VSE/BAV Completes Reactivation of Ex-Kidd Class Guided Missile Destroyers

Sep 21, 2006, 01:00 ET from VSE Corporation

    ALEXANDRIA, Va., Sept. 21 /PRNewswire-FirstCall/ -- The BAV Division of
 VSE Corporation (Nasdaq:   VSEC) (hereafter referred to as VSE/BAV) announced
 today that it had completed the reactivation of two ex-Kidd Class guided
 missile destroyers. Harry Flammang, the Division Manager of VSE/BAV, said
 the final of four ex-USS Kidd Class guided missile destroyers reactivated
 in Charleston, South Carolina for the Taiwan Navy. The departure of these
 ships for Taiwan draws to a close a successful, high-visibility program
 that has spanned three years.
     Overhaul Planning and Reactivation
     VSE/BAV managed the successful reactivations as Prime Contractor to the
 Naval Sea Systems Command (NAVSEA) for support of ships and systems
 transferred under NAVSEA's Foreign Military Sales program. VSE Chairman,
 President and CEO/COO Don Ervine commented, "Over ten years ago VSE/BAV
 departed from the Navy's traditional business model for overhauling and
 maintaining ships in favor of a more effective and efficient business model
 that significantly reduces costs, improves and controls schedules, and
 continuously delivers sound technical performance to our customers. This
 business model coupled with strong systems integration capability and
 exceptionally knowledgeable and talented team of people has allowed VSE/BAV
 to complete the complex overhaul and reactivation of the four ex-USS Kidd
 class guided missile destroyers in two and one-half years, which is well
 ahead of schedule and under budget."
     The ex-Kidd Class guided missile destroyers included the USS Kidd (DDG-
 993), USS Scott (DDG-995), USS Callaghan (DDG-994), and USS Chandler (DDG-
 996). Prior to reactivation, the ships had been stored at the Naval
 Inactive Ship Maintenance Facilities at Philadelphia, Pennsylvania and
 Bremerton, Washington since being decommissioned from the U.S. Navy in the
 late 1990s.
     To restore these ships to full operational capability, VSE/BAV and its
 21 subcontractors planned and performed in excess of 14,600 industrial work
 items requiring more than 168,300 man days. The subcontractors included
 Detyens Shipyards, Booz|Allen|Hamilton, Rolls-Royce, Raytheon, DRS, L-3
 Communications/PACORD, B&D Boilers, Sullivan and Associates, Anteon, and
 George C. Sharp. At one point in the project, three ships were in full
 industrial production, with advance work being conducted on the fourth
     Over the course of eleven years and 30 previous transfers, VSE/BAV has
 used a process of ship systems reactivation that minimizes expense to the
 customer. Systems are opened, inspected, the condition assessed and only
 the components necessary for reactivation are procured. Reactivated systems
 are subjected to extensive quality assurance tests and then fully tested
 again during sea trials. The result is similar to a "just in time" business
 strategy that minimizes expense to the customer by reducing the amount of
 resources expended on unnecessary inventory and unneeded repair efforts,
 while fully achieving the customer's operational requirements.
     Rear Admiral Pu, Commander of Taiwan's Kidd Class Ship Transfer
 Squadron, commented, "Many did not believe the four ships would be
 delivered within the budget. At times, I had my doubts, but we all worked
 together to deliver all four ships early and under budget."
     System Upgrades
     The industrial reactivation of these four ships included significant
 repairs and modernization. Two sonar dome rubber windows had to be replaced
 and all four of the SQS-53A sonars were upgraded to the SQS-53D (digital
 version). Additionally, New Threat Upgrade (NTU) weapons systems were
 modernized to shoot the Standard Missile 2, Block IIIA, the standard area
 defense, anti-aircraft missile used by the U.S. Navy. The VSE/BAV team also
 replaced 11 waste heat boilers, part of the DDG's power generation system,
 reactivated all 28 of the ships' propulsion and electrical generator gas
 turbines, installed two "Triple S" clutches that transfer power from the
 gas turbines to the massive reduction gears, and installed the first ever
 Close in Weapons System that combines two different model mounts on the
 same ship.
     While part of the U.S. Navy active fleet, the four ships received the
 baseline NTU modernization to their Anti-Air Warfare System, an extremely
 capable and complex system of sensors, computers, and advanced ordnance
 systems. The last NTU ship, USS California (CGN 36), was decommissioned in
 1999. Thus, active U.S. Navy support of the NTU system had ceased almost
