phased maintenance: a contractor's point of view

CHRISTOPHER LEWIS

Phased Maintenance: A Contractor’s Point of View

THE AUTHOR

enlisted in the United States Navy in June of 1963 and was ap- pointed to the Warrant Officer Program in 1971. He served as the main propulsion assistant on the USS Ponchatoula (AO-148) and a battalion commander and testing officer at Recruit Training Command, Great Lakes, Illinois. Commis- sioned as a limited duty officer in 1976, he served as the engineer officer on the USS Flint (AE-32); assistant material officer for AEs on the staff of commander, Service Group One and then as the engineer officer on USS Camden (AOE-2). He re- tired from the Navy in 1983. He has attended the University of Wisconsin, University of Hawaii, Southern Illinois University, Indian Valley College (Novato, California), and Solano Col- lege (Suisun, California) and has taken several extension courses through Chapman College. He is a member of the American Society of Naval Engineers, Society of Naval Archi- tects and Marine Engineers and the Propeller Club of the United States. He is currently employed as the corporate direc- tor of planning for Southwest Marine Incorporated.

ABSTRACT

The Phased Maintenance Program (PMP) was conceived from the Navy’s desire to increase its ships’ “on line” time which is severely interrupted during the six-to-nine-month regular overhaul (ROH) or nine-to-twelve-month complex overhaul (COH) cycles. While improved on line time for ships is desirable and attainable, the maintenance requirements remain and must be accommodated. In order to meet the operational and maintenance objectives, the Phased Maintenance Program was developed to provide for two-to- three-month maintenance availabilities every fifteen to eighteen months. Thus major repairs could be effected, the Navy’s modernization program could proceed with minimum delay and non-scheduled maintenance requirements would be accommodated.

While the Phased Maintenance Program affords the government several advantages such as reduced maintenance costs and the opportunity to define maintenance requirements based on actual ship material condition, it also affords private contractors certain advantages. These advantages are beneficial not only to the contractor but also to his customer. This paper will discuss how a private contractor, currently involved in the Navy’s Phased Maintenance Program, perceives its role both as a private contractor and a team player within the program.

72 Naval Engineers Journal, March 1990

This discussion will address some of the unique challenges encountered and met within the Phased Maintenance Program parameters.

INTRODUCTION

I t is generally recognized that the United States Navy, in its continual battle to maintain fleet readiness, has experienced difficulty in surrounding the seemingly end- less spiral of fleet maintenance problems in terms of down-time, costs, quality workmanship, material control and contract strategy [l], [2]. The private sector ship repair industry also has experienced a great deal of difficulty grasping for a methodology that would com- plement those efforts; the absence of which spells lost profits for the contractor and added frustration for the customer.

In ship repair, as with most other businesses, profitability has to be the main objective. In order to attain an acceptable degree of profitability and remain in the marketplace, economical, straightforward management techniques and processes must be employed to acquire and retain business. Return business in most industries becomes more probable when customers are satisfied that they have received quality workmanship at a fair price. However, within the framework of the contract- ing strategies employed by the government, business, more often than not, goes to the contractor with the low- est bid. Maintaining high quality workmanship, good schedule management techniques and cost controls are not always the deciding factors for awarding or not awarding subsequent contracts.

Therefore, in order to remain competitive within the current maintenance programs, contractors are often forced to capitalize on their customers’ less than timely advance planning efforts. The combination of the customers’ vulnerability and the contractors’ bid strategy ultimately cause both parties to spend a great deal of time and money in attempting to settle contractual claims. In the end, after months or years of litigation, the customer usually pays most of the costs with the contractor paying

LEWIS PHASED MAINTENANCE

a great deal to retrieve them. It is a “no win” situation and a less than ideal business environment.

However, while performing within a Phased Mainte- nance Program administered under a “cost plus” contract (as the original phased maintenance concept intended), the contractbr is compensated financially for his total effort. He is further rewarded through the performance fee evaluation process. As a result, the contractor has significantly more incentive to strive for optimum quality and efficiency. To achieve this level of quality and efficiency, contractors have implemented more frequent and detailed in-proceess inspection proce- dures as well as viable advanced planning and on-site engineering/liaison techniques. Also, cost and schedule control have become a lifestyle. The utilization of the aforementioned techniques, together with the teamwork engendered by the PMP itself, has resulted in greater efficiency, better quality, enhanced contractor profitability and customer satisfaction.

