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Navy prepares cuts in projects and jobs as funding falls short

The Navy said it plans to cut some temporary workers in Hawaii in the spring, cancel a $35 million repair job on a Pearl Harbor destroyer and reduce base support and modernization by $75 million as part of at least $110 million in savings it says it needs to reach in Hawaii alone due to a federal budget shortfall.

Nationwide cuts were announced last week by Adm. Jonathan Greenert, chief of naval operations, and include laying off 1,121 temporary workers in the third and fourth quarters to save $30 million; freezing civilian hiring to save $70 million; and deferring "new start" research and development to save $263 million.

Virginia would be hit with at least $1.4 billion in cuts, according to the Navy. California would see a $681 million reduction in spending, and the Pacific Northwest is scheduled for at least a $339 million impact, among the cutbacks.

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Late last week the Navy was still determining where the 1,121 layoffs of temporary workers would occur.

That's not even addressing possible "sequestration" cuts made necessary by the so-called "fiscal cliff" the nation faces unless Congress acts by March 1. The Navy predicts that would result in furloughs for most civilian employees for 22 days through September.

"(The) Navy is facing budget shortfalls today because we are funded under a continuing resolution," Greenert said in a memo released Friday. "Unless Congress legislates changes, we may have significant additional budget reductions starting in March because of sequestration."

Without a 2013 appropriation, the military has been operating at 2012 base budget levels under a continuing resolution.

"These levels are inadequate for tour needs in FY13, falling $3.2 billion short of our planned (operations and maintenance) budget," Greenert said in a separate letter Thursday to Navy flag officers and senior executives.

The outlined cuts are partly aimed at pressuring Congress.

Due to another $1.4 billion of "unplanned growth," operating under a continuing resolution for the remainder of the fiscal year, which runs through September, would put the Navy $4.6 billion below funding requirements, Greenert said.

The Navy is making cuts "starting now, to ensure we can fund ongoing deployments and other mission-critical activities," Greenert added. The other military services are taking similar steps.

Cancellation of the $35 million repair job to the Pearl Harbor destroyer USS Chafee would mean a loss of work for the private shipyard workforce on Oahu and its supply chain, said Iain Wood, president of the Ship Repair Association of Hawaii and chief operations officer with Pacific Shipyards International.

"We're obviously very concerned as an industry," Wood said.

The Navy specified cutting the Chafee work, but other jobs could take a hit.

"It could mean more than just that big repair availability," Wood said. "There could other small jobs (lost)."

Pacific Shipyards also manages the inactive or "mothball" fleet, which could be affected as well.

According to Greenert's Thursday message, obtained by Defense News, the Navy's plans service-wide include:

  • Canceling the majority of surface ship repairs at private shipyards between April and September, affecting 30 of the Navy's 187 surface ships. About 90 percent of Pearl Harbor shipyard's efforts are directed at submarine work, and private contractor BAE Systems Hawaii Shipyards performs surface ship jobs using an on-island workforce of about 750.
  • Terminating temporary employees. The Navy already has a hiring freeze. "This will reduce our shipyard work force by more than 3,000 — almost 10 percent of the workforce, mostly in shipyards and base operating support," Greenert said.
  • Reducing spending on base operating support and cancellation of repairs and modernization of nearly all piers, runways, buildings and other facilities through September.
  • Reducing overhead by cutting IT support, cancelling conferences that are not mission-essential and "severely" limiting travel.

The reductions are intended to be reversible and will continue until a spending bill is passed or the Navy receives authority from Congress to reprogram money from investment accounts, Greenert said.

If sequestration comes March 1, Greenert said, the Navy will have an additional $4 billion operations and maintenance reduction for 2013 that could require "more aggressive actions," including:

  • Stopping nearly all training and exercises, except for forces on deployment. That would affect readiness, ultimately preventing carrier strike groups and amphibious ready groups from deploying.
  • Further reducing deployed operations in the Pacific and Middle East.

Greenert said the steps outlined come at a price.

"Much like putting off an oil change because you can't afford the $20 service, we save in the short term but shorten the car's life and add to the backlog of work for later," he said.

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