Over the past ten years, the Maritime Administration (MARAD) has awarded and administered contracts for the major conversion of 15 vessels. Each of these projects involved vessel reactivation as well as conversion, and each contract was awarded on a fixed price basis. The combination of fixed pricing and vessel conversion/reactivation creates a challenge to shipyards bidding for the contract in that price competition is intense while, at the same time, an unknown level of growth work can be expected in the vessel reactivation portion of the project. Moreover, the project being bid, inclusive of anticipated growth work, must be integrated into the overall orderbook within the shipyard. The need for careful planning by the shipyard from the beginning of bid preparation through the end of the performance period is clearly evident. This SNAME paper, however, addresses not shipyard planning but continuing project monitoring and progress evaluation by the shipyard's customer. Such monitoring includes ongoing comparisons between the shipyard's planned and actual performance with respect to resource application and schedule adherence. From a technical standpoint, it involves compliance with contract and specification requirements. And finally, from a financial standpoint, it includes project progressing to provide the basis for periodic payments to the shipyard for completed work.
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