The following article appearing in the March, 1995 issue of the non-profit newsletter, Pick and Shovel. This is a chroncile of a maritime tragedy sponsored by can only be termed the "neglect" of Military Sealift Command headquaters in Washngton, D. C.

Military Sealift Command Tanker Debacle, Part One

As of 1.30.95: Vice Admiral Quast said he plans to overhaul the Military Sealift Command to make it more responsive to the military's needs.

The command is "archaic, slow and shore-oriented," he said. "People are frustrated with dealing with us because of our bureaucracy."

Quast, who headed the sealift command since August [94], has himself been a victim of bureaucracy.

He said he learned that sealift command oil tankers were violating worker safety and environmental regulations when the General Accounting Office reported it to Congress. And he learned that the command had leased ships to deliver heating oil to North Korea only when he received a telephone call at home one night in which the Defense Department ordered that the delivery be delayed while North Korea held a U.S. helicopter pilot.

"I don't like finding out about problems from the GAO or from some senator pointing his finger at me in front of the whole world," Quast said. "I can't put up with not knowing that problems exist."

Quast said he does not yet have a clear overhaul plan, but he is asking shipping executive, academics and consultants [no CivMars?] for recommendations. "I hope to have a plan in place by summer," he said.

According to the GAO report: A spot survey of three Sealift tankers showed that 27% of those employed had been covicted of felonies including rape and assault; one third of these convictions involved drugs. Two men were fugitives, some were using false security numbers and a few were not U.S. citizens.

In the 12/13/94 issue of the Journal of Commerce we found an article captioned "Sealift Command to Shift Transport of Jet Fuel to Commercial Ships." In this article Admiral Quast --the current Admiral taking a break before retirement as head of Military Sealift Command-- stated that "In today's environment, we must make decisions which will provide the most efficient service to our Department of Defense customers and provide the best value to the taxpayer."

Quast's statement was for "public consumption," food for the mass. His intimation was that MSC had assessed that we (taxpayers) could get better service for our money by carrying fuel oil on commercial vessels. The real reason MSC is shifting fuel "transport" to commercial ships is that she (MSC) is up to her ass in alligators concerning the nine Sealift tankers due to [in our humble opinion] dereliction of duty, ineptitude, and [depending on your viewpoint] gross negligence. The Sealift tanker charter debacle is about to end and this didn't happen because MSC was concerned about saving taxpayer dollars. It came about because people complained, someone listened, an investigation was generated, and the can of worms was opened. The rip-off is about to stop.

In the spring of 1992, Senator Carl Levin, Chairman of the Subcommittee on Oversight of Government Management, directed that the General Accounting Office initiate an investigation into "allegations concerning the operation of nine Sealift tankers [Sealift Atlantic, Sealift Pacific, Sealift Arabian Sea, Sealift China Sea, Sealift Indian Ocean, Sealift Mediterranean, Sealift Caribbean, Sealift Arctic, and Sealift Antarctic] leased by the Department of Navy's Military Sealift Command to transport jet fuel and other petroleum products to ports worldwide in support of U.S. military efforts. As agreed, we investigated whether (1) the ship's equipment had deteriorated because of inadequate maintenance and (2) the Sealift tankers were being operated unsafely due to unqualified and inadequate numbers of crew. Our investigation focused on the time period that International Marine Carriers, Inc. (IMC) has been operating the nine MSC Sealift tankers--April 1990 to May 1994."

The Office of Special Investigations presented it's report regarding the Sealift tankers to Chairman Levin on August 31, 1994. Because everything in this report will be of interest to CivMars we are going to quote it in its entirety. The Sealift debacle is disgusting and all the more so because CivMars have watched these ships deteriorate for years. Regarding them, MSC just didn't give a damn. She paid the bills, watched the Sealift tankers sail over the horizon, and that was that. This approach aligns itself perfectly with the infamous quote which came from a MSC Fat Cat in D.C. regarding the A-76 Program and maintenance: "Maintenance is not a factor with these ships. We must make the program work any way we can." I wonder if this individual was in any way aligned with the Sealift tanker charter program?

