As it is, MARAD will pay the company $14.8 million to tow, dismantle and recycle 13 National Defense Reserve Fleet ships from the James River in Virginia. The deal calls for four ships to be scrapped initially. If these ships meet EPA/MA RAD requirements, nine others will follow before Dec. 31, 2005. MARAD will receive a $3 million credit toward the overall price the contractor re-ceives for the ships.

Usable Tankers Sweeten Deal

But the incomplete Navy tankers Benjamin Isherwood and Henry Eckford, which cost taxpayers more than $250 million each, according to for-mer Rep. Helen Bentley (R-Md.), are to be delivered by Sept. 30, 2004.

Rep. Solomon Ortiz (D-Texas) called a meet-ing with MARAD and ship breakers July 15. He figures some kind of protest is in order, but has not decided what it is yet, Ortiz spokeswoman Cathy Travis told DC.

He is not alone. "They are playing dice with the [Federal Acquisitions Regulations]," consultant Polly Parks told DC. "This is really way out there."

The tankers, which are listed as obsolete by MARAD, will not be scrapped in England. The ships will be finished and sold. It is against the law for U.S. scrappers to resell former military ships. However, a provision added to the 1999 defense appropriation act allows the Benjamin Isherwood and Henry Eckford to be sold "to a North Atlantic Treaty Organization country for full use as an oiler." That's where British-based Abel UK enters the picture. It has been hired as the subcontractor.

The revelation appeared to rattle both House Armed Services Committee Vice Chairman Curt Weldon (R-Pa.) and Rep. Jo Ann Davis (R-Va.), a strong supporter of the deal. Her district includes the fleet. Claiming to have no details about the British deal, Davis told DC, "I just want [rotting ships] out of there."

PRP is working with Abel UK Ltd. to scrap the ships at its shipyard in Teesdale, England.

The Pyne Companies of New York is affiliated with PRM, according to published reports. Shipbreakers pointed the finger at company owner Percy Pyne. "Obviously he is the one who" had the language put into the law and was waiting for the right time to take advantage of it, Weldon said at the July 15 meeting.

Repeated attempts to get comments from Pyne Companies were unsuccessful.

There is no way of tracking an amendment that far back, a congressional source told DC.

James Caponiti, MARAD assistant administrator of national security, told Weldon domestic shipbreakers had the same opportunities to bid on all 130 ships in the James, or any part of the Ghost Fleet. That was news to the half dozen or so ship yard representatives, MARAD, EPA, the Navy and industry. "If we haven't been open, I'll take [the heat]," Caponiti said.

Since then, the administration has scheduled an Aug. 20 industry meeting to provide information on the Program Research and Development Acquisition Process and other processes used in support of the Ship Disposal Program.

Contacts: Rep. Weldon, (202) 225-2011; Rep. Ortiz (202) 225-7742; Rep. Davis, (202) 225-4261; Rilla Gaither, MARAD, (202) 366-1942.