Several years ago, purportedly under pressure to increase competition and lower costs, the U.S. Navy be- gan to employ a variation of the established phased maintenance concept. Along with phased maintenance under the “cost plus” contract vehicle, we are now ex- periencing phased maintenance fixed price availabilities (PMF) and phased maintenance fixed price availabilities with drydockings (DPMF). A PMF is actually little more than a selected restricted availability (SRA) with a performance fee. Each PMF is bid separately to increase competition and lower costs.

In reality, what happens within the PMF philosophy is that the advance planning is accomplished by a government planning yard, more often than not remote- ly located from the ship’s home port. Due to the bureau- cracy inherent in this environment, the planning effort takes place too far in advance to accurately reflect the ship’s repair requirements just prior to the availability start date. The shipcheck reports fail to accurately detail the required repairs, and contract award takes place about four weeks before the availability start date, leaving little time for the successful bidder to plan the production effort. The contractor is then forced to address government furnished information (GFI) deficien- cies, wrestle with long lead time material (LLTM) with a short lead time, and submit inspection deficiency reports (IDRs) for those repairs not addressed within the specifications. During this time, the contractor waits for a response to the reported GFI and IDR problems while watching his production effort slip, milestones fall by the wayside and his performance fee disappear.

In these types of maintenance programs, the contractor has little or no input to the advance planning effort and is forced to work with government supplied information and material while being held to the same performance appraisal criteria as in a true phased maintenance contract. The result is a frustrated contractor who often resorts to litigation to recover fair costs (forget profit) and a highly pressured SupShip pushing the contractor to perform to impossible standards while striving for an elusive performance fee. Meanwhile, the ultimate customer, ship’s force, needlessly is forced to

endure a maintenance availability where equiment is re- paired that did not necessarily require repair while some necessary repairs were, in all likelihood, neglected. These are the very problems associated with former maintenance programs that Dhased maintenance. in its - - original form, has successfuliy

PMF, DPMF, SRA, DSRA Programs

Competitive bidding process for each availability fosters unstable manpower loading

Forces contractor to react instead of respond

Outdated condition assess- * merits yield production delays, increased costs and customer dissatisfaction

No continuity of expertise, efficiency, vessel familiarity or communication

minimized.

True Phased Maintenance Program

Multi-year contract offers vehicle for more stable manpower loading

Allows Contractor to plan and anticipate

Near real-time condition assessments yield accurate repair requirements: Realistic cost estimates minimize customer concerns

Multi-vessel contract provides continuity to enable customer to standardize resources, pro- cedures and communication techniques.

In the end, the only thing gained by the introduction of the PMF variation of the PMP philosophy is increased competition; the importance of which is ques- tionable in view of the costs, quality of work, mission readiness and day-to-day working relationships sacri- ficed to achieve it.

Phased maintenance can be performed within any number of scenarios and contract vehicles. However, the services such as advance planning, engineering and other forms of contractor support utilized in the original Phased Maintenance Program must remain in- tact. Kenneth s. Jacobs, the NavSea Phased Mainte- nance Program Manager, has stated that PMF, in its present form, does not provide the Navy with the same combined quality, well planned and timely maintenance program as the original Phased Maintenance Program does.

THE SHIFTING OF ROLES

The advance planning function formerly performed by the government was one of the most significant responsibilities assumed by the private contractor at the inception of the Phased Maintenance Program. The contractor has become responsible, under the cognizance of the SupShip, for most advance planning evolu- tions including the development and revision of supple- mental alteration drawings (SADs); predominantly in the ammunition oiler replenishment ship (AOR) PMP. This requires the initial effort of obtaining government furnished information (GFI) such as ship alteration records (SARs), basic alteration class drawings (BACDs) and ship alteration material lists (SAMIS). It requires performing drawing shipchecks, submitting shipcheck reports and preparing drawing schedules. The contractor is then responsible for the preparation of the


PHASED MAINTENANCE LEWIS

specifications for modernization and repair work. This pre-arrival effort requires a great deal of research, com- petence and experience in the various technical disci- plines. Additioiially, throughout any given phased maintenance availability (PMA), the contractor has become responsible for:

Resolving problems found in technical documentation Updating and revising technical manuals and appli-

Updating the coordinated shipboard allowance list

Providing provisioning technical documentation

cable ships selected records (SSRs)

(COSAL)

(PTD)

While the aforementioned tasks are not necessarily foreign to a ship repair contractor, the shifting of roles and greater responsibility in some of these areas are. The contractor is now much more involved with the total job, from planning to documentation, and has to accept responsibilities in these areas. If the specifications or drawings are deficient, the contractor is accountable not only for the deficiency, but also for its timely resolution. If, on the other hand, they accurately reflect the requirements and are “user friendly,” the contractor can perform more efficiently and professionally, thereby reducing costs and expediting the job; a significant benefit to all concerned.