The fact that the Charter Pirates and their Fat Cat MSC Cohorts have ripped off MSC is only part of the picture. On the one hand we have MSC representatives coming to Norfolk to propose programs to CivMars whereby overtime will be cut (in the Government's best interest, of course) and on the other hand these charter vessels are taking CivMar jobs and wasting government money on a scale a CivMar couldn't fathom if he tried. Are we to take our superiors purportions that they are acting in "our" best interest seriously? I think not.

What follows below is taken verbatim from the Sealift tanker investigative report. Heads up. Much of what you are going read taxes credibility...

The United States General Accounting Office, Office of Special Investigations, August 31, 1994 presents the following


We found numerous adverse conditions on all nine tankers in the tanker-leasing program affecting the ships, the crews, the environment, and the program. First, MSC's lack of oversight of ship maintenance requirements caused the ship's conditions to deteriorate. The lack of maintenance, in turn, adversely affected the ships' safety and mission readiness. As of April 1994, this shortcoming has resulted in an additional cost to MSC, and thus the government, of approximately $20 million. Second, the lack of qualified and fully staffed crews contributed not only to oil spills with their adverse effects on the environment but also to the lack of mission security and efficiency. MSC failed to enforce the crewing requirements and had no system to determine if the contractor was complying with the requirements.

These conditions occurred because of weaknesses in MSC's contract administration practices. These weaknesses included the absence of (1) a program manager, (2) a written designation of departmental responsibilities for the program, and (3) a Contracting Officer's Technical Representative (COTR) to monitor the contractor's performance from the contract's inception in 1990 until 1993. These problems have been compounded because they follow years of poor maintenance under the previous contract.


MSC is responsible for the operation of 125 ships worldwide. All are operated by civilian crews--54 are crewed by private companies pursuant to contracts with MSC; the rest, by federal civil service employees. Currently, MSC charters 16 tankers to fulfill U.S. defense fuel needs worldwide, both ashore and at sea. Nine, the subject of our review, are Sealift class tankers that were specifically build for, and chartered to, MSC for 20 years, 1975-1995. They provide point-to-point fuel deliveries to U.S. defense bases around the world during peacetime and are equipped to transfer fuel to other ships at sea. At then end of the charter period, MSC must return the ships to owners in the same condition as received, less "depreciation ad normal wear and tear."

A contractor operates and maintains the ships. MSC awarded a 5-year fixed priced contract for about $170 million to IMC in April 1990. However, the contract allowed modifications that increased MSC's payments to IMC, as of April 1, 1994, to about $256 million--including reimbursables for fuel, upgrades, and other costs--with another year to go on the contract. During the 15 years prior to this contract, another contractor, Marine Transport Lines, Inc., operated the tankers under two consecutive contracts. The first was a 10-year cost-reimbursement contract; the second, a 5-year fixed-rice contract. According to MSC officials, MSC decided to change contracting methods from a cost-reimbursement to a fixed-price approach to save funds. From the program's inception in 1975 to March 1, 1994, MSC had obligated $1.3 billion to charter and operate the nine tankers.

The current contract with IMC stipulates that the contractor is responsible for providing qualified MSC-approved crews of 25 persons (in 1992 an additional crew member--a fuel wiper--was added to each tanker's crew at MSC's expense) for the safe, worldwide operation of each of the nine tankers. The contractor is also responsible for performing routine and preventative maintenance to ensure the ships' continued effective operation and preserve their condition.

Prior GAO Work

In August 1973, we evaluated the Navy's decision to contract for the nine tankers to be built and then chartered. Our report noted that, under the lease, the government would pay more than double the nine ships' purchase price. Navy officials then indicated that the Navy would have preferred to purchase new ships but entered into the leasing agreement because it had been unsuccessful in obtaining congressional approval of the purchase funds. We also reported that the Navy had not been required to, and did not, obtain congressional authorization and approval to lease the ships for 20 years and commit the government to expending hundreds of millions of dollars in Operations and Maintenance funds. However, we believed that the magnitude of funds involved clearly warranted congressional input to the decision-making process.

Earlier MSC Recognition of Maintenance Problems

While we did not review the previous contract period, we found evidence that MSC was aware that the condition of the ships had both begun to deteriorate under the fixed-price contract with the first contractor as early a 1986 and continued to deteriorate throughout that contract's 5-year term.

