She's not much of a warship as warships go, a homely, 8,000-ton pack horse barely capable of 20 knots even without a cargo of M1 tanks.
But in April 1982, when the USS Newport's No. 3 engine room caught fire off the east coast of Africa, the tank landing ship began an odyssey that illuminates the Pentagon's predicament in trying to maintain its war machine.
After dousing the blaze, the 225-man crew nursed the Newport through the Indian Ocean and Suez Canal to the Greek port of Piraeus. Greek mechanics applied first aid to the Newport's diesel engines, and in early summer the ship puttered across the North Atlantic and home to Norfolk.
Here, amid the Tidewater's tangle of docks, derricks and disemboweled vessels, the Navy signed a contract with a private repair yard to fix the Newport for slightly less than $185,000.
Fourteen weeks and more than $1 million later, the Navy got its ship back.
Nowhere does the Defense Department find itself more uncomfortably beholden to private repairmen than in the waters of San Diego, Seattle, Norfolk and other ports where the Navy's armada is patched and overhauled. Private yards, which do more than one-third of the Navy's repair work, are expected to collect $2 billion this year, up from $800 million five years ago.
The Navy and its contractors cohabit a briny world of barked knuckles and greasy coveralls where small repair yards are called "bicycle shops" and commuting costs are known as "downriver time."
It's also a world of love-hate symbiosis between the Navy and private repair firms, each dependent on the other and mutually wary of being exploited.
"Once you're in it and you've torn a ship up, your flexibility is gone," said Everett Pyatt, assistant Navy secretary for shipbuilding and logistics.
"I can't say you're at somebody else's mercy, but a lot depends on the skill of the buyers and the auditors . . . . You have to fight your way through it."
Similar alarms have been sounded for decades. In 1959, the General Accounting Office chided the Navy for runaway costs on ship overhauls.
Twenty-three years later, after countless Navy vows of reform, the GAO found that "problems with overhauls continue." On 119 ship overhauls scrutinized, costs were 50 percent higher than the Navy had expected.
The service's mistakes in dealing with private yards included a penchant to pay almost anything to get a ship back to the fleet quickly, failure to penalize poor work and reward competence and an inability to forestall "lowballing," the practice of winning a contract by deliberately underestimating costs in hopes of making a financial killing on unanticipated repairs.
Navy officials say that those grievances are history, resolved by reform and a depression among repair yards that has given the military new leverage.
They also say the enormous cost growth on the Newport simply reflected more complicated repairs than officials initially anticipated.
As one contractor executive who worked on the Newport said, "Even God couldn't tell you what was wrong with it until you get it up out of the water and look at it."
Documents from the Newport job suggest, however, that even a less omniscient power might have anticipated trouble before work began. Trolling for Jobs
Every day through the summer of 1982, a worker from Marine Hydraulics International Inc. swung past the government bulletin board in Portsmouth to check Navy listings of upcoming repair work.
Usually the job-trolling came up empty but, on Aug. 3, it paid off. The Navy's supervisor of shipbuilding, conversion and repair, known as SupShips, was looking for someone to fix the Newport.
The Navy had repaired most of the fire damage from the Newport's Indian Ocean mishap, but glitches remained, notably in the propeller system.
SupShips sought cost proposals from six Tidewater repair yards and received two replies -- for $529,015 from Norfolk Shipbuilding and Drydock Corp. and for $231,127 from Jonathan Corp.
Marine Hydraulics, which had not been contacted by the Navy except through the bulletin board, weighed in with an unsolicited proposal of $184,799, not only lower than competing bids but a fraction of the $649,082 that the Navy privately estimated the job would cost.
The estimates gap gave the Navy pause, briefly, but after Marine Hydraulics assured SupShips that its bid was firm, the contractor was awarded Job Order 122/82 Aug. 9.
Almost immediately, the contract began to grow. In two months, the Navy signed off on 27 modifications, or "sequences," authorizing more work, more time, more money.
The fine print of those mutations reveals how tempting the Navy sometimes makes it for a contractor to bid low and hope for what industry calls "growth work."
In this instance the Navy consistently was more generous in the sequences than in the original contract. For example:
* Marine Hydraulics' original bid calculated overhead (administrative) costs at a modest 100 percent of labor costs. As the contract grew, however, the Navy automatically allowed Marine Hydraulics a standard 249 percent, essentially giving the contractor more money than initially requested.
* To do the 20,000 hours of work that the Navy estimated would be necessary, Marine Hydraulics had agreed to pay workers $2.65, less than the minimum wage, according to labor costs submitted in the firm's bid. But, as the contract grew, SupShips automatically permitted $7.58 an hour for labor.
