Pentagon report attacks BIW management

Employees at Bath Iron Works watch from an upper deck on an Aegis destroyer in 2009.
AP Photo/Robert F. Bukaty, file
Employees at Bath Iron Works watch from an upper deck on an Aegis destroyer in 2009.
Posted Sept. 23, 2011, at 7:48 p.m.
Last modified Sept. 24, 2011, at 6:36 a.m.

BATH, Maine — Bath Iron Works is one of four shipyards blasted for what are described as serious management deficiencies in new Defense Department assessments, according to a report published this week by Inside the Pentagon.

But a spokesman for BIW pointed to the shipyard’s performance besting Navy cost targets for its signature product, the DDG-51 Arleigh Burke class destroyer, and a top industry analyst defended the Maine company’s track record in the face of the Pentagon demerits.

“The notion that BIW is underperforming is belied by everything the Navy has said over the past decade,” said Loren Thompson, chief operating officer and defense analyst for Virginia-based think tank the Lexington Institute. “Anybody who says there’s a problem at Bath should ask the question: Where in America is there a naval shipyard performing better?”

According to the defense publication Inside the Pentagon, BIW was discovered this summer to be violating 17 of the 32 Earned Value Management System standards used to evaluate the performance of defense contractors, a jump from nine violations reported the previous year. The system’s benchmarks are used by the military to track contractors’ ability to meet Defense Department cost and schedule expectations.

Other shipyards similarly scolded were Huntington-Ingalls Industries shipyards in Newport News, Va., and Pascagoula, Miss., as well as submarine manufacturer Electric Boat in Groton, Conn., which like BIW is a General Dynamics Corp. subsidiary.

Jim DeMartini, spokesman for Bath Iron Works, told the Bangor Daily News late Friday that the shipyard is trading information on the Earned Value Management program with the Navy and Defense Contract Management Agency, which oversees program compliance, in an effort to “clarify those areas in which additional focus is required.”

DeMartini said that BIW, according to other significant metrics, is performing well for the Defense Department.

“We remain confident that the EVMS in place at BIW is a strong management tool and provides excellent visibility into cost and schedule performance, as evidenced by the fact that we are delivering DDG-51 class ships below the target cost,” he said in a statement. “We have a robust EVMS that is used throughout the company by all levels of management. We have demonstrated the effectiveness of our system repeatedly and we look forward to working with the Navy and [Defense Contract Management Agency] to address the formal corrective action request that details areas where we can increase our compliance.”

Thompson shook off the new assessment’s finding of fault with BIW, in particular, as not based in the “real world.”

“We already knew there were significant management issues at Ingalls [in Pascagoula],” Thompson said when reached by the Bangor Daily News Friday night. “The Navy has been complaining about Ingalls’ [performance and management] for years. But there’s very little public comment by the Navy about deficiencies at Bath Iron Works out there.

The EVMS evaluation “sounds more to me like an academic assessment than a real-world evaluation of how the shipyard is performing,” he continued. “Every couple of years, some new approach to acquisition sweeps the Pentagon, and they review how their contractors are performing. … But by [the real-world] standard, Bath is the best.”

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