ADVANCE PLANNING

Prior to the inception of the Phased Maintenance Program, contractors had to rely on the advance planning efforts put forth by the customer, the U.S. Navy. Within the Navy’s maintenance structure are the PERAs, NavSea, planning yards, local Supships, type commanders, and the ships themselves. The combined effort in planning for a typical overhaul program required months of work and, due to the dynamics of time, numerous changes had to be incorporated throughout the planning cycle. Along with the change in requirements or scope were the changes in corporate memory due to personnel rotation, funding policies, and organizational restructuring. Additionally, due to the necessary lead time for the planning stage, the true material condition of a ship was seldom accurately reflected in the work package because conditions changed when the ships force and other intermediate maintenance activities performed maintenance within months of a scheduled availability.

The overall impact, resulting from the above advance planning scenario was that, more often than not, the contractor was awarded a work package that was not as accurately defined as it should have been; leaving both the Navy and the contractor vulnerable to misinterpre- tation, time delays and additional costs. Because of this, the contractor could not effectively plan and execute the contract in a cost effective and business-like manner.

As the Phased Maintenance Program emerged, the contractor became an active player in nearly all aspects of the maintenance cycle from advance planning through final documentation. Communication, a key ingredient


which is sorely lacking in other maintenance contracts, is a reality in the Phased Maintenance Program. The working relationship between the contractor’s management and production groups has been enhanced as well as the prime contractor/sub contractor working relationships. And, because phased maintenance provides for the exercising of planning options, the Naval Sea Systems Command, type commander and SupShip work with the contractor throughout the advance planning stages of a typical availability. Additionally, the port engineer has become a valuable asset to all players in the program. As the type commander’s representative, the port engineer carries the responsibility for defining phased maintenance availability repair packages for a given number of ships assigned under the Phased Maintenance Program. Because of his tenure with the type commander, this individual offers the added benefit of corporate memory and continuity to all parties. This is of particular significance to the contractor who is in a position to profit from and contribute to this corporate memory. Together, the port engineer and contractor can establish and maintain good dialogue throughout the life of the contract. This is viewed by the contractor as an enhancement that saves numerous hours which were formerly expended in an attempt to define the true scope of work and determine the customer’s requirements. Spe- cifically, within other maintenance programs, the contractor seldom has the opportunity to gain meaningful insight into a project earlier than 90 days (A-90) prior to the start of the production effort. Consequently, as the customer and successful contractor are building their re- spective project management strategies, each is trying to ascertain the true scope of the project. The contractor at- tempts to get long lead time material (LLTM) identified and ordered, determine prefabrication requirements and solve numerous other problems that are obscured in poorly defined specifications, drawings and other forms of technical data. Trying to achieve an accurate plan within this scenario detracts from and delays the efforts of both the contractor and customer in achieving a viable and productive effort. The problem has been exacerbated oftentimes by the inability to conduct timely shipchecks due to ship operating schedules. In many instances, if shipchecks are conducted, the individual who originally defined the work requirement is no longer onboard resulting in the loss of shipboard corporate knowledge. With the advent of phased maintenance, a great number of these types of problems have been minimized due to the presence of the port engineer and his relationship with the contractor and SupShip. Now long lead time material is identified earlier and more accurately, material problems are resolved earlier and shipchecks are done in a timely cost effective manner with the entire plan prepared and finalized well in advance of the availability. Problems are discussed and resolved at regularly scheduled meetings attended by the supervisor, port engineer and contractor during this period. Therefore, in a typical PMA, the arrival of the ship is viewed as nothing more than another milestone in the schedule. The momentum generated throughout the advance planning stages carries through to the departure

LEWIS PHASED MAINTENANCE

of the ship. Oftentimes preliminary planning and shipchecking for the next regularly scheduled availability for a particular ship can commence while it is in the contractor’s yard undergoing repairs in a current phased maintenance avai1abilit.y.

