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Pacific Islands Development Program, East-West Center

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Guam Ship Repair Facility Ownership Negotiations Fail
No immediate changes expected for employees, vendors

By Steve Limtiaco

HAGTA, Guam (Pacific Daily News, Dec. 19, 2012) – The U.S. Navy once again is looking for an organization to take over the former Guam Ship Repair Facility after it failed to reach an agreement with the current leaseholder, Guam Industrial Services, according to Naval Facilities Engineering Command.

The announcement is not expected to effect the facility's operations or its employees, according to a written statement from Guam Industrial Services, which operates the facility as the Guam Shipyard.

The Navy in 1995 announced the closure of its Ship Repair Facility, as part of the base closure and realignment process. The Navy leased it to the Guam Economic Development Authority, which in October 1997 subleased it to Guam Industrial Services.

The Navy had planned to transfer ownership of the site to the local government, but it canceled those plans in May 2000.

The lease with the Navy expired in September, and the shipyard has been leasing the site on a month-to-month basis, according to NAVFAC.

Guam Shipyard and the Navy in May started to negotiate a possible 40-year lease, to include the repair and maintenance of military ships. Guam Industrial Services was the only company to bid on it.

But the Navy yesterday announced that those negotiations were terminated after they were unable to reach an agreement on specific terms and conditions for the 49-acre site.

But it is important that Guam have ship repair capabilities, the Navy stated, and it will begin a new procurement process. It said it plans to announce a "market survey" during the next few weeks, which could allow Guam Shipyard, the Guam Economic Development Authority and others to compete for future ship repair work here.

"Guam Shipyard foresees no immediate change to the day-to-day business at the shipyard, nor impact on shipyard employees, vendors, and suppliers, and looks forward to continuing a strong relationship with the Navy to keep its ships at its best operational readiness condition in the Western Pacific Area of Responsibility," the shipyard stated.

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