Wednesday, April 16, 2014
WASHINGTON -- A top defense official indicated Wednesday that workers at the Navy's four public shipyards -- including Portsmouth Naval Shipyard in Kittery -- could be given a special exemption from budget-related furloughs.
The Navy has already said that it probably could absorb its share of $43 million in Department of Defense "sequestration" cuts without furloughing any civilian employees this fiscal year.
Yet Pentagon officials still are considering requiring more than 700,000 civilian employees throughout the Defense Department to take up to 14 days of unpaid leave.
However, Assistant Secretary of the Navy Sean Stackley told senators on Wednesday that even if furloughs are required, the Pentagon could opt to exclude civilian employees who perform jobs that directly affect the Navy's ability to carry out its mission.
"And shipyards are in that mix," Stackley told Sen. Kelly Ayotte, R-N.H., during a Senate Armed Services subcommittee hearing.
Furloughing workers at shipyards, Stackley said, would disrupt the maintenance and modernization schedule for ships and is unlikely to save money in the long term.
"I think everyone understands that shipyards are a special case in terms of direct impact on readiness," Stackley said.
"The math states there is going to be more than a one-for-one impact if you furlough."
The Defense Department was forced to absorb roughly half of the $85 billion in across-the-board spending cuts -- known as "sequestration" -- that began March 1 after Congress and the White House failed to agree on another way reduce the federal deficit.
Those budget cuts will continue for the next nine years -- to the tune of roughly $100 billion a year -- unless Congress adopts an alternative.
While not official, the mere suggestion of a waiver or exemption probably will be welcome news to the roughly 4,700 civilian workers at Portsmouth Naval Shipyard.
The shipyard, on the Maine-New Hampshire border, repairs, maintains and upgrades America's nuclear-powered submarines.
Paul O'Connor, president of the Portsmouth Metal Trades Council, the umbrella group that represents all of the labor unions at the Kittery facility, said it is clear that furloughing shipyard workers will not save the federal government any money.
He said hundreds of thousands of other civilian employees still would be furloughed as a result of a Congress' failure to act.
"The work is going to have to be done on the nuclear submarines and aircraft carriers, whether it is done on schedule or behind schedule," O'Connor said.
"It is going to cost American taxpayers more money to furlough employees than to keep them on the job."
Senators from Maine and New Hampshire said they were pleased to hear about the possible waiver, although they plan to continue pushing Pentagon officials to give the Navy and other agencies the flexibility to implement budget cuts without furloughs.
"That was good to hear," Ayotte said in an interview. "That makes sense to me, in light of the problems with the maintenance falling behind, that shipyard workers would fall clearly within the waiver authority."
The announcement of a potential shipyard exemption came amid discussion on the Navy's Fiscal Year 2014 and long-term shipbuilding plan. The Navy's budget request includes money for eight new ships, including two Virginia-class submarines and one new destroyer. The five-year plan calls for procurement of 47 ships, including a total of 10 DDG-51 destroyers.
Maine's Bath Iron Works, which is owned by General Dynamics, and Ingalls Shipbuilding in Pascagoula, Miss., are the two primary competitors to build the Arleigh Burke-class DDG-51 destroyers, each of which costs more than $1 billion. BIW, which employs roughly 5,000 workers, has built 36 of the 66 destroyers bought by the Navy since 1985, according to the Congressional Research Service.
In another example of sequestration's effects, however, Stackley said the Navy is roughly $300 million short in being able to procure the 10th destroyer that Congress directed the Navy to build. Including the ship in the current multi-year contracts being negotiated with the two shipyards will result, Stackley predicted, in the "most affordable destroyer that we will be looking at for the foreseeable future."
"We have contract proposals in hand for the 10th ship. We have all but about $300 million appropriated that we need to award the 10th ship," Stackley told Sen. Angus King, I-Maine, during one exchange Wednesday. "So we're in the red zone and we have got to punch this thing across the goal line."
Stackley said afterward that Navy has some time to secure the money in order to exercise its option to add a 10th destroyer to the multi-year contracts.
"We will work with Congress and I expect them to support getting this thing across the line because they were so strongly in support of adding the ship last year," he said.
King pledged to continue working to find the additional $300 million because it would lower costs by allowing the Navy to avoid having to restart the bidding process.
Stackley and other Navy officials also fielded more probing questions from committee members about how the Navy planned to reduce costs for its replacement Ohio-class submarines as well as about cost overruns and quality issues in some shipbuilding programs.
Sen. John McCain, R-Ariz., grilled the panel about why a new aircraft carrier under construction that was expected to cost $10.5 billion is now estimated to carry a price tag of roughly $12.8 billion.
"What can we do to prevent this kind of cost overrun which I can tell you, in the minds of my constituents, is unacceptable?" McCain said. "When we have a terribly damaged economy in my home state of Arizona, I cannot justify it."
Kevin Miller -- 317-6256