How does all this benefit a contractor? First, one must assume that most contractor personnel are capable, conscientious and desire to perform well. Assuming that, one can see that in a true Phased Maintenance Program a contractor can perform much better at a reasonable cost since he does not have to contend with obstacles that waste time and cost money, namely:

Poor GFI (he prepares his own) Labor skill shortages (long-term contracts ensure a

Material (can be ordered in ship sets, ordered early

Expertise (learning curve improved through repeti-

stable work force)

and warehoused, etc.)

tion)

A contractor can do what he does best; repair ships while adhering to sound business practices. While there are incentives offered by the customer for the contractor to perform better, the satisfaction derived from the un- encumbered ability to complete a job on time, within budget and with good quality workmanship is also a very significant incentive for most contractors.

MODERNIZATION

Phased maintenance has not diminished the requirement to modernize ships. In fact, modernizing ships continues to play a major role in the maintenance cycle of any ship within the Phased Maintenance Program. A major consideration in developing the phased maintenance philosophy was the Navy’s Fleet Modernization Program (FMP). Always a challenge, the modernization of a United States Navy ship has been and remains a complex and critical aspect in extending its useful life. Modernization requires years of engineering and planning in order to accomplish the objectives associated with the FMP. From programing to installation, a typical alteration requires scheduling, financing, support and follow-up. Modernization within the Phased Main- tenance Program dictates that some major alterations must be installed on an incremental basis. Therefore, the phased maintenance contractor has become involved with the development of ship alterations as well as their installation. There are significant advantages to the contractor for participating in this function. He has the opportunity to become intimately involved with the engineering phases including, in some instances, drawing development. He is involved in the process of verifying drawings, recommending changes, identifying and pro- curing material and resolving problems both in the planning and production phases. He is enabled to more clearly define the scope of work for the production effort.

The modernization effort is also enhanced by the working relationship between the port engineer, the supervisor and the contractor. There is much less confu-

sion and frustration due to enhanced communication between a minimum number of players. The final result is that in most cases a typical ship alteration is pro- grammed, financed, engineered and installed accurately, on time and within budget.

Another positive aspect of the Modernization Pro- gram within the Phased Maintenance Program is the multi-ship, multi-year concept which permits the contractor to capitalize on his progressively improved ship class experience while planning for and installing ship alterations. Combining his knowledge and corporate memory with that of the port engineer, the contractor can, with minor exceptions, apply the majority of his planning and engineering efforts on only one of the ships within the contract. For follow-on installations the planning and engineering effort becomes routine so far as making minor corrections or changes that may be pe- culiar to each of the ships. Likewise, the preparation of the ship alteration specification for follow-on ships is also a simplified task. The bottom line is that the learning curve can be dramatically improved in the modernization of ships within the Phased Maintenance Pro- gram. Here again, all concerned benefit in terms of reduced costs, improved workmanship and timely installation.

ENHANCEMENTS

Participating in the AOR Phased Maintenance Pro- gram has allowed the author’s employer to analyze and refine planning and production techniques in order to provide optimum quality and timely repairs for the customer while minimizing cost exposure and maintaining profitability. As an example, we examined the benefits of utilizing outside engineering expertise for the advance planning effort. At the outset of the program, we utilized a well respected engineering firm to provide that support. Soon recognizing that in this situation significant control of the total product and costs were lost, we reassessed the value of maintaining an in-house engi- neeriing staff. We decided to utilize contracted technical engineering personnel under the cognizance of an experienced in-house marine engineer. This allows us to maintain total control over the product and reduce costs without having to maintain a level loaded engineering staff. Another enhancement was the utilization of shipboard progressmen whose sole function is to provide an unbiased assessment of the production effort. This led not only to increased credibility of the production assessment, but also the identification and recommenda- tion for more time saving production techniques. These are just two examples of how we were able to increase the efficiency of the program through innovation; innovation promoted within the framework of the original Phased Maintenance Program concept (not the PMF variety).

