Transportation Secretary Slater Announces $1.1 Billion in Contracts to Keep Ships Ready for National Defense (6/12/98)

FOR IMMEDIATE RELEASE
Friday, June 12, 1998
Contact: John Swank
Telephone: 202-366-5807
MARAD 1-98

Culminating a procurement process guided by President Clinton’s commitment to re-invent government, U.S. Transportation Secretary Rodney E. Slater today announced the award of 39 performance-based contracts to 10 American ship-owning and -operating companies to manage 89 ships which stand at the ready to support America’s armed forces.

The total estimated combined value for all 39 contracts over the next five years is $1.1 billion. This figure includes the expected costs of shipyard work and other maintenance and operational expenses for which the ship managers will be reimbursed.

"These performance-based contracts are an excellent example of President Clinton’s and Vice President Gore’s commitment to re-invent government and use common sense in government processes," Slater said. "The contracts will advance the nation’s security interests by ensuring that maritime transportation resources are secure and available when needed."

The ship manager contracts are performance-based service contracts, allowing the government to capitalize on the ship managers’ expertise and commercial business practices.

"This process represents a new way of thinking with respect to government procurement," said John E. Graykowski, acting administrator of the department’s Maritime Administration (MARAD). "It is a genuine public/private partnership which will produce significant savings for the government while obtaining the highest technical performance."

The Ready Reserve Force (RRF) is composed of militarily useful ships maintained in a high state of readiness to be activated within four, five, ten, twenty or thirty days of notice from the Defense Department. MARAD is responsible for acquiring, upgrading, activating, deactivating and maintaining the RRF.

Graykowski said that the partnership with the American maritime industry has been successful because reserve ships have been ready when called and have achieved outstanding operational records. RRF ships have supported military and humanitarian operations in the Persian Gulf, Somalia, Haiti and Bosnia.

When activated, RRF ships are crewed by civilian American seafarers. The highest priority ships are maintained with partial crews onboard. When the ships are activated, remaining crew members come from the pool of seafarers whose normal jobs are aboard U.S.-flag merchant ships which operate in the nation’s domestic and international commerce.

Ship manager contracts are awarded on a competitive basis, utilizing full and open competition. U.S. companies that own or operate ships in commercial service or other government ships are eligible. Each contract covers a group of two or three ships, and the maximum award for any one contractor is 12 ships.

The following table shows the companies awarded ship manager contracts, the contracts estimated value and their
duration, the RRF ships covered, and the ships' present location.

Ship Manager	Contract Amount Term	RRF Ships Assigned	Where Located
Apex Marine Ship Management Lake Success, N.Y.	$7,870,195 5 years $13,792,725 5 years $5,074,365 5 years $9,052,940 5 years $1,384,143 3.25 years	Cape Juby Cape Johnson Cape Taylor Cape Texas Cape Trinity Cape John Cape Jacob Diamond State Equality State Gulf Gulf Trader Banker	JRRF Baltimore Houston Houston Houston BRF BRF Houston Houston BRF BRF
Interocean Ugland Management Corp. Voorhees, N.J.	$10,923,265 5 years $6,257,735 5 years $4,620,530 5 years $6,257,735 5 years $10,844,615 5 years	Gopher State Flickertail State Cornhusker State Cape Mendocino Cape May Comet Meteor Cape Fear Cape Mohican Wright Curtiss Cape Nome	Prepositioning Ship Cheatham Annex, Va. Cheatham Annex JRRF Norfolk, Va. NAS Alameda, Calif. NAS Alameda SBRF Oakland, Calif. Baltimore Port Hueneme, Calif. JRRF
Keystone Shipping Services, Inc. Bala Cynwyd, Pa.	$9,575,500 5 years $9,575,500 5 years $9,575,500 5 years $13,822,690 5 years $9,452,330 5 years	Cape Kennedy Cape Knox Cape Victory Cape Vincent Admiral Callaghan Cape Orlando Cape Henry Cape Horn Cape Hudson Green Mountain State Beaver State	New Orleans New Orleans Beaumont, Texas Beaumont San Francisco San Francisco San Francisco San Francisco San Francisco Bremerton, Wash. Bremerton
Mormac Marine Enterprises, Inc. Stamford, Conn.	$2,028,988 5 years $3,983,130 3.25 years $4,097,519 5 years $8,882,610 5 years $2,104.350 5 years	Lake Scan Cape Catawba Cape Lambert Cape Lobos Cape Archway Cape Alexander Cape Alava Cape Ann Cape Avinof Mission Buenaventura Mission Capistrano	JRRF JRRF Cheatham Annex Wilmington, N.C. Wilmington Baltimore Baltimore JRRF Baltimore Baltimore BRF BRF
Marine Transport Lines, Inc. Weehawken, N.J.	$1,821,710 3.25 years $10,155,570 5 years $10,155,570 5 years $10,155,570 5 years $1,821,710 3.25 years	Cape Cod Cape Chalmers Cape Edmont Cape Ducato Cape Decision Cape Douglas Cape Diamond Cape Domingo Cape Bon Northern Light	JRRF JRRF Charleston, S.C. Charleston Charleston Charleston Charleston Charleston SBRF SBRF
Ocean Duchess, Inc. Houston	$3,036,000 5 years	Alatna Chattahoohchee Nodaway	Tsuneishi, Japan Tsuneishi, Japan Tsuneishi, Japan
Patriot Contract Services, LLC Walnut Creek, Calif.	$6,895,110 5 years $9,247,810 5 years $8,384,140 5 years	Cape Breton Cape Bover Cape Blanco Cape Borda Cape Gibson Cape Girardeau	Alameda, Calif. Alameda Alameda Alameda Alameda Alameda
Pacific-Gulf Marine, Inc Gretna, La.	$1,242,027 3.25 years $1,242,027 3.25 years	Pioneer Commander Pioneer Contractor Banner Courier	BRF BRF BRF BRF
Sea-Land Service,Inc. Charlotte, N.C.	$13,729,875 5 years $8,860,450 5 years $9,299,650 5 years $8,860,450 5 years	Cape Race Cape Ray Cape Rise Cape Washington Cape Wrath Cape Intrepid Cape Island Cape Isabel Cape Inscription	Portsmouth, Va. Portsmouth Portsmouth Baltimore Baltimore Tacoma,Wash. Tacoma Long Beach, Calif. Long Beach
V Ships Marine, Limited Mineola, N.Y.	$3,722,850.00 5 years $3,305,660 5 years $8,458,890 3.25 years $14,631,130 5 years	Cape Florida Cape Flattery Cape Farewell American Osprey Potomac Chesapeake Mount Washington Keystone State Gem State Grand Canyon State Petersburg	BRF BRF BRF Prepo Prepo San Francisco Houston Alameda Alameda Alameda Port Arthur, Tex.