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DOCUMENT RESUME
02958 - [A1953029]
[Transfer of Toolmaking, Toolcutting, and Grinding Functions at
the Portsmouth Naval Shipyard). LCD-77-435; B-168700. Jujy 11,
1977. 3 op.
Report to Sen. John A. Durkin; by Robert G. Rothwell (for Fred
J. Shafer, Director, Logistics and Communications Div.).
Issue Area: Facilities and Material Management: Operation and
Maintenance of Facilities (708).
Contact: Logistics and Communications Div.
Budget Function: National Defense: Department of Defense -
Military (eycept procurement & contracts) (051).
Organization Co..-,-rned: Department of the Na'y: Portsmouth Naval
Shipyard, Nh.
Congressional Relevance: Sen. John A. Durkin.
A review was conducted of the transfer of certain
machine functions at the Portsmouth Naval Shipyard in response
to charges that the transfer increased costs, necessitated
outside procurement, and resulted in an organizational structure
contrary to a Navy instruction. The organizational control of
these functions uas transferred from the Central Tool Room (Shop
06) to the Inside Machine Shop (Shop 31). Findings/Conclusions:
Since the workers were located in Shop 31 even before the
transfer, and the transfer was merely organizational, the
ctfective cost of the work was not changed. The allegation that
the cost of work more than doubled due to increased overnead
cost was based on an incorrect comparison of the average hourly
direct labor cost of Shop 06 with the average hourly total costs
including overhead of Shop 31. The overhead was more than 100%
of direct labor, and this accounted for most of the difference,
It was ascertained through an interview that purchases from
outside contraztors were made because of delivery time and cost
considerations and not because of the transfer. Although the
organizational structure did not comply with a Navy instruction
which states that Shop 06 will be charged with toolcutting and
grinding functions, and the transfer was made without requesting
approval from the Commander, Naval Ship Systems Command, as
required, it appeared that the Commander ratified the transfer.
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