The disclosure, made by Rep. Curt Weldon, R-Pa., raised new questions about the fairness of the bidding process used by the Maritime Administration in deciding who should dispose of the obsolete "ghost fleet," which has become a floating environmental hazard.

Domestic scrappers expressed frustration that much-needed shipyard work would be sent overseas - under conditions they said made them unable to compete effectively.

The pending deal, negotiated through the New York-based Post Remediation Partners, calls for the British company, Able UK Ltd., to scrap 13 ships at its environmentally approved shipyard in Teesside, England. But the agreement also would allow the company to buy - and later sell at a profit - two never-completed Navy ships that could be used as oilers, officials acknowledged.

Weldon, who held a forum Tuesday to call attention to the agreement, produced copies of legislation showing that such an overseas sale had been authorized as far back as 1999. An unidentified lawmaker slipped the provision into that year's defense appropriations bill.

"Obviously, somebody had the skids greased," said Weldon, the vice chairman of the House Armed Services Committee, who has been pushing for more domestic scrapping work.

Weldon claimed the ability of the British company to sell the two oilers for extra profit - a provision domestic scrappers had no way of knowing was possible - likely made most other bids uncompetitive.

"I don't think any domestic ship scrapper realized they could use two other ships to sweeten the financial deal," Weldon said. "That's not right. That's not kosher. I'm very unhappy about it."

Domestic scrappers echoed that view, saying the ability to sell two ships - instead of scrapping them - could have allowed them to propose disposing of a greater number of ships.

"None of us knew this avenue was open to us," said Richard Goldbach, chief executive officer of Metro Marine, which has facilities in Norfolk and Philadelphia.

A top Maritime Administration official defended the bidding process, saying the agency issued an open-ended proposal that asked industry to come up with as many creative ideas as possible for disposing of the greatest number of ships.

"I believe we gave the same opportunity to domestic yards," said James Caponiti, associate administrator for national security for the Maritime Administration, or MARAD.

Of 77 proposals received by the agency, he said, 30 were from domestic yards and 31 were foreign. The remaining bids were for options other than traditional scrapping, such as sinking ships to create artificial reefs.

Post Remediation Partners, the New York company working with the British, first won the right to sell the two oilers in 1999, but never completed the deal because of poor market conditions, said Chris Bridge, a consultant to the company who did not attend Tuesday's forum. The company then decided to include the sale as part of its new bid for scrapping work this year, she said. The two 15-year-old oilers, which sit in the James River, were never completed and would sell for less than $2 million each, according to a MARAD spokeswoman.

The disclosure of the oiler sale came as an embarrassment to Rep. Jo Ann S. Davis, R-Gloucester, who has publicly backed MARAD and has pushed for the British deal as the most efficient way to get ships out of the James.

"It seems to me the whole thing has probably been handled very poorly," Davis said. But she stopped short of calling for canceling the deal, saying she did not want to do anything that would slow down efforts to remove the ships before the peak of hurricane season.

Percy R. Pyne IV, head of The Pyne Companies, which is affiliated with Post Remediation Partners, donated $500 to Davis's congressional campaign last month, her latest campaign disclosure report shows.

But in another sign of her discontent, Davis decided Tuesday to return the money, said Christopher Connelly, her chief of staff.

"If they did grease the skids, we don't want anything to do with it," Connelly said. "We're not saying it's dirty money. We just don't want an appearance of any conflict."

MARAD officials stressed that they intend to use more domestic scrappers for future work. Even after a British deal is completed, at least $10 million would still be available for additional scrapping contracts this year, said MARAD spokeswoman Robyn Boerstling.

The agency is under pressure to meet a congressional mandate requiring the disposal of all obsolete ships in the James River by Sept. 30, 2006. Many are loaded with toxic PCBs and asbestos and have hulls so thin they can be pierced with a hammer.

David Lerman can be reached at (202) 824-8224 or by e-mail at dlerman@tribune.com

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