Sunday, August 2, 2015

Turbine Repair

We’ve been looking a bit at repair and maintenance costs.  Here’s an interesting one.  Huntington Ingalls Inc. has received a $6.7M contract for repair of the number two ship’s service turbine generator on USS Nimitz (CVN 68).  Work is expected to be completed by October 2015. 

That seems like a lot of money for repair work on a single generator!  I wonder what the cost of a new one is?

You know, we talk about preserving the industrial base as a national strategic priority.  I wonder if we shouldn’t really be trying to expand the industrial base rather than preserve it.  Preservation at the current levels leads to a lack of competition which leads to higher prices.  Maybe we should be encouraging smaller companies to enter the defense industry with the idea of expanding the supplier base and promoting more competition as they grow.


Of course, we aren’t going to produce another nuclear carrier construction company overnight but there are lots of small companies that operate around the fringes of the defense industry and only need some financial encouragement to expand.  Over time, we could see several new companies grow into the defense industry.  We issue far too many sole source, non-compete contracts to be comfortable with the current situation.

6 comments:

  1. "That seems like a lot of money for repair work on a single generator! I wonder what the cost of a new one is?"

    For they type that's on the Nimitz? About $120-150M a piece depending on the market. Those turbines are ridiculously complex pieces of machinery and always have been.
    $6.7M for maintenance of one of them actually tells me that they're prepping the Nimitz for decom, it should be closer to $30-40M it they're trying to keep her in service.

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    1. I think you havent read the description closely. Its a ships service turbine generator, basically a ships power generator. Nimitiz has 8 of these each generating 8MW each. They are small units in the scheme of things. Not to be confused with the 48MW or 64000 shp steam turbines which drive each propellor.
      $6.7m for a single small power generator does seem a large amount.

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    2. ...You're right, I misread it. BIG difference!
      Now I feel embarrassed.

      That being said, $6.7M is... about the cost of a new one.

      I seem to recall reading somewhere that the smaller generators on capital ships were sometimes just outright replaced instead of repaired.
      Perhaps that's what's happening here?

      - Ray D.

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  2. To the point of expanding the industrial base. You will have to pay other contractors to develop and maintain that capability. The Market density is not enough to keep more contractors in it or to maintain skills on older models or generators. To make a fair contract would require Navy/Government personnel to know what is required to repair/rebuild one of these and make sure the Contractor is doing that in a cost effective manner and not choking the Golden Goose.

    Is it worth it? I believe so. Is it based on the impossible premise of the Gov/Navy having sufficient knowledge and integrity to not give away the Golden Goose? Yes.

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  3. Quality Engines cost money
    Both to buy, and to keep in tip top condition.

    I've not been in the engine room of a Carrier, but I have the distinct impression that this generator is going to be the size of a small house, in a room only slightly larger, will likely need to be dismantled inside the Carrier, by hand, taken off in pieces, cleaned, checked for wear, have parts replaced, taken back on board and rebuilt in place.

    We just arent talking an annual car service here.
    It'll get all that sort love every 3 weeks, if not sooner.

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    Replies
    1. TrT, see Ztev's comment above. These are "small" service generators.

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