SURVEY OF COST DIFFERENTIALS AND OTHER FACTORS-PRIVATE VS. NAVAL SHIPYARDS

This report discusses findings on cost differentials and also the capability of private yards to work on Navy vessels. Exhibits presenting correspondence with the Navy and their responses are included in an appendix to the report. The primary sources of information for the analysis were: (a) Financial and Operating Statements, Navy Industrial Fund, June, 1970. (b) Shipbuilding and Repair Cost Data Questionnaires. (c) Shipyard Capability Evaluation Questionnaires. (d) Correspondence with Department of Navy officials. (e) Correspondence with private shipyard industry members. The information gathered from these sources was supplemented with statistics published by the Bureau of the Census, the Internal Revenue Service, and Dun & Bradstreet. The approach used to measure what is termed the "Total Cost Differential" between work performed in private versus Naval yards was to compare both the man-hours expended by private and Naval yards to accomplish like jobs and the cost of a man-hour of effort in private and Naval yards. The man-hour, or performance, comparisons were based on the DLG conversion program. The comparison of the cost of a man-hour of effort was based on computations of the Value Added per Production Worker Hour in private and Naval shipyards. Value Added per Production Worker Hour is a standard measure reported by the Bureau of the Census. The results of the survey indicate that based on the DLG conversion program information, the Naval yard is expending 39 to 52 percent more man-hours than the private yard to accomplish a similar job. It was also found that an hour of production worker time costs 49 percent more in Naval shipyards than in private shipyards. The combined impact of these two factors yields a Total Cost Differential of approximately 109 to 124 percent. This indicates that measured on a Value Added basis, the cost of performing ship work is over twice as high in Naval shipyards as it is in private shipyards.

  • Corporate Authors:

    Ernst and Ernst

    1225 Connecticut Avenue, NW
    Washington, DC  USA  20036
  • Publication Date: 1971-11

Media Info

  • Pagination: 58 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00032672
  • Record Type: Publication
  • Source Agency: Shipbuilders Council of America
  • Files: TRIS
  • Created Date: Apr 28 1972 12:00AM