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HomeMy WebLinkAbout06272018 City Council Work Session - JAG Shipyard Experience Summary - 5.18.18 JAG Industrial Services, Inc. dba JAG Industrial & Marine Services 225 East Chicago Street, Jonesville, Michigan, 49250 www: jag-ind-marine.com May 20, 2018 Ron Long Assistant City Manager & Community Development Director PO Box 167 Seward, Alaska 99664 Re: Shipyard Operational Background – Delivered Via Email Dear Ron, As per our conversation Friday, I wanted to deliver to you some additional detail regarding our experience in operating Shipyards. Below is a slide that we covered during our discussion when we met with you in Seward at the end of March. The initial bullet surrounded our Shipyard experience and we spent a few moments on that topic. I would like to further expand upon that bullet point. JAG –Overview •3 Key business lines •Great Lakes Shipyard Background –managed 75% of dry-dock capacity •Significant construction & repair •JAG roots with provisioning of skilled labor •Have developed outstanding executive & project management team across all disciplines •Customers supported across the Country •Key partner with Vigor Marine entities •Significant presence on the Great Lakes •Focused on small business set-aside work Marine -Project Management, Construction & Repair Skilled Labor Provisioning Small Business Set Aside / FF The intent of that initial slide and each bullet was • Outline our extensive experience operating and managing significant shipyards • JAG began with skilled labor provisioning • Shortly thereafter we began layering in significant and talented project management experience in all disciplines • We have worked across the country supporting our key customers • We are the sole provider to Vigor marine and have had key leadership project management roles. o On the last two National Security Cutter projects at Vigor Seattle (Berholf & Waesche), JAG has provided executive leadership, project management, and labor support. The combined value of these projects were in excess of $80M. o The USCG has provided outstanding feedback regarding JAG on each of these projects. o The Waesche is coming out of dock on Tuesday of this coming week, which is 60 days ahead of schedule. o JAG had a significant role in making this happen. • Currently in the Great Lakes, we employ nearly 300 folks during the winter season when the freighters lay-up for the winter to complete their annual repair season. Last year we managed 12 different vessels with the averaging $1.5M per vessel with some approaching $3M. This work is completed over a 90 day period when the lakes freeze and effective navigation is not possible. • The final note outlines our focus on small business set aside work. This has been a very successful initiative for JAG over the past 18 months. o We have done the following work full turn-key as the prime contractor. The work completed as we enter this market is already in excess of $8.2M o The USCG has been a meaningful percentage of this effort and § We are wrapping up this coming week a dockside effort on the Bertholf in Alameda, Ca. The Bertholf is one of the National Security Cutters § We also are in process of performing a $1.7M job in Kodiak, Ak on the USCG vessel Douglas Munro. § The JAG performance as the prime has been outstanding on each assignment. § We have been in contact with the contracting officer’s and / or shore chiefs and expect we will have some reference letters for you this coming week. o The USCG we believe will be important for the Seward Shipyard. We responded to the solicitation on the USCG vessel Mustang whom finds it’s home port in Seward. The availability is from July to November of this year and is a very nice sized job. The USCG has contacted JAG and looking to enter into discussions on this dry-docking of the Mustang next week. I would also like to share that already since the operating agreement has been executed, we have already docked and undocked the Jamie D. This fishing boat left the Seward facility on Saturday (5.18.18) and on Sunday (5.19.18) we are docking the Harley Tug Bob Franco and the accompanying barge Iliuliuk Bay. Jamie D - Departing Iliuliuk Bay - Arriving We also have multiple other opportunities we are working on currently and are encouraged with the opportunities being identified and the customer feedback we are receiving. Regarding specifically about our Shipyard operating experience. The principal’s of JAG have a long history of successfully operating shipyards. Please review the following bullets that summarize this experience: • Doug Huff was an executive with the Manitowoc Marine Group (MMG) from 1991 – 2001. Doug was CFO of the MMG and had full executive operation of the Toledo and Cleveland facilities. We managed 75% of the dry-dock facilities on the Great Lakes. • The MMG operated initially Bay Shipbuilding in Sturgeon Bay Wisconsin which has a beautiful 1,100’ graving dock, smaller docks, and a 600’ floating drydock. The Toledo Shipyard has an 805’ and a 550’ graving dock. Cleveland Shiprepair was a topside facility serving the marine industry. • Tim Jagielski ran production and operated the Toledo and Cleveland yards and was fully responsible with the operation of the drydocks and facility including capital and maintenance investments. • Specifically regarding the Toledo facility, we drove the $2.7M extension of the drydock to 805’ that allowed the drydock to