Being innovative and creative in the true Phased Maintenance Program also means taking the opportunity to team with the customer for improving productiv- ity, costs and management. For an example, why not al- low the phased maintenance contractor to have continu-


PHASED MAINTENANCE LEWIS

ous access to the latest ship generated automated work requests (AWRs)? Having this information on a contin- uing basis would support a stateside “WestPac Work Package” concept, similar to the type currently used for deployed Pacific Fleet Ships. When a ship comes into port at any given time, a current work package could be available. This package would be authorized by the port engineer and supervisor, materials could be available and the package priced. For most common repairs, thirty days notice is usually all that is required. Cur- rently, the author’s firm is working with several editions of a ship’s authorized repair package (SARP) which are produced from the automated work request data base. This is redundant, time consuming and very costly. Throughout the eighteen-month pre-arrival period PERA (planning and engineering for repairs and alterations) reviews the repair and alteration requirements (at least twice), performs shipchecks, reproduces updated editions of the SARP and issues them to the contractor. The contractor conducts another shipcheck, seeks clarifi- cation from the PERA and then proceeds to write the specifications. Another possibility suggested several years ago is why impose a full blown and costly test memorandum in a specification that only requires a minor repair? Couldn’t an operational test in accordance with a maintenance requirement card (MRC) suffice? For example, if minor repairs are accomplished to the mechanical side of a ship service turbo generator (i.e. throttle linkage, bearings, etc.), why is it necessary to accomplish a full load test on the generator and switch- gear? The MRC calls for a routine operational test usually on a monthly basis or more frequently. This certainly is more cost effective and much less time consuming.

Still another cost saving suggestion made several years ago and currently implemented in two of our three yards is the use of a more realistic specification format which employs much of the U.S. naval shipyard work- order format. It allows for more specific direction to the worker and, when properly utilized, serves as the data input for the contractor’s Management Information Systems (MIS). This data generally consists of manpower requirements and s t ads top dates, trade assignments, etc. This information is delineated in each paragraph within the specification and serves as a sequential ap- proach to accomplishing any given task. It breaks down alterations and thoroughly explains the steps involved to accomplish them. This saves the trades from having to retrieve this same data from the prints and other GFI thereby freeing them to accomplish productive work.

CONCLUSION

Throughout the life of a typical phased maintenance contract the contractor plays a significant role in the planning, preparation, and execution of each availability. The effects of PMP induced teamwork between the supervisors, type commanders, planning yards, ships and the contractors are many and mostly positive. There

are several additional features of the Phased Mainte- nance Program that permit, indeed encourage, the par- ticipants to be innovative and creative. This encourage- ment stems from the reduction of the mountains of bu- reaucratic red tape inherent in other maintenance programs. If changes are required in terms of growth or new work they are promulgated within a few days or, in many cases, hours. Material is more accurately identified, requisitioned and staged prior to arrival of the ship. The production effort is significantly enhanced since the contractor is basically executing his plan, resolving his problems and reaping either the success or failure of his efforts. The undeniable end result has been improvement; improvement in quality; improvement in performance; improvement in customer satisfaction and improvement in profit.

The key to enhancement is communication. The phased maintenance concept, by its very nature, pro- motes communication. Lessons learned by both the contractor and the customer should continue to be discussed and incorporated into present and future programs.

Finally, while there is a movement in reverse (i.e. to- wards the former maintenance programs) with the contractors being tasked with fewer and fewer planning, engineering and other pre-arrival responsibilities, one must examine the logic and rationale that conceived the Phased Maintenance Program in the beginning. Because of phased maintenance in its intended form, the Navy is beginning to achieve its goals. “On line” time has increased due to shortened repair availabilities; shipboard systems are better maintained since repairs can be accomplished without the delays inherent in the development of government furnished information along with the competitive bidding process associated with every availability. It follows then, that if a ship’s crew is not forced to endure a year-long yard period and has maxi- mum use of equipment needed to perform its job, as well as the time to train, both morale and performance can only improve.

Although assessing cost differences between the various maintenance programs is difficult, it is obvious that the cost reporting requirements imposed within the original Phased Maintenance Program provide both government and contractor management with better visibility of incurred costs including the true associated costs of advance planning, engineering and production.

REFERENCES

[ l ] Joest, Fred, “Navy’s AFS Phased Maintenance Program: A Maintenance Story,” Naval Engineers Journal, Vol. 95,

[2] Todd, Jim, Cdr., USN, “Phased Maintenance,” Naval

[3] Hekman, Peter M., VAdm., USN, “Feature Interview,”

NO. 3, pp. 156-164.

Engineers Journal, Vol. 97, No. 6, pp. 55-68.

Naval Engineers Journal, Vol. 101, No. 5, p. 22.


phased maintenance: a contractor's point of view

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