Ship repairers brace for Navy contract cancelations

Capitol dome daylightFEBRUARY 15, 2013 — Shipyard workers are going to be among the first to feel the impact of Congressional failure to deal with budget issues. Yards specializing in Navy work were expecting to be notified today of cancelations of maintenance availabilities.

Under the sequestration mechanism set to kick in under the Budgetary Control Act of 2011, as of March 1, services are set to begin canceling Navy ship maintenance work for the third and fourth quarters of the year. It is estimated that about 25 ships will be affected.

Shipyards specializing in Navy work will, in fact, be hit even before March 1. According to the Virginia Ship Repair Association, the Department of the Navy, in a guidance provided earlier this month directed the cancelation of all third and fourth quarter maintenance availabilities for Fiscal Year 2013 on February 15 if a budget is not approved and further measures of relief of sequestration is not provided.

In the Hampton Roads region alone, the cancelation of expected ship repair availabilities would impact an estimated 10,000 personnel with lay-offs or releases, with a corresponding economic impact of $700 million in wages, according to the Virginia Ship Repair Association.

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