In this regard, an MSC "Point Paper" dated January 26, 1986, noted that, approximately 6 months into the contract, the first contractor was neglecting to fund ship maintenance and repair in an effort to maximize profit or minimize losses. The "Point Paper" related this neglect to the fixed-price nature of the contract. According to a November 28, 1988, MSC memorandum on lessons learned from the first fixed-price tanker contract, "...The maintenance, repair, and physical condition of the Sealift Tankers have suffered greatly under the [first contractor's] fixed-price contract. We estimate that it will cost MSC $3-5 million per ship to reinstate the condition of the ships at contract turnover." Internal MSC reports in November 1988 also stated, "In a fixed-price operating contract it is not in a contractor's interest to perform up to MSC's standards and it is nearly impossible to make him do so. It is self-evident that the follow-on contract should not be a fixed-price operation and maintenance contract."

Further, in January 1989, an internal MSC report described the Sealift Antarctic as a fire and safety hazard and lacking in maintenance. Sealift Caribbean reports stated, "Mission reliability is questionable." "If a fire occurs it is doubtful it could survive, there would be a loss of ship, cargo, and possibly human life." The reports continued, "It was obvious the operating per diem being given to the contractor is not spent on maintenance and upkeep." An internal MSC review of the Sealift Indian Ocean reported, "It is a complete waste of money to install equipment and reimburse the contractor for its maintenance if the equipment is deliberately neglected."

However, the contractor did not respond to contract discrepancy reports for any of the ships, and MSC did not enforce the contract provisions.

Lack of MSC Oversight of Preventative Maintenance Resulted in Deteriorating Conditions

IMC, the current contractor, has not fully complied with, and MSC has not enforced, the preventative maintenance requirements of the contract. The poor condition of the ships has resulted in operational deficiencies that adversely affected the safety of the ships and their ability to perform assigned missions. Further, the ships' conditions have deteriorated to the extant that MSC has spent approximately $20 million of the $256 million contract cost to (1) upgrade the condition of the ships and (2) employ individuals on the ships just to wipe up excess oil.

Contract Maintenance Requirements Not Always Followed

The contract for the operations and maintenance of the Sealift tankers requires the contractor to ensure that all equipment and machinery on the ship be maintained in the highest states of readiness. More specifically, the contractor is required to maintain the ship's equipment and systems so as to provide continuing operation, prolong the life and preclude the breakdown of all machinery, and prevent undue equipment overhauls and need for excessive corrective maintenance. However, MSC did not effectively ensure that the contractor was providing preventive maintenance.

Contractor's Lack of Preventive Maintenance

At the inception of the IMC contract, MSC established the Shipboard Automated Maintenance Management (SAMM) system to be used on board each of the Sealift Tankers. The system was to direct the contractor to periodically perform mandatory tests, inspections, and maintenance actions on both equipment and systems. The contract requires that the contractor both provide monthly reports of completed maintenance actions and keep on board a written record of tests, inspections, and maintenance conducted.

According to MSC records, the contractor repeatedly did not follow the SAMM system and did not always submit monthly reports. For example, MSC contract discrepancy reports were not submitted. Moreover, other records showed discrepancies between preventative maintenance reported to MSC and that recorded on the ships: monthly reports to MSC showed that numerous actions had been taken, but the ship's preventative maintenance records did not reflect these actions. For example, one Captain told us that since he did not know how to use the SAMM system, he did not implement the maintenance schedule.

At one point, contractor noncompliance caused MSC to memorialize its complaints. An MSC contracting official wrote to the contractor, pointing out that the contractor had failed to complete required monthly preventative maintenance. Further, according to the message, the lack of contractor's performance in preventative maintenance had been a continuing problem with all the ships, and the ships had not received the preventative maintenance for which MSC had paid.

Many of the crew members we interviewed on three of the Sealift tankers complained about the lack of preventative maintenance and the poor condition of equipment on the ships. According to one Captain, the lack of necessary preventative maintenance was dangerous, and not having emergency equipment was a "crime." He also indicated that the contractor had not provided adequate absorbent pads to help contain oil spills. According to a seaman on the same ship, there was very little maintenance, rust all over the ship, and inadequate amounts of cleaning supplies. He related that 3 weeks prior to our interview, cargo boom cables had snapped because they were so brittle. Another seaman on the same ship related that the company [IMC] was spending "zero" on maintenance, which resulted in potential safety problems. He said that repairs were needed on brakes, winches, frozen hoses, pump valves, and metal decking grates. Moreover, a seaman from another ship told us that the amount of maintenance on that ship "was just enough to keep the boat afloat."

