BAE Closes its Pearl Harbor Ship Repair Unit

Defense contractor BAE Systems is planning to end its ship repair operations at Pearl Harbor Naval Shipyard by 2021, cutting about 260 jobs. 

BAE operates an assigned area of the publicly-owned Pearl Harbor Naval Shipyard under a U.S. Navy "multi-ship multi-option" contract. The multi-year agreement covers nine front-line surface combatants. Going forward, the Navy is now shifting to a firm-fixed-price contracting model for commercial ship repair work, meant to attract more competition from smaller companies and to prevent project cost overruns. Under the new arrangement, smaller contracts will be reserved for smaller companies, leaving less work for big firms like BAE. Ultimately BAE opted not to bid for a renewal. 

BAE still has work through early 2021 in the form of a long maintenance availability for the destroyer USS Hopper. The job losses will be offset in part by new hiring activity at local ship repair contractors, which previously subcontracted to BAE but are now positioned to compete directly. 

BAE operates at Pearl Harbor Naval Shipyard's Dry Dock 4, which dates to the Second World War. It is the newest of the four docks at the yard, reflecting the general age of all of the Navy's public shipyards. The service is now in the early stages of planning to add a new, modern drydock at Pearl Harbor - either a graving dock or a floating drydock. According to Navy Times, the push to add capacity is driven in part by the space requirements for maintaining and modernizing Virginia-class attack submarines.