accommodate all vessels that sail the Great Lakes with the exception of the 1000’ vessels. This was funded both corporately and via grants. o It is interesting to point out that the Toledo facility is owned by the Toledo Lucas County Port Authority, whom was our landlord. Bob Franco – Out of Water Bob Franco - Arriving o We worked very close with the Port Authority to execute the vision of the Toledo facility. o It is a similar relationship which we would have with the City of Seward regarding the Seward Shipyard Facility. • Across the MMG, we managed the maintenance and capital plans of the facilities. These included but were not limited to the drydock extension noted above, pumping houses and capacity, dredging, blocking, drydock gates, docks themselves, mechanical equipment, cranes, compliance requirements, and all other facilities on property from fabrication to mechanical to paint shops. o We are well versed in operating and maintaining shipyard facilities. o The capital and maintenance budgets were extensive. • In 2000, Doug was one of the executives whom led and then integrated the acquisition of Marinette Marine by the MMG. • Doug at that time moved to Wisconsin, continued as CFO for the MMG and also assumed the responsibility of Assistant GM over the entire group which now included Marinette Marine in addition to the BSC and Toledo and Cleveland facilities. • Tim Jagielski assumed GM duties of the Toledo and Cleveland facilities. • The work completed at these facilities was significant and included o Robust repair work on the US and Canadian fleets o Articulated Tug / Barge construction o OPA 90 tanker programs o Dredges o Staten Island Ferries o USCG Mackinaw Icebreaker – New construction o USCG WLB / WLM class vessels (we were delivering one per quarter from Marinette Marine while we were there) • Our executive team is also very experienced in shipyard operations and this should not be overlooked. They represent the best of the best. o Charles Minton, Chuck Gilbrech (our Managing Director for Seward), Rick Weaver, Steve Wynkoop, Gene Thelin, Eddie Treadway, Todd Jagielski, Jacques Millete, Rocky Alford, John Jagielski, and Edwin Reyes all have dozens of years of shipyard experience and are some of the very best Marine talents nationally in the industry. o This team covers every discipline including electronics, steel, mechanical, painting, habitation, piping, and all other requirements of a full service shipyard. o Chuck Gilbrech whom is our Managing Director of Alaskan operations including the Seward facility is a perfect fit. Chuck is an Alaskan resident, has literally traveled the world completing and managing large, technical projects on vessels, oil rigs, and marine related initiatives. § His experience in all shipyard operations is broad and he is terrific with customers and leading teams. § We have the right executive leading the Seward / Alaskan operations. • Below is a cool repair job that we accomplished in record time while in the Toledo yard. The American Mariner ran into a lighthouse in the Detroit River and we performed a significant repair job from the Toledo facility. While Doug moved to the Telecom industry and assumed executive responsibilities with American Tower (a fortune 100 company that currently owns and manages 150,000 telecom sites across the world), Tim remained in differing capacities within the marine industry. Doug and Tim reconnected in 2011 and started JAG. In 2011 JAG was formed and has developed a sterling reputation in the industry. Over the past 18 – 24 months we have broadened our approach beyond project management and labor provisioning. We have over the years added industry leading team members that are supremely talented and fit our operating mindset. We have landed and successfully performed multiple prime contracts and have been working to identify opportunities to acquire and operate shipyard(s). We were very close to closing on a shipyard in the Great Lakes, but couldn’t quite come to financial terms. We regard the Seward Shipyard opportunity as outstanding and are committed to making Seward the premier Alaskan facility that will support the local economy, provide jobs, and be a key contributing member of the community. The Harley work coming into the yard today is nearly $1M of work, and was going to either Canada or Washington to have this work completed prior to us approaching them. After meeting and getting to know our team, evaluating us, meeting with their owners, and with the knowledge they have of JAG, Harley determined they have the confidence already to have pulled this work from other facilities and gave both of these vessels to us in Seward for execution. American Mariner Casualty and Progress Photo of Repair The Mustang solicitation recently was released and bid by JAG. This work without JAG’s insertion would have been completed outside of Alaska even though it’s home port is in Seward. While we have not been awarded this work yet, the USCG has reached out to us regarding our RFP submission, and we are optimistic that we will be the successful bidder. We believe that JAG is the absolute answer for the Seward Shipyard and excited and encouraged with the opportunity. It would be terrific to fast-track the lease assignment, which would allow us to get to work executing both our and your vision for this Shipyard Asset of SMIC. Please let me know if you have any questions. Our Best, Douglas Huff Douglas Huff President