The Mobile County Commission unanimously approved $1 million to assist with a vessel completion yard expansion project at Austal USA during a Nov. 24 meeting — another joint effort in what county officials consider to be “the epitome of a public-private partnership.”
“We are expanding the vessel completion yard to create additional ship parking space (berths) and services to accommodate our current needs as well as anticipated future growth opportunities,” Austal officials said in a statement to Lagniappe.
During a conference meeting last week, the members of the commission discussed the contribution, which is expected to be matched by $1 million from the city of Mobile during the Nov. 25 city council meeting. It was also reported by County Attorney Jay Ross that the state of Alabama would be contributing $12.5 million to the project as well.
“We estimate the total expenditure for the (project) to be in the range of $70 million when complete,” Austal officials said in a statement. “We don’t discuss financial arrangements or funding sources publicly because of the competitive nature of shipbuilding.”
Brain Leathers, senior vice president and chief financial officer at Austal USA, was able to give some insight into the project during last weeks’ commission conference.
“Within the next year, we’ll have five ships in the water — possibly six after that,” he said. “We’re running out of parking places. An additional berth for vessels is desperately needed.”
Leathers said Austal needs the additional capacity in order to maintain its schedule.
“If we don’t maintain schedule, it places contracts into a situation where we’re not performing, and we want to maintain our performance,” Leathers said. “A lot of that can affect employment.”
Austal claims 4,200 workers in the Mobile Bay area, but Leathers said when employees from additional groups like General Dynamics and Navy uniform personnel are considered, the number of total jobs is closer to 4,500.
According to Leathers, the impact of the employment at Austal causes a ripple effect on the local economy that sustains more than 14,000 jobs. The County Commission has put $6 million towards Austal’s growth and development since 2005.
Still, Austal’s request for assistance with the $70 million project came at end of a year that brought the longevity of one of the shipbuilder’s main Naval contracts into question.
Austal is one of two companies manufacturing the Littoral Combat Ships (LCS) used by the U.S. Navy. The Navy’s shipbuilding plan had scheduled the production of 50 LCS’ by the year 2020, but in early 2014, Secretary of Defense Chuck Hagel put a halt on contract negotiations after 32 to evaluate the future of the LCS program.
However, Austal USA President Craig Perciavalle told Lagniappe in March that the pause in contract negotiations is only to make sure the Navy is happy with the LCS in the long term.
Perciavalle said then that even if Austal “only received half of the remaining ship contracts” before the pause after 32, it would still “be delivering ships through 2022.”
Leathers thanked the commissioners for their continued support and said Austal’s growth wouldn’t be possible without the partnership.
“In May of 2004 — when we began working with the city, county and state — we had a shed, a double-wide, a dirt parking lot and 113 employees,” he said. “This truly is a success story.”
Commission approves emergency repairs at Government Plaza
Commissioners were forced to take action during a conference meeting due to a failure of Government Plaza’s backup generator — which Assistant County Engineer Bryan Kegley said “could endanger the lives of people working and conducting business there.”
Kegley said the existing backup generator, located in the building’s basement, isn’t properly functioning and is in a state of disrepair. He said its failure could prevent elevators, smoke evacuations and lighting in the stairwells from functioning properly if power to the building was lost.
The request was made a day after nearly 3,000 Alabama Power customers lost electricity in the downtown area for a few hours.
Kegley said the county was fortunate the power in Government Plaza wasn’t affected.
“If we had lost power with the generator being in the disrepair that it is, I believe it would have tried to kick on and it would have started running without lubrication,” he said. “If that had happened, it probably would have destroyed itself.”
The county took three actions related to the generator, including declaring the situation as an emergency.
According to a provision of Alabama’s bid law, the declaration allows the county’s engineering department to handle the repairs without advertising for competitive bidding.
At the request of the engineering department, the county also agreed to lease a 1,500 kilowatt generator for an amount not to exceed $18,650 monthly for as long as it takes to repair the existing generator.A connection fee of $3,800 was also included in the motion.
County Engineer Joe Ruffer told commissioners the figure was an estimate received from Thompson Tractor Company, and said the department didn’t yet know from what company they would actually lease a temporary generator.
“We will know once you authorize it,” Ruffer said. “We will take what we call telephone bids. We’ll call up two or three companies and select the low vendor.”
At the request of the engineering department, commissioners also authorized a “sole-source” (no bid) contract with Thompson Tractor Company for the “purchase of parts and the provision of repair services for the main generator for an amount not to exceed $55,000.”
Kegley said the repairs could take four to six weeks to complete, but said it would much less expensive than having to replace the current generator.