 five years prior to the start of this project. Reactivating this system
 required exceptional ingenuity to ferret out sources of repair parts and
 find people with the requisite skills to reactivate the ships' systems.
     Crew Training
     The VSE/BAV Team recruited extensively among ex-U.S. Navy technicians
 and particularly among ex-USS Kidd Class sailors to staff not only the
 project's industrial management team, but also a group of fifty people
 hired as instructors and technical specialists directly supporting the
 ships' crews. This team, referred to as the Ship Transfer Assistance Team,
 or STAT, was almost entirely composed of retired U.S. Navy personnel who
 averaged 20 years' experience on their respective systems. STAT personnel
 were primarily used as instructors for training Taiwan crews, but they also
 provided technical expertise to Taiwan Navy technicians who actively
 participated in industrial work. In training the Taiwan crewmembers, the
 STAT conducted 4,625 classes, comprising 19,574 instructor hours and
 156,247 student hours. The STAT also produced 193,736 Personnel
 Qualification Standards system signatures to validate Taiwan crewmembers'
     The ships and their crews were subjected to a rigorous training
 regimen. They received scrutiny similar to that which any U.S. Navy
 combatant receives after emerging from a major industrial availability
 period. The final inport and underway training was modeled on the U.S.
 Navy's Tailored Ship Training Availability (TSTA) and Final Evaluation
 Phase (FEP) format, including drill packages and exercises any U.S. Navy
 Sailor would find familiar. Before that, the crews were taught theory in a
 classroom setting, received extensive on the job training, and were
 subjected to a tailored Personnel Qualification Standards (PQS) system. On
 several occasions, actual U.S. Navy inspection teams were brought onboard
 to evaluate the training of the crews and material condition of the ships,
 particularly during the Light Off Assessments (LOA) for the ships'
 engineering departments.
     Mike Fahey, VSE/BAV's Waterfront Manager for the project, commented,
 "The composition of the waterfront team is the finest group of
 professionals I have ever seen. Their vast experience coupled with
 exceptional managerial and technical skills epitomizes the finest qualities
 of American character which is a credit to VSE/BAV Corporation."
     In addition to the VSE/BAV Team's management and performance of the
 industrial availability and crew training, it also provided extensive
 logistical support including messing and berthing the Taiwan crews, and
 procuring and warehousing all materiel required for both the industrial
 work and ships' outfitting. Crew support entailed the feeding and berthing
 of more than 1,500 Taiwan military members during the course of the
 project. Industrial support required the receipt and issuance of more than
 51,000 material line items.
     Post-overhaul Testing
     The ships, with their new crews, performed extensive post-overhaul
 testing and sea trials, to ensure all systems were working to
 specification. The culmination of these tests and trials was the successful
 SM 2 Block IIIA live fire missile exercises, conducted by DDGs 1801 and
 1802, off the Virginia coast in October 2005.
     On November 1st, 2005, the first two ships, ROCS Kee Lung (DDG 1801)
 and ROCS Su Ao (DDG 1802) departed Charleston for Taiwan, ahead of schedule
 and under budget. Only ten months later, the remaining two ships, ROCS Tso
 Ying (DDG 1803) and ROCS Ma Kung (DDG 1805) departed, again significantly
 ahead of schedule and under budget.
     VSE's International Group President Jim Knowlton said, "VSE/BAV has a
 long relationship with the Taiwan Navy. Since 1997, we have participated in
 the transfer of an ARS, two Knox class frigates, an Anchorage class LSD,
 and now the four Kidd Class Destroyers. Each of these efforts has been
 extremely successful and has significantly enhanced Taiwan's naval
 strength. We look forward to our next opportunity to work with our Taiwan
 Navy shipmates."
     VSE provides diversified services to the engineering, energy and
 environment, defense, and homeland security markets from more than 20
 locations across the United States and around the world. For the six-month
 period ending June 30, 2006, VSE reported consolidated revenues of $158
 million and earnings of $3.5 million ($1.45 per diluted share). For more
 information on VSE services and products, please see the Company's web site
 at http://www.vsecorp.com or contact Len Goldstein, Director of Business
 and New Product Development at (703) 317-5202.
     News Contact: C. S. Weber, CAO, at (703) 329-4770.

SOURCE VSE Corporation