of the San Antonio, Class of amphibious transport dock ship were commissioned; the fifth ship was delivered and construction started on four additional hulls. In September 2009, he reported as the Supervisor of Shipbuilding, Gulf Coast overseeing Navy ship construction projects and Foreign Military Sales work in shipyards along the Gulf Coast and Wisconsin. He then served as Commanding Officer of Norfolk Ship Support Activity (NSSA), where he led surface ship maintenance efforts from October 2011 until September 2013.
Galinis has received various personal and campaign awards, including the Legion of Merit, Meritorious Service Medal, Navy and Marine Corps Commendation Medal and Navy and Marine Corps Achievement Medal.
NISRIC Navy Day
Apr 16 2014
Notes by Jim Taylor, RDML (ret)
RADM (ret) Joe Carnevale did another outstanding job translation the data base of the Office of Management and Budget (OMB) into a picture the average taxpayer can understand. The most disturbing piece of information was the fact that all the money the federal government took in from all sources in 2013 was barely enough to pay the entitlement bills for the year (Social Security, Medicare and Medicade being the big items). That means the all the rest of government bills, defense and all other departments, were paid for with borrowed money (deficit money). This helps us understand the tremendous pressure on the future defense budgets and our industry. The defense maintenance budget is only funded to 80% and Navy is moving to stand down 11 0f 22 cruisers, 4 of them in 2015 and inactivate 12 surface ships including all 7 reserve frigates to help cover the funding shortfall.
CNO reminded us that 70% of the world’s surface is water, 80% of the world’s people live within 100 miles of the coast, 90% of the global trade travel by wage,r and over 90% of the world’s communications between continents travels on cables under the sea. These facts highlight the importance of having a dominant Navy to protect our national interests. We operate forward with 92 of our 288 ships deployed today. We are in the process of building the next generation of Navy ships and modernizing our most capable combatants but the budget challenges are great.
RADM Rowden, the Surface Warfare Sponsor on the CNO’s staff, discussed the strategy for our surface combatants. We plan to”make the things we have today work”, “build to the future”, and “support rebalance to the Pacific”. It is all about Warfighting First. Our future ships must embrace flexible designs and technology enabled effective upgrades to achieve our goals in this funding environment.
The threat they all acknowledge, is the drastic impact to future budgets if we experience sequestration again. There is no approach that will keep the Navy from shrinking dramatically if that happens. Each of us needs to be vocal with our politicians on supporting our Navy. Your PSSRA board is doing our part in concert with the other Ship repair Associations.
From left to right: Joe Koreis, Mark Kipps, Ed Zajonc, Congressman Derek Kilmer, Greg Bryant, Gene Kegley, Carla Newell
On the hill crawl: Gene Kegley, Carla Newell, Greg Bryant, Jeff Bjornstad, Ed Zajonc (Mark Kipps photographing). In addition to Congressman Kilmer's office our group visited Senators Murray and Cantwell, Congressman Smith, and Congressman Larsen.
NISRIC Navy Day
Apr 10 2014
Notes by David Jack, PSSRA Board of Directors
Our morning started with an exciting line up of speakers lead by the Chief of Naval Operations, Admiral Greenert, followed by the Commander Fleet Forces Command, Admiral Gortney and Commander Naval Sea Systems Command, VADM Hilarides.
The afternoon sessions were kicked off by RADM Shannon, Commander Military Sealift Command
Admiral Shannon opened his remarks with insights into the many ways MSC is supporting the Navy mission. He stressed the great value he places on maintaining the relationship between MSC and the ship repair and ship building industries. He views these relationships as ones in which we both need and support each other. He then went into some detailed information regarding MSC assets and mission support capabilities. He stated that on any given day, MSC is tracking over 110 vessels and that during surge periods; this number can grow as high as 175. Next he highlighted the recent successful conversion of USNS CAPE RAY. His comments were very favorable of the ship repair industry companies involved and the skills displayed during the conversion.Because of the outstanding efforts of those involved, mobile chemical weapons destruction capabilities were added to the country’s arsenal of tools used for global peace. He also talked about how MSC and MARAD are combining missions in many areas as they continue to grow and support their customers. He stated that since 1949, MSC has grown from two basic missions to more than 20 currently. The demand signal for MSC vessels is growing. He has heard from the Chief of Naval Operations, Vice CNO and Commandant of the Marine Corps all echoing the importance of the role MSC plays in their maritime strategies. He is working hard to respond to the increasing needs and meets regularly with fleet commanders to discuss specific challenges and MSC solutions. He has seen a recent spike in “special mission” ships such as MLP, AFSB and JSHV. He disclosed that there are plans in the works to inactive two of the four current AOEs, and