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Stormy Seas Ahead for US Shipbuilding Safety

USS John C. Stennis enters dry dock in 2013 on anovercast day at the Puget Sound Naval Shipyard

Photo Credit: U.S. Navy / Flickr

On Friday, the Center for Investigative Reporting published a disturbing exposé of the national defense shipbuilding industry, documenting how the US Navy and Coast Guard award billions of dollars in contracts to shipbuilders with lax safety standards. The article starkly illustrated the lack of accountability in the industry and the “unhealthy codependency” between the major shipbuilding companies and Uncle Sam.

The article focused on one company, VT Halter Marine, and a deadly explosion at its Escatawpa, Mississippi, shipyard in November 2009. The Occupational Safety and Health Administration (OSHA) initially fined VT Halter $1.3 million for violations relating to the explosion, which killed two workers and injured five others, but later reduced the fine to $837,000.

One month after the explosion, the Navy awarded VT Halter an $87 million contract to build an oceanographic survey ship. Since then, the company has been cited for other workplace safety and environmental violations, yet is still receiving federal contracts. The government’s top three shipbuilders—General Dynamics, Huntington Ingalls Industries, and Austal USA—also have documented histories of misconduct, including a $171,300 OSHA fine of General Dynamics in 2012 for violations at its shipyard in Bath, Maine.

The Center for Investigative Reporting found a startling lack of concern for safety on the part of the Navy. “We are not the overlords of private shipyards when it comes to workplace safety,” a Navy spokesman told reporter Jennifer Gollan.

Gollan found that from 2005 through 2015 there were 76 fatalities in the shipbuilding and repair industry, with at least a quarter of those deaths occurring at shipyards owned by federal contractors. She warned that working conditions at these shipyards could get worse as the Navy, with support from President Trump, prepares to significantly expand the size of its fleet.

Several factors have created this dire situation. First, the government has few alternatives when it comes to building or repairing ships. For national security reasons, the work must largely be performed by US-based companies, only a small number of which are able to meet the government’s needs. Financial pressure on these shipbuilders, who heavily depend on federal contracts, often leads to shortcuts that create hazardous work environments.

Second, shipyard workers and their families have limited legal recourse for workplace injuries and fatalities, and the Navy and Coast Guard are more concerned with production than safety. Instead, accountability is largely up to agencies like OSHA and the Environmental Protection Agency. Those agencies levy fines, which amount to a slap on the wrist to companies with billions of dollars in contracts.

Third, federal regulations governing how contractors are evaluated and selected under-emphasize companies’ workplace safety records. President Obama tried to remedy this with his Fair Pay and Safe Workplaces executive order, which required companies to disclose labor violations. But a federal judge last year blocked the disclosure requirement, and Congress is now moving to abolish it entirely. Nevertheless, companies are disclosing health and safety violations in the Federal Awardee Performance and Integrity Information System (FAPIIS), which agencies are required to check before awarding contracts and grants.

We hope the Center for Investigative Reporting’s account sparks reforms. There is a cruel irony in spending billions of dollars to keep our country safe, yet simultaneously endangering the lives of workers in the shipbuilding industry.

Update: POGO received the following statement from the Shipbuilders Council of America (SCA), the national trade association representing the US shipyard industry:

"SCA members are committed to ensuring the safety of our shipyard employees. We recognize shipyards are complex work environments which is why our members are constantly working to ensure the safety of employees as demonstrated by the industry's reduction in total recordable incident rates (TRIR). To continue building upon our industry-leading safety practices, SCA renewed it’s Shipbuilding Group Alliance with OSHA and the National Shipbuilding Research Program (NSRP) in 2016 to develop training and identify best practices to further promote employee safety and health in shipbuilding and repair."

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: National Security, Public Health and Science, Contract Oversight

Related Content: Contractor Accountability, Coast Guard, Homeland Security, Federal Acquisition, Contractor Misconduct, Department of Defense (DOD), Federal Contractor Misconduct, Competition in Federal Contracting, Defense, Federal Awardee Performance and Integrity Information System (FAPIIS)

Authors: Neil Gordon

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