Shipyards

Understanding the Realities of Yacht Refit

5 November 2021By Kate Lardy
Pendennis refit yacht Adix in construction hall
Courtesy of Pendennis

Written by

Kate Lardy

Based in Fort Lauderdale, freelance writer Kate Lardy got her start in the yachting industry working as crew. She spent five years cruising the Bahamas, Caribbean, New England, and Central America, then segued that experience into a career in marine journalism, which has included stints as editor of Dockwalk and ShowBoats International.

A 1967 Camper & Nicholsons yacht came to a South Florida yard for a six-month, one-million-dollar refit. Six million dollars and one year later, it’s still there. The reasons for the overrun are many: a growing work list prompted by discoveries along the way, not to mention the challenge of sourcing parts for equipment whose manufacturers are long since out of business.

Delays with boats of all ages are common. While sometimes unavoidable, it’s possible to minimize them with a lot of pre-refit investigation and planning, good communication, and prompt decision-making on the job. Dockwalk spoke to top refit yards from San Diego to Ancona about their biggest challenges and their advice for captains on preparing for and managing a project to finish it on time and on budget.

Know Before You Go

“When the plans and specifications are detailed, clear, and without significant errors or omissions, the project is much more likely to be on time and within budget,” says Judy Salzman, project administrator at Thunderbolt Marine in Savannah, Georgia.

Having the most comprehensive specification from the start is the number one piece of advice from every yard. As Vincent Escallier, commercial director of MB92 La Ciotat, says, “The earlier you begin the quotation process and the more detail provided in the scope of work, the better.”

Courtesy of Roscioli

This won’t guarantee a good project, points out James Brewer, who until very recently was head of business development at Derecktor Shipyards, but is now joining Roscioli Yachting Center as managing director. But the opposite is certainly true: “A bad specification is guaranteed to create misery. The more effort expended before the project on inspection, engineering, planning, and logistics, the better scope-creep can be handled,” he says.

Shipbuilding and repair giant Fincantieri, which mostly deals with 80-plus-meter yachts, says that these larger vessels tend to be better prepared, having the benefit of technical management.

“A bad specification is guaranteed to create misery. The more effort expended before the project on inspection, engineering, planning, and logistics, the better scope-creep can be handled,” he says