that he is worried that MSC will be significantly challenged in supporting core mission areas as the Navy continues to grow smaller. Next, he highlighted changes over the past year which included Headquarters consolidation, optimized FRP, JSHVs – aluminum welding and ship fitting skill sets, water jet maintenance, annual dry-docking requirements, increase in oil production which is leading to increase for tankers and off shore craft. He stated that there are currently 85 US flagged tankers, and 15 MSC TA-Os. This all equates to more maintenance and increased competition for dock space. He also talked about the repurposing of platforms. In the manpower department, he talked about the more than 600 MSC employees on the east coast and how they will be consolidating resources to Norfolk over the next five years. He expects MSC to be leaner and more efficient when this consolidation is complete. He briefly talked budget where he discussed that $583M was spent in 2013. In the coming year, FFP contracting, sequestration and declining budgets will mean more competition for both new construction and maintenance dollars.They are working on out year engineering requirements analysis, which identifies essential and beneficial upgrades, allows for budgeting/ planning for operations past the service life of their vessels (which averages 45 years). This will consist of three phases: logistics supportability study, hull and structural analysis and shipboard survey process. Lastly he went over maintenance planning (government owned/government operated) for Standard Logistics Ship overhaul cycle which includes: dry-docking every 2.5 years, mid-term availability every 18 months, quarterly voyage repair availabilities, inspections and surveys at regular intervals and continuous ABS surveys (5 years) and USGC inspections annually. He then went over the government owned/contractor operated maintenance plan which includes dry docking every five years, shortened to every 3 years as needed to support sponsor cargo requirements and every 2.5 years for CONSUS reduces operating status ships. Also there will be inspections and surveys at regular intervals to include ABS every five years, annual USCG inspections, annual internal safety inspections and management system audits.
Our next speaker was RADM Gale, NAVSEA 21
Admiral Gale started off his presentation with a slide covering his “six big rocks” which include, assessment plan/policy, sustainment program, SURFMEPP, RMC capacity/capability, availability execution/Work Certification and alignment/oversight. He then addressed feedback from the CNO regarding frustration with surface ship maintenance. He is very involved in an improved assessment process and stated that the Total Ship Readiness Assessment (TSRA) program is alive and well. Next he talked about Integrated Sustainment and how the focus is on core life cycle solutions. He gave a briefing on progress within the SURFMEPP program stating that the organization is now 241 employees strong and has been working hard on technical foundation plans, base maintenance plans (BMP), the reconstitution of the “I” level maintenance activities, work force development within the RMCs and continuing improvements in the Joint Fleet Maintenance Manual (JFMM). Regarding “Alignment Oversight” he talked about JFMM changes, RMC policy standardization, risk management and discussed SEA 21 realignment around modernization and sustainment. Next he discussed SURFMEPP efforts which included SPM, modernization programming, maintenance/modernization integration, contract strategies, planning yard roles, RMC functions which covered execution planning, IPTD/PMR, lifecycle management and current readiness. He stated that “about half of the availabilities are not long enough to accomplish the work scheduled. RMCs are now planning long range requirements into the availabilities. They “integrate – execute – document – and provide feedback.” He commented on maintenance and modernization planning and execution, stating that there are two governing policies, multiple independent milestones, imprecise integration requirements and excessive opportunities for variance in interpretation and execution. He stressed the importance of getting a lock on the availability work package, and the need to plan and integrate surface maintenance and modernization sooner. He also addressed new contracting strategy stating “the Navy will be implementing a family of contract strategies utilizing FFP where possible to meet surface ship maintenance, repair and modernization requirements.” They are looking at “single award IDIQ type contracts” where availabilities will be fixed price. He talked about how third party planning enables this contract strategy. He is considering “national planning contracts.” He fielded a question about whether the Navy would continue to consider ABR/MSR certifications for pre-qualifying ship repair companies. He responded that he believed this program should be resurrected. He also took a question about the role SPAWAR plays in the RMC/SEA 21 effort. He replied that he felt that these activities were now working more effectively together. He highlighted recent issues with CANES installations and stressed that use of third party SIDs must be discontinued as they were causing problems in execution.
Our next presentation was by RDML Galinis, Commander Naval Regional Maintenance Centers.