Lack of Adequate Maintenance Causes

Operational Problems

According to the contract, IMC is required to maintain the ship's readiness for all operational requirements. One important operational capability, especially during wartime and other emergencies, involves the the ability to refuel other naval ships at sea. To ensure that the tankers maintain this capability, the contract stipulates that IMC must maintain refueling-at-sea equipment on each ship in good order and conduct quarterly refueling-at-sea training sessions. The contractor is also required to perform quarterly testing of refueling rigs that are attached astern of the tankers. However, MSC inspection reports indicate that the refueling-at-sea equipment on many of the tankers was frequently inoperable. Many of these reports showed that components of this equipment were either frozen in place by rust or corrosion or that critical parts are missing.

These deficiencies adversely impacted the ships' capability to meet their mission. In this regard, during Operation Desert Storm, two of the tankers (Sealift Mediterranean and Sealift Caribbean) could not perform this important function when called upon because of inoperable refueling-at-sea equipment. Only within the past 1.5 years has MSC begun to fund needed repairs to these systems.

Further, failure to maintain the tankers led to additional costs, which were not covered by the contract, called "material condition upgrade." These upgrades included repairing machinery, replacing certain navigation equipment, and refurbishing winches. MSC records indicate that at various times between August 1991 and February 1993, each of the nine ships received unanticipated material condition upgrades and were out of service while being upgraded. During this time, they were unavailable to meet their mission objectives.

Unsafe Conditions

MSC did not inspect each ship quarterly as required by its Standard Operating Manual. Nevertheless, MSC records disclose numerous instances of unsafe operating conditions aboard the nine Sealift tankers.

These unsafe conditions included leaking oil; leaking fuel lines and fuel pumps; inoperable lifesaving equipment including life boats; poorly maintained or inoperable fire stations; deteriorated, damaged, or missing railings on the ship's weather decks; and improperly stored chemicals and lubrication oil. For example, we found life boats that could not be lowered and one life boat was missing its drain plug. Further, the fire extinguishers on one ship were not operable and safety and medical kits were missing.

Crew members on one tanker also complained to us that a lack of gloves, boots, and respirators created health hazards for the crew when cleaning cargo tanks. They frequently experienced nausea, running eyes and noses, and dizziness. Some crew members showed us blisters and burns on their feet resulting, they said, from the lack of protective equipment.

However, one of the most serious recurring problems involved excessive oil leaks from machinery aboard the ships. This created slippery conditions and fire hazards. For example, during an inspection of the Sealift Arabian Sea's engine room, an MSC inspector reported that a film of oil covered the decks, overhead areas, electrical boxes, and circuit boards. In another example, an MSC inspection of the Sealift Arctic revealed numerous safety deficiencies, including 4 inches of fuel oil and water in the pump room bilges.

Although the MSC Standard Operating Manual requires MSC to inspect each vessel at least four times a year, MSC failed to fulfill this responsibility. Between contract award in April 1990 and September 16, 1992, MSC conducted only 29 inspections. [Note: At 4 inspections per year times 9 there should have been 72 inspections between the period of April 1990 and April 1992. ] The frequency of these inspections differed from ship to ship. While MSC inspected one ship six times during this period, it inspected another ship only once. Consequently, many of the previously mentioned unsafe conditions went unnoted by MSC officials.

Lack of MSC Follow-up of Problems Noted

The limited number of MSC inspection reports reflected serious problems with the operation and maintenance of the ships. However, MSC took little or no actions to enforce the provisions of the contract and to require corrective action of problems found during these inspections. The following examples demonstrate the problems cited in MSC's 1990-92 inspection reports and MSC's lack of follow-up:

Our review of U.S. Coast Guard inspections also disclosed numerous instances of reported deficiencies not all of which were corrected in a timely fashion. Further, although between August 1991 and February 1993 all nine tankers received material condition upgrades at MSC's expense, owner inspections between October 1993 and March 1994 disclosed that serious problems remained.

Tanker Debacle Part Two