* Marine Hydraulics also omitted provisions for "downriver time" in its original proposal, according to government documents. But, with each sequence, the Navy routinely tacked on a 25 percent bonus of basic labor cost for employe commuting time between company headquarters and the Navy yard 13 miles down the Elizabeth River.
The 27 sequences eventually boosted the final bill to nearly six times Marine Hydraulics' estimate while extending the job two months.
"Obviously, there was a lot more work than what we thought," said Robert S. Walker, Marine Hydraulics' owner. Another executive said much of the extra work was linked to salt-water contamination of the Newport's hydraulic system during earlier repairs by the Navy.
It is unclear why the Navy allowed the company to underestimate the work so egregiously. Within only two days of winning the contract, Marine Hydraulics boarded the Newport and, simply by interviewing the ship's crew and Navy personnel, decided that the port propeller system was "completely inoperable," according to a letter Aug. 12 from the firm to SupShips.
Asked why SupShips did not conduct similar interviews and adjust the original contract accordingly, Navy officials cited diffusion of authority in ship repair.
Original specifications were drafted by a Navy lieutenant overseeing overhauls of Atlantic fleet tank carriers, such as the Newport. He passed them to SupShips Portsmouth's contracts award division. The contracts management section then took over, but onboard work was supervised by technicians from yet another office.
This is a familiar problem. In 1982, the General Accounting Office asked of Navy overhauls generally, "Who's in charge?"
Throughout the job, the Navy appears to have fretted more about time than money. Rather than formally estimating what each sequence should cost and then haggling with the contractor, SupShips authorities settled on a price through informal "deckplate negotiating" to avoid delays, according to documents from a government investigation. Navy officials denied there were improprieties.
Marine Hydraulics pocketed $109,000 when subcontracts wound up costing less than the Navy had agreed to pay. SupShips did not quibble, and Walker said the windfall was simply a lucky break in a chancy business. When Marine Hydraulics closed its books on the Newport, Vice President Gary R. Brandt said, "We made less than 10 percent profit on the whole job, less than normal."
"Let me put it this way," Walker added. "If I had 10 million bucks to invest, I sure wouldn't put it in the ship-repair business. It's a crap shoot." Going to the Cleaners
Among the hundreds of gray Navy ships slipping in and out of coastal dry docks every year for repair, the Newport was memorable for the magnitude of its overrun -- but hardly unusual.
In Seattle, for example, overhaul of the USS Henry B. Wilson was supposed to cost $33 million but became $49 million after 313 modifications. The USS Coronado needed $2 million in work after the job was supposedly finished. The USS Wabash, the Hector, the Flint and the Kiska all were problem-plagued.
Pyatt, the assistant Navy secretary, agreed that ship overhaul a few years ago "was an absolute disaster." The situation has improved, he said, partly because the Navy has forced out many of the incapable "bicycle shops" snatching business from more reputable yards.
The average price increase on major overhauls has been trimmed to about 25 percent, he added, with the Navy tempering its obsession with getting the ships back to sea at any cost.
"Operators love to run those ships around," Pyatt said. "We say, 'Well, there's no war going on. Is this really necessary?' "
Nevertheless, the Navy is "taken to the cleaners" periodically, he acknowledged, particularly when contracts must be awarded before a ship's innards are exposed.
"In a deal like that, there's so much open-and-inspect work -- that's the ideal case to get ripped off," he said. "I don't care whether it's your car, your house or your ship. Once you're in the shop, you're in the same situation." The Low Bidders Escape
As with other government agencies, the Navy finds it nearly impossible to find ways to penalize chronic low bidders.
"It is extremely difficult to throw out somebody on this contract because of his performance on the last contract," Pyatt said.
"We try every now and then, but my impression is that we usually lose."
With the ship-repair industry enfeebled by the decline of American commercial shipping and utterly reliant on Navy work, contractors and SupShips officials concur that pressure will increase on them to regain their health at government expense.
In Portsmouth, N.H., alone, the Navy last month had agreed to more than 4,300 sequences on 74 repair contracts.
"It is apparent that low-balling has been going on for the last several years in Navy ship-repair contracting," the House Appropriations subcommittee on defense concluded this spring. "Too often, the Navy is receiving poor quality work and even incomplete overhauls from firms who have bid too low to actually complete the work package."
Added Pyatt of the contractors, "Their strategy is to look for more change orders. Our strategy is going to have to be to make sure it's needed. It's going to be a waterfront control problem.