Admiral Galinis opened his remarks by laying out the CNRMC “Action Plan.” This was comprised of the following key elements: Tactical, Operational, and Strategic. Under the “Tactical” element he discussed the need for integrated project team development, RMC policy standardization, work force development, cost engineering and analysis, TSRA, and quality assurance initiative implementation. Under the “Operational” element he covered “End to End” policy/process oversight review, JFMM, need to develop actionable/credible surface ship maintenance and modernization metrics, need to coordinate Afloat Training Group (ATG) surface force readiness manual changes, TSRA activities and continue to work on RMC capacity and capabilities. Under his “Strategic” element he talked about a National Contracts Strategy , and the need to support the Amphibious Response Group (ARG) which has been deployed to Mayport, Florida, the forward deployment of Naval forces in Rota Spain and PC/MCM support needed in Bahrain, LCS maintenance strategy, and need to integrate SURFMEPP. Next, he discussed his priorities which included: engaging the six big rocks, decreasing CASREP/Fleet Technical Assists, and increasing shipboard technical expertise and QA oversight. He commented that he feels RMCs are still about 10% undermanned. He is looking at “right sizing” the availabilities based upon budget, historical execution times and actual costs. He discussed FY15 availabilities and how about 50% are too big to accomplish within their budgets and schedules. He talked about the impacts of late identification of growth in availabilities and cited a recent availability where they saw 50% of the growth identified more than 50% into the availability. He is looking at being consistent across the RMC enterprise in the way growth is included and funded upfront. He is not satisfied with the way that integrated project schedules are being progressed. He made a comment that the Navy is running at about a 30% growth rate which is above the target range of 15 to 20%. He acknowledged that it is taking about three weeks for a typical Request for Contract Change (RCC) to be processed and that this is “way too long.” He also talked about the need to maintain responsiveness during transition to new contracts strategy. He discussed the need for long term relationships and effective communications with industry. He felt that there is a lot of room for improvement and change needed. From his perspective, the ship repair activities are “world class” and are the best at what they do. He believes that industry has the technical excellence needed to serve the Navy’s maintenance requirements. He stated that the defined priorities for the Naval Shipyards are “Safety,” “Quality,” “Cost” and “Schedule,” in that order. Lastly he talked about his “focus areas” for 2014 which included stabilizing availability schedule performance, cost stabilization of private sector availabilities, proper resourcing of RMCs and improved communications across the enterprise with Navy customers. He stated that they are on a path to be up to almost 2700 sailors at Intermediate Maintenance Activities (IMA) by the end of the year. He also talked about the need to renew actions to identify, evaluate and implement contracting changes that improve execution of surface ship maintenance. Lastly he spoke of the need to establish forward deployed ship support activities in Naples and Rota.
Our next speaker was RADM Rabago, Assistant Commandant for Engineering and Logistics, USCG
Admiral Rabago began his remarks with a review of the Coast Guard’s roles and missions. He began with Maritime Safety role which encompassed marine safety, and search and rescue missions. Next he went over the Maritime Security role which includes drug interdiction, undocumented migrants and defense readiness missions. He then addressed concerns which started with the Coast Guard’s expanding mission requirements and increased operational tempo. He spoke of the difficulty of maintaining mission readiness with declining resources and of the need to bring new assets into service to support the expanding mission roles. He also stated that they need to integrate more complex maintenance into their processes which is hampered by a significantly aging fleet. He made a comment that they have some ships that are approaching 70 years old, and that most of their ships are “well beyond their design service life.” Next he went over the USCG maintenance support transformation to “product lines.” He stated that they use an integrated baseline, electronic asset log, maintenance funds, allowance list and are “pushing parts to the fleet.” The product line management approach allows for bi-level maintenance, configuration management and total asset visibility. He talked about their Surface Force Logistics Center located in Baltimore, MD and how they are able to centralize engineering, supply and logistics support there. He commented that they are nearly 100% complete in the product line integration process. He reviewed a maintenance costs per operational hour curve which showed how maintenance costs increase significantly towards the end of a vessels service life. They are using this information to determine when “Service Life Extension Program” (SLEP), or recapitalization is justified. He stated that their maintenance budget was running $433.3M. The breakdown has about 80% going to commercial and 20% is being kept in-house. 54% of their maintenance is planned. He stated that the benefits from this include: better mission support, CFO audit “clean bill of health,” improved contracting, and meaningful metrics. He talked about the way ahead, stating a need for continued centralization of funds, improved metrics, a requirement to strengthen and mature product line management, and the need for a smooth transition from acquisition to sustainment. He also went over fleet sustainment and modernization stating that they were focusing on non-linear finite element analysis, operator guidance system, 3D laser scanning, in service vessel sustainment and new acquisitions. He highlighted the Polar Star reactivation success story, stating that this was a $90M, 3 year industry project which included main diesel engine upgrades, main gas turbine fuel control system work, main motor cleaning, main gas turbine renewal, reduction gear inspection and repairs, machinery control and monitoring system upgrades, installation of an open loop CPP system, after stern tube bearing redesign, gyro compass upgrade, central hydraulic system installation and small boat davit renewal.
Our final speaker was RADM Rowden, Director of Surface Warfare, N96
Admiral Rowden opened his remarks with his priorities which included top level guidance, CNO tenets and threat assessments. He talked on the need to support the rebalancing of the fleet to the Pacific, build to the future and make the “things we have today, work.” He stated that the modifications to current Cruisers will be an enabler to deliver capabilities to the Navy that will “fill the gaps” they presently have. He discussed that there are “big budget issues” in 15. He stated that the phased modernization plan for the Cruisers is being worked out by N96. Current plan is to remove them from service, then execute full modernization on them. This gives the Navy a chance to extend the life of the CGs and ease the pressure on the budget. How it is going to happen still needs to be determined. He sees it happening in two phases, Hull, Mechanical and Electrical (HM&E), then combat systems upgrades. He talked about flight IIA for the DDGs, and how this flight is being modernized closer to their midlife, this increases the return on investment, increases high demand BMD capacity; and as capacity increases, it increases the commonality between the DDGs. He stressed that they are operating in a declining budget environment, with a rising cost of ownership, with expansive modernization, and that future replacement ships are need. He stated that “this all adds up to a decrease in relevance of ship maintenance and modernization needs and will result in readiness degradation.” He commented that ships are being retired early instead of receiving modernizations because of the high costs associated with them. He concluded his remarks stating that the Navy needs a future flexible surface combatant which will have flexible designs and technology which will enable cost effective upgrades.
Letter from the President
Mar 26 2014
Fellow Ship Fixers!
Our last meeting was in February and I felt that you needed an update on what is happening regionally and nationally in our industry. We did not hold a meeting in March because of the annual National Ship Repair Industry Conference (NSRIC) held in our nation’s capitol. I also want to apologize in advance for messing with the schedule for the next meeting but we are flexing to accommodate Rear Admiral Galinis who is the new head of Navy Regional Maintenance Command replacing Dave Gale. Please see the announcement on this site for the meeting which will be held at the Baymont on Thursday May 1st (yes, the April meeting is sliding to May). RDML Galinis’ schedule originally had him here the previous week which would have meant moving our monthly only a week to make it work. RDML Galinis is excited to talk to our group and is looking for good engagement with you on maintenance issues.
Our meetings in DC for NSRIC were very informative. Over the next two weeks we will be posting short articles written by board members about the week’s events. The theme that came through loud and clear to me is that the Navy will continue to be fiscally challenged for the foreseeable future. Maintenance will get a decent share of the budget but there will be tradeoffs that have to be made. The Navy is looking to industry to help them save money and shorten availabilities so that the ships can stay forward and ready. The presentations from NSRIC are available at this link. I would suggest that you take some time to look at both the CNO’s brief and at the brief that retired Admiral Joe Carnevale of SCA put together on the nation’s fiscal situation. We all need be informed and to play a role in sending the message to our elected representatives and to our families, friends and neighbors that the Navy is important to our nation. The free flow of the world’s goods and services relies on open sea lanes and that affects every part of our country. Joe’s brief shows that our nation could just do away with the department of defense and still not put our fiscal house in order. I am not going to get all political here but regardless of where you sit on the political spectrum the numbers are what they are. The debt and deficit cannot be fixed without looking at either entitlement programs or additional revenue or both.
I hope that all of you have a prosperous spring. Please continue to watch for updates via email or postings on our website. I am always looking for feedback from members so please contact me with your ideas, comments or questions.
No General Membership Meeting in March
Feb 28 2014
Our board will be attending NSRIC.
Feb 28 2014
Frank Foti of Vigor discusses challenges ahead for our industry during our luncheon meeting on February 18.
February General Membership Meeting
Jan 27 2014
Our next meeting will be Tuesday, February 18, 2014 and our speaker will be Frank Foti, President and Chief Executive Officer of Vigor Marine.
Frank Foti has been at the helm of Vigor Industrial for 16 years.
Frank got his start in the business world in the telecomm industry, where he worked from 1982 until 1988, when he took over the family construction business. He sold that company in 1994 after growing revenues by 260 percent. In 1995, Frank purchased Cascade General, a ship repair company in Portland, Oregon. He successfully built the company in a declining market by creating, negotiating and introducing innovative financing structures and labor strategies. Frank privatized Portland’s public shipyard, restructured the company’s debt and founded Vigor Industrial LLC to set the stage for growth. Under his leadership, Vigor has grown from the single Portland facility to operations in Port Angeles, Bremerton, Everett, Tacoma and Seattle, Washington, and Alaska with the acquisition of Alaska Ship and Drydock in Ketchikan in 2012.
Frank believes strongly that providing rewarding, family-wage industrial jobs is the best way Vigor can strengthen our workers’ families, communities and our nation. He has distilled this idea into one simple statement: “These industrial jobs matter.” With this core value in mind, Frank is committed to growing Vigor through continued investment, innovative partnerships with labor, competitive products and by fostering Vigor’s highly adaptive, entrepreneurial company culture at all levels of the organization.
Frank currently serves as chairman of the Shipbuilders Council of America, which represents 48 companies and more than 120 shipyards on along U.S. coastlines, the Great Lakes, and inland waterways.