Please ensure Javascript is enabled for purposes of website accessibility

HII division lands $6.7B Air Force contract

The U.S. has awarded ‘ McLean-based Mission Technologies division a $6.7 billion to provide electronic warfare engineering and technical services support, according to a Thursday announcement from the contractor. 

The indefinite-delivery, indefinite-quantity contract is the largest Mission Technologies has yet landed, according to . 

“We have a team of subject matter experts with deep expertise in all aspects of electromagnetic spectrum and electronic warfare, and we are committed to staying a step ahead of our adversaries alongside our customers as the complexity of warfare changes,” Andy Green, HII executive vice president and president of Mission Technologies, said in a statement.

Additionally, HII announced Wednesday that it had entered into a definitive agreement to acquire substantially all of the assets of W International SC and Vivid Empire SC. Collectively known as W International, the South Carolina complex metal fabricator specializes in manufacturing structures, modules and assemblies.

Aerial shot of manufacturing facility that sits next to water.
W International facility in South Carolina. Photo courtesy HII.

A spokesperson for HII declined to provide terms of the deal. 

After the closes, the manufacturing facility in Goose Creek, South Carolina, will operate within HII’s Newport News Shipbuilding division. The site will support construction of nuclear-powered submarine and aircraft carrier modules and structures for programs. NNS is one of only two U.S. shipyards capable of designing and building nuclear‐powered submarines.

“Substantially all current employees will be offered positions with HII to continue to work on-site,” the release stated.

“HII is committed to increasing build rates for our customer, and this investment in capacity alongside the Navy will help us do that,” said HII President and CEO Chris Kastner. “It lets us efficiently add trained talent and state-of-the-art manufacturing capabilities to the urgent job of building ships.”

The acquired assets include advanced production facilities that are located on a leased 45-acre site with more than 480,000 square feet of manufacturing space as well as barge and rail access.

The facility in South Carolina will be known as Newport News Shipbuilding – Charleston Operations.

Matt Needy, currently Newport News Shipbuilding’s vice president and chief transformation officer, will become general manager of the site. The transaction is expected to close in the fourth quarter of 2024, subject to regulatory approvals and other factors.

Newport News-based HII is the nation’s largest military shipbuilder and the largest industrial employer in Virginia. The company employs more than 44,000 workers. The Mission Technologies division has more than 7,000 employees and more than 100 facilities globally. HII reported $11.5 billion in revenues for 2023.

As bitcoin breaches $100K, MicroStrategy holdings, Saylor’s wealth surge

MicroStrategy, the -based tech company chaired by whale , has pursued bitcoin as an investment strategy since 2020. Now, it appears to have paid off as bitcoin breached the $100,000 threshold.

Bitcoin rose above $100,000 per coin Wednesday night, after previously breaching $99,000 on Nov. 21. At 11:45 a.m. Thursday, bitcoins were trading for $101,293.94, according to Coinbase, the nation’s largest exchange, although the cryptocurrency had breached $103,000 earlier in the day.

As of Dec. 1, and its subsidiaries held approximately 402,100 bitcoins, which were worth $40.37 billion at 11:45 a.m. The company’s 402,100 bitcoins were purchased for approximately $23.4 billion, and at an average purchase price of $58,263 per bitcoin, including fees and expenses.

At 11:45 a.m. Thursday, MicroStrategy shares were trading for $402.78, although shares were trading for $439.60 at market open. The ‘s value has been climbing since September, up from  $114.30 on Sept. 6 and reaching a six-month high of $473.83 on Nov. 20, the first time bitcoin came near the $100,000 mark.

Now the world’s largest corporate holder of the cryptocurrency, MicroStrategy announced its first bitcoin purchase in August 2020, making it one of the first public companies to convert its cash treasury reserves into cryptocurrency as a store of value. Since 2020, MicroStrategy has bought bitcoin about 42 times, Saylor said on CNBC’s “Squawk Box” on Tuesday.

Between Nov. 25 and Dec. 1, MicroStrategy bought approximately 15,400 bitcoins for about $1.5 billion in cash, averaging about $95,976 per bitcoin, including fees and expenses.

Saylor, who has made bold pronouncements and statements about bitcoin in the past, in September told CNBC that he thought the cryptocurrency could rise as high as $13 million per bitcoin by 2045, a prediction he repeated Wednesday on Fox Business.

“Digital capital is what happens when your long-term store of value goes from a building, or goes from a portfolio of stocks, to a digital asset like bitcoin. Bitcoin represents the digital transformation of hundreds of trillions of dollars of capital in the world,” Saylor said on Fox Business.

Appearing on CNBC’s “Squawk Box” on Tuesday, Saylor said Microsoft could add up to $4 trillion to its valuation by investing in bitcoin.

As of Sept. 30, Saylor held more than 19.998 million Class A shares of MicroStrategy, 9.9% of the company’s Class A stock. As of 11:45 a.m., his shares were worth a total of $8.05 billion.

He’s also put his own money where his mouth is. In October 2020, Saylor said in a tweet that he held 17,732 bitcoins. In August, Saylor said on Bloomberg Television he owned about $1 billion worth of bitcoin and continued to buy more. On that day, bitcoin was trading around $56,000.

The bitcoin rally began with Donald Trump’s presidential election victory, and on Nov. 11, bitcoin breached $87,000 a coin. At 7 p.m. on Nov. 5, before the election outcome was known, bitcoin was trading for 69,378.53. Although Trump previously called cryptocurrencies a “scam” in 2021, he made pro-bitcoin comments and promises during his campaign, including calls to establish a national strategic bitcoin reserve.

Before bitcoin breached $100,000 on Wednesday, Trump announced he would nominate Paul Atkins, CEO of consultancy Patomak Global Partners, to chair the Securities and Exchange Commission. Atkins was an SEC commissioner from 2002 to 2008 and is a cryptocurrency advocate.

The current SEC chair, Gary Gensler, has announced he will step down on Jan. 20, when Trump is inaugurated. The industry is no fan of Gensler, who has led the SEC to be aggressive in enforcement.

Saylor’s strategy hasn’t always led to fortune. He stepped down as CEO after MicroStrategy’s August 2022 earnings report, when the company disclosed that it had paid a total of $3.977 billion for its bitcoin, which at that time had fallen to a market value of about $2.451 billion. At that point, MicroStrategy also had taken on about $2.4 billion in loans and debt to acquire bitcoin. At points in 2022, the currency fell below $20,000 to prices it had not seen since 2020. Nevertheless, on Thursday, Saylor’s strategy seemed less a part of science fiction and more a result of visionary strategy, though time will tell.

FAA certification clears way for DroneUp to scale up

Virginia Beach-based drone delivery company has received a Federal Aviation Administration certificate that will allow it to grow its delivery operations.

On Tuesday, the company announcedi t received an FAA Part 119 air carrier certificate under Part 135. The certificate allows DroneUp to carry third-party property as an air carrier and to fly up to 5 miles without maintaining a visual line of sight.

“With this certification, and with actual beyond visual line of sight certification,” said DroneUp founder and CEO Tom Walker, “you’re going to see this start to scale very, very quickly, because the cost of doing delivery by drone is not only going to be better and more efficient than some of the other traditional modalities, but it’s safer.”

Previously, DroneUp couldn’t carry cargo owned by others and had to have special arrangements with retailers, limiting their partnerships. Also under the previous Part 107 certification, the company had to maintain sight of the drone, with either the drone operator or a visual observer in contact with the operator watching, and the minimum weather visibility required was 3 miles from the control station.

“It allows us to scale much, much quicker,” Walker said, “and also we can do it more affordably for the customers, because we can fly beyond visual line of sight. We don’t have the additional overhead of the visual observers that we had before.”

DroneUp is the sixth U.S. drone operator to receive a Part 135 Air Carrier Certificate, according to the FAA. The company submitted its initial application in May, Walker said.

DroneUp is beginning operations under the Part 135 certification at its location in Murphy, Texas, near Dallas. The tech company will then work to get FAA approval to append the certification to add other locations, starting with the remaining 10 in the Dallas-Fort Worth area.

“The first thing we’re going to do is we’re going to get all 11 of those locations in the DFW area operating Part 135 … and then after that, we intend to continue to expand across the Dallas-Fort Worth area until we can successfully cover 80% of that area with drones, demonstrate our ability to do that at scale under Part 135, and then we’ll be expanding into another metro area yet to be announced,” Walker said.

DroneUp will start expanding Part 135 operations in the first quarter of 2025, “and if I have my way, we’ll have all of the entire DFW area that we have now operating as Part 135 by the end of Q1,” Walker said, and then start expanding into new Dallas-Forth Worth locations under Part 135 in the second quarter.

Under the previous certification, the Murphy location could serve 6,000 households, but under the Part 135 certification, it will be able to serve 25,000 households, and with fewer personnel, according to Walker.

DroneUp provides delivery services and has conducted several medical supplies delivery projects. The company partnered with Walmart in 2021, and in May 2022, the two announced plans to expand drone delivery services to 4 million homes in six states. In August, DroneUp said it would end Walmart drone delivery in three states to focus on perfecting its service in the Dallas-Fort Worth area.

In August 2023, DroneUp announced it would launch an 18-month project to deliver medical supplies and hypertension medication to patients on the Eastern Shore and Tangier Island, in partnership with Riverside Health System, Old Dominion University and others.

Founded in 2006, DroneUp has about 250 employees, of which about 100 are in Virginia. In August 2022, DroneUp announced it planned to add 655 jobs as part of an expansion that includes establishing a $20 million drone testing, training and research and development center at Richard Bland College in Dinwiddie County.

Dollar Tree CFO stepping down

Dollar Tree is leaving the discount retailer after two years, the company announced Wednesday. Davis will stay through the filing of the company’s fiscal 2024 report to the Securities and Exchange Commission, said.

“We thank Jeff for his service and appreciate the contributions he made to the business during his time with Dollar Tree and Family Dollar. We remain committed to our business strategy and are focused on driving lasting value for our customers and shareholders,” interim CEO Michael C. Creedon Jr. said in a statement.

Davis’ departure comes after former CEO and board chairman Rick Dreiling stepped down in November, citing health issues.

Davis was hired following a C-suite shakeup in 2022, with Creedon coming aboard as , among other hires. Dreiling, too, was hired in 2022, replacing former CEO Mike Witynski.

A graduate of Penn State and the Katz Graduate School of Business at the University of Pittsburgh, Davis was previously treasurer of Walmart and served as for JCPenney as well as Qurate Group, the conglomerate that owns QVC, HSN and Zulily.

Davis’ departure was announced Wednesday alongside Dollar Tree’s third-quarter results and the retailer’s full-year outlook for fiscal 2024; the company said it anticipates net sales of $30.7 billion to $30.9 billion for the year, slightly up from $30.6 billion in revenue reported last year. In the third quarter, consolidated net sales increased 3.5% to $7.56 billion, compared with the third quarter of 2023.

The company has closed approximately 670 of its Family Dollar stores this year, and expects to close 25 more by the end of the fiscal year, and continues to explore a potential sale or spinoff of the Family Dollar business segment, it said Wednesday. A company, Dollar Tree operates more than 16,000 stores in the United States and Canada.

Washington Commanders hire Campbell’s exec as team president

Mark Clouse, and CEO of food giant The , will be the ‘ next team president, the -based team announced Tuesday. Clouse starts his new post in late January.

He replaces Jason Wright, the NFL’s first Black team president, who was hired in August 2020 by former team owner Dan Snyder, who had hired Wright to shepherd the franchise through a difficult period when Snyder and some of the team’s former front office staffers were embroiled in a sexual harassment scandal and NFL investigations related to the team’s allegedly toxic workplace.

In July, the team confirmed that Wright would not be serving as team president during the current NFL season, and that he would serve as a senior adviser until his departure, focusing on securing naming rights for a new stadium.

Clouse comes from the corporate world to the Commanders, which is now owned by billionaire investor Josh Harris, who led a group of investors in acquiring the team for a record $6.05 billion in 2023 from Snyder. Clouse will report directly to Harris.

In October, Campbell’s partnered with Harris and David Blitzer’s management company Harris Blitzer Sports & Entertainment as an official corporate partner to the company’s four professional sports teams — the Commanders, the Philadelphia 76ers NBA team, the NHL’s New Jersey Devils and the Joe Gibbs Racing NASCAR franchise.

“In Mark we have found a dynamic leader with a stellar track record of guiding organizations to excellence, building brands that connect deeply with consumers, and ultimately delivering best-in-class experiences and lasting memories,” Harris said in a statement. “Mark shares our commitment to using the power of the Commanders franchise to bring together. As a military veteran and accomplished business builder, he has a proven ability to strengthen both the organizations he leads and the communities he serves. I am confident in Mark’s dedication to building a championship-caliber organization and to support operations in our drive for excellence on the field.”

Clouse joined New Jersey-based Campbell’s in 2019, overseeing popular food brands such as Goldfish, Rao’s, Pepperidge Farm and the eponymous soup brand. A graduate of West Point, where he was a collegiate basketball player, Clouse served in the Army and retired as a captain. He held positions at Kraft Foods, Mondelez and Pinnacle Foods before working at Campbell’s.

“I am incredibly grateful to and the Washington Commanders ownership group for the opportunity to lead this iconic franchise into a new chapter of growth,” Clouse said. “The Commanders’ passionate fanbase, which has stood by this team for decades, deserves nothing less than our unwavering commitment to excellence. I look forward to supporting ownership, as well as Adam Peters and Dan Quinn, in doing everything in our power to build a championship-caliber organization.”

Navy awards Raytheon potential $903.9M contract

The has awarded , a subsidiary of Fortune 500 aerospace and contractor RTX, a worth up to $903.9 million, if all options are exercised, to provide support for a system, the U.S. Department of Defense announced Monday. 

The initial $34 million firm-fixed-price, cost-plus-fixed-fee, cost-plus-incentive-fee and cost only contract covers design, development, integration, test and maintenance of system capabilities for the design agent and engineering support efforts for the Cooperative Engagement Capabilities (CEC) sensor system. CEC allows data from sensors in different places to provide a single integrated picture, meaning multiple ships, aircraft and land units can share radar target measurements simultaneously in real time.

Purchases for the makes up 65% of the contract. The contract also includes purchases for the governments of Japan (15%), Australia (13%), Canada (6%) and Germany (1%) under the Foreign Military Sales program, which allows the United States’ international partners to purchase defense equipment and services. 

The U.S. Navy will pay $20.54 million of the contract, with $1.7 million coming from the United States . The governments of Japan, Australia, Canada and Germany will pay about $11.8 million with the contract. About $2.89 million will expire at the end of the current fiscal year. 

Work will be performed in St. Petersburg and Largo, Florida as well as Maynard, Massachusetts. Work is expected to be completed by November 2025. If all options are exercised, work will continue through November 2029.

Last week, the Navy awarded Raytheon a $590.8 million contract to produce nine Next Generation Jammer Mid-Band (NGJ-MB) ship sets for the military branch’s EA-18 Growler electronic warfare aircraft and four more sets for the Royal Australian . The NGJ-MB is an electronic attack system.

With more than 185,000 employees globally, RTX reported $68.9 billion in sales in 2023. Raytheon is also based in .

U.Va. Darden School dean reappointed to third term

Scott C. Beardsley, of the ‘s School of Business, has been reappointed to his third term as dean, which starts Aug. 1, 2025, and extends through August 2029, U.Va. announced Wednesday.

Named dean in 2015, Beardsley is now the university’s longest serving current dean and has raised more than $610 million for the school over the past decade, as well as opening a satellite campus in County; hiring more than 60 faculty members; hitting application and enrollment records among women, military veterans, underrepresented minorities, international and first-generation students; and launching the $150 million student housing project on the ‘s grounds. During his tenure, Darden also has been named the top public MBA program in Bloomberg Businessweek (2022-24) and Poets & Quants (2023 and 2024). Beardsley was named U.Va.’s Dean of the Year in 2020.

“I’m grateful for the opportunity to continue to work with the incredible community of the in pursuing our mission to improve the world by developing responsible leaders, and to my wife Claire, and family who have been critical to any success I’ve had,” Beardsley said in a statement. “I am invigorated to continue pursuing progress with all of our stakeholders to ensure that Darden cements its position as one of the best places to learn, teach, research and work in . In a world in which responsible remains at a premium, Darden can be a beacon of hope as we inspire and develop the leaders of today and the future.”

Beardsley added that his focus over the next five years will be on marking the Darden School’s 75th anniversary in 2030, as well as increasing scholarship funding and accessibility, and shepherding the school’s facilities master plan to completion.

Also the Charles C. Abbott Professor of Business, Beardsley holds a degree in electrical engineering from Tufts University, an MBA from the MIT Sloan School of Management and a doctorate in higher education management from the University of Pennsylvania. Beardsley worked for McKinsey & Co. for 26 years in New York City and in Brussels, Belgium. As of this year, he is finishing a part-time master’s in practical ethics at the University of Oxford’s Pembroke College.

 

Van maker repays state grant after Pittsylvania layoffs

Morgan Olson has paid back a $500,000 Virginia Port Authority grant after the Michigan-based manufacturer of walk-in step vans failed to employ an agreed-upon number of workers at its facility at the Industrial Park in .

It’s not the jubilant future economic developers had envisioned when celebrating the company’s October 2019 announcement of plans to invest $57.8 million to bring its operations to a former Ikea facility at the park located outside . At that time, the company, which is a business unit of Texas-based JB Poindexter & Co., expected to create 703 jobs.

By summer 2020, had its 925,000-square-foot automotive manufacturing facility operating in Pittsylvania.

Two years later, the Port of Virginia awarded Morgan Olson a $500,000 Port of Virginia Economic and Infrastructure Development Grant, an incentive designed to encourage businesses to locate maritime-related employment centers in the commonwealth or to expand existing facilities. At that time, the company was well on its way to building its promised workforce in Virginia. The Pittsylvania facility employed 612 workers in October 2022, according to a news report.

But circumstances change. Morgan Olson laid off 435 employees at Cane Creek Centre in 2023 and an additional 130 this August, according to the . Currently, there’s only “limited staff there in the facility,” according to Matt Rowe, director of for Pittsylvania County.

On Sept. 25, Stephen Edwards, CEO and executive director of the Virginia Port Authority, which runs the Port of Virginia, sent a letter to Greg Pairitz, vice and of Morgan Olson, asking for the state grant to be repaid due to failure to comply with “one of more” obligations agreed to in a memorandum of understanding.

“The VPA has determined that Morgan Olson has failed to maintain at least 25 new, permanent full-time positions prior to the performance date of June, 30, 2025,” the letter states.

Edwards gave Morgan Olson 60 days to repay the money. The company repaid the funds on Nov. 20, according to Joe Harris, a spokesperson for the VPA.

A request for comment to a spokesperson for Morgan Olson was not immediately returned.

Rowe on Tuesday remained optimistic about the situation.

“I think the fact that Morgan Olson just came and immediately paid back the $500,000 to Virginia is a very strong testament to them as a company,” he said. “I think it also speaks very strongly to their financial well-being and [to] their commitment to Virginia.”

Rowe speculated that the Morgan Olson facility could have a second chapter. “There’s certain contracts that can’t be publicly discussed that Morgan Olson is negotiating,” he says.

If the Cane Creek facility isn’t occupied by the van maker, Rowe suggested JB Poindexter & Co. could find another use for it.

“The value proposition to the parent company is just too strong for them to not utilize that space,” he says.

In regular talks with Morgan Olson leaders, Rowe said, “they have stressed over and over again that they’re committed to this community, to this facility.”

Rowe speculated that the layoffs were due to Morgan Olson losing a key client. The popularity of electric vehicles and high interest rates, he thinks, could also have impacted customer demand for the company’s custom commercial step vans.

“When the interest rates are high, you tend to make do with what you have, or repair what you have, instead of going and buying something,” he says.

A 2019 announcement about the facility noted Morgan Olson was eligible for several state and local grants, including a $7 million custom performance grant from the General Assembly’s and $1.195 million from the Tobacco Region Opportunity Fund.

Jordan Butler, public relations director for the , said on Wednesday that the commission paid $770,775 of those funds to Morgan Olson in May 2024 for creating 561 jobs. Company leaders could have requested the remainder of the funds at the end of September, he noted, if they had created 703 jobs at the Pittsylvania County facility. 

The commission changed grant agreements several years ago, Butler added, to require that the created jobs are maintained throughout the performance period and are only dispersed once at the end of the performance period. “So good news is that that this situation couldn’t occur again,” he said.

A spokesperson for VEDP did not immediately respond to a request for comment Tuesday.

Editor’s note: This story has been updated to include information about the Tobacco Regional Opportunity Fund. 

Dominion Energy COO Diane Leopold to retire after nearly three decades

Dominion Diane Leopold plans to retire from the utility this summer after working for nearly four decades in the industry.

Leopold, who will remain as and executive vice until she steps down on June 1, 2025, oversees major construction projects such as Dominion’s $9.8 billion Coastal Virginia Offshore Wind project and Charybdis, the first U.S.-built wind turbine installation vessel.

In the coming months, Leopold will transfer utility and contracted energy duties to Ed Baine, president of Dominion Energy Virginia, and Eric Carr, Dominon Energy’s chief nuclear officer.

Leopold, who earned a master’s degree in electrical engineering from and an MBA from , got her start with Dominion as a power station engineer in 1995. Previously, she led Dominion’s gas infrastructure group, was vice president of financial management and business planning, and served as senior vice president of Dominion Transmission. Prior to joining Dominion, she held engineering positions at Potomac Electric Power.

Leopold sits on the boards of Nuclear Electric Insurance Limited, a mutual insurance company with headquarters in Delaware, and of Markel Group, the Fortune 500 insurance company based in Glen Allen. She is also a board member of the Jamestown-Yorktown Foundation and the World Pediatric Project.

“Diane is one of the brightest, most dedicated, and most capable people in our company and in our industry,” Dominion Energy Chair, CEO and President Bob Blue stated in a news release. “Over her 36 years in the utility industry, she’s demonstrated best-in-class performance in nearly all areas of operations, business development, financial planning [and] corporate strategy, as well as the construction of several multibillion-dollar energy infrastructure projects. … When she retires in June, she’ll leave behind a deep and capable bench of talented leaders, including Ed and Eric, due to her deliberate focus on developing her team members.”

Baine’s new title will be president of utility operations and Dominion Energy Virginia. He will continue overseeing operations of

an electric utility serving 2.8 million accounts in the commonwealth and northeast North Carolina. Starting Jan. 1, 2025, Baine will assume additional responsibilities for Dominion Energy South Carolina, which serves 800,000 electric utility accounts and 500,000 gas utility accounts. Keller Kissam, president of Dominion Energy South Carolina, will report to Baine.

Baine joined Dominion in 1995 as an associate engineer after graduating with a degree in electrical engineering from . He has held numerous positions at the company, including senior vice president of distribution, power delivery group and senior vice president of power delivery for Dominion Energy Virginia.

As chief nuclear officer and now president of nuclear operations, Carr will continue to be responsible for the company’s nuclear operations at four stations in three states. On Jan. 1, 2025, Carr will take responsibility for the utility’s contracted energy business segment, which includes Millstone Power Station, a nuclear power plant in Connecticut, long-term contracted solar generation assets and a renewable natural gas portfolio.

A man wearing a gray suit and navy blue tie.
Eric Carris is president of nuclear operations and chief nuclear officer. Photo courtesy Dominion Energy.

In March, Gov. Glenn Younkin appointed Carr, who has an engineering degree from the University of Delaware and an MBA from Widener University in Pennsylvania, to the board of the Virginia Consortium Authority.

Carr joined Dominion Energy in 2023. Previously, he was president and chief nuclear officer for PSEG Nuclear in New Jersey. There, he oversaw 1,600 employees and operations at the Hope Creek and Salem nuclear generating stations.

Dominion Energy provides regulated electricity service to 3.6 million homes and businesses in Virginia, North Carolina and South Carolina, as well as regulated natural gas service to 500,000 customers in South Carolina. The company also develops and operates regulated offshore wind and solar power. Dominon Energy, which boasts 17,000 employees, reported $14.4 billion in revenue for 2023.

BAE Systems wins up to $238M Navy ship repair contract

Falls Church-based Systems Inc. has won a worth up to $238.8 million to maintain, modernize and repair a San Antonio-class amphibious transport dock ship.

The announced the $212 million firm-fixed-price contract award, which has options that would bring its cumulative value to $238.8 million, to the U.S. arm of British giant on Nov. 25.

BAE Systems Inc.’s San Diego unit will work on the USS Green Bay (LPD 20) in San Diego, and work is expected to be completed by October 2026.

The USS Green Bay was commissioned in 2009 and is the second Navy ship to be named for Green Bay, Wisconsin.

BAE Systems has about 41,000 employees worldwide and reported $13.6 billion in 2023 revenue. In addition to its California shipyard, the company has one in Norfolk and one in Florida. Its Norfolk shipyard team received two Navy contracts in mid-October worth a combined $202 million for the maintenance, modernization and repair of two vessels.