BY MAUREEN N. MARATITA
The ship repair industry on Guam has long been a balancing act between military bean counting of operational costs and the need for mission-ready operations that can repair ships in the middle of the Pacific.
Through the years, different strategies have seesawed federal policy to ship repair and affected the industry on island.
Recently, the U.S. Navy changed its Guam plans again.
Companies working in the ship repair industry had most recently done business on assigned federal and local property.
Guam Industrial Services Inc., which does business as Guam Shipyard, held the former Navy Ship Repair Facility property in Apra Harbor through a sublease from the Guam Economic Development Authority from 1997 to 2012.
Guam Shipyard now owns a property in Santa Rita that Mathews Pothen, president of Guam Shipyard, told the Journal can provide an intermediate maintenance repair capability.
“It’s a 10,000 square foot facility with machinery and another 10,000 square feet in warehouse space,” he said. The company has owned the property for the last four years.
“That’s where Guam Shipyard transitioned from the Naval Base,” Pothen said. “We have approximately 80 employees there.”
The property is not water front. “It does limit depot level ship repair capabilities,” Pothen said. He said repair work can still be done pier side.
Guam Shipyard had depot level repair capability with the dry dock, he said. Depot level capability requires three components, he said, those being the dry dock, relevant machinery and trained employees.
Cabras Marine Corp. entered the ship repair market in May 2012 with the opening of a waterfront commercial yard at the Jose D. Leon Guerrero Port of Guam in 2012.
It was awarded the Military Sealift Command ship repair facility contract in October 2013 to operate on the SRF property and does business there as the Pacific Dry-Dock and Integrated Maintenance Ship Repair Facility. The $77 million contract was for a one-year base period with four additional one-year options.
On April 8, 2014, the Pacific Dry-Dock and Integrated Maintenance Ship Repair Facility opened at the former SRF facility with about 220 employees, according to Journal files. By 2015 PACDIM had some 70 apprentices. PACDIM is a subsidiary of Cabras Marine.
Navy officials underlined the importance of the facility and the forward capability for ship repair at the grand opening.
That contract will end Sept. 30.
The Military Sealift Command researched then put out an RFP for multiple companies to work on ship repairs.
On April 29, the MSC awarded Cabras, Guam Shipyard and Seafix Inc. a combined indefinite delivery/indefinite quantity one-year base contract for up to $18.09 million to provide ship repair services to the MSC, the Navy and the Coast Guard. The contract is for pier-side repairs and if all four options are exercised is worth $96.07 million. Each company is “guaranteed a minimum of $3,500” in the first year of the award.
The contract is different in one respect.
Joseph L. Cruz, president of Cabras, said, “Under the new contract, every bidder who bids has to provide their own facility. Essentially we’re awarded that because we have our own facility to do repairs.”
As to the work, Cruz says, “Most of the repairs are what they call afloat repairs,” meaning it can be performed pier side or on the water rather than in a dry dock.
That suits Cabras. Cruz said, “Our whole focus in Guam is afloat repairs.”
The work is lucrative, he said, with the market in the last four years worth some $50 million to $60 million in afloat repairs, he said.
“Next year alone there’s estimated about $30 million worth of work,” Cruz said. “Guam is like a garage for them for quick repairs.”
In the last 36 months PACDIM SRF has had $8 million to $10 million in work. “It’s not mind-blowing, but it helps to fill the gaps,” he said. The work is significant, he said. “It’s grown to that, receipt-wise. Our core business is tugs and barges, but it’s been viable to continue.”
Cabras will remain in the ship repair market, Cruz said.
“We’re bullish about ship repair, but we’re very cautious,” he said. “The business is sustainable and worth competing for. We’re confident about our abilities and the quality work we deliver.”
Cabras is concentrating on developing a workforce and their skills. The four submarines homeported with Submarine Squadron 15 also require maintenance, Cruz said. “We’ve done submarine work; we do the non-certified submarine work.” mbj