HONOLULU (AP) — New U.S. Navy contracting terms have resulted in a pullout by a major contractor that is expected to result in the loss of hundreds of jobs at Pearl Harbor Naval Shipyard, officials said.
BAE Systems PLC will no longer perform Navy surface ship repair at Pearl Harbor, eliminating about 325 jobs, The Honolulu Star-Advertiser reported.
The Navy contracts with private shipyards and other firms for maintenance on non-nuclear surface ships.
The multinational security, aerospace and ship repair firm was the prime contractor for repair projects through which subcontractor surface ship work was funneled.
BAE announced a five-year multi-ship, multi-option contract in 2014 for modernization and maintenance on nine destroyers and cruisers at Pearl Harbor. But multi-ship, multi-option contracts using cost-reimbursement have been replaced nationally by a Navy strategy called “multiple award contract-multi order,” officials said.
The new system uses firm-fixed-price contracts that do no allow adjustments for cost overruns, officials said.
BAE cannot bid on smaller, $1 million to $2 million contracts under the new Navy format, but can seek major ship projects that can be $50 million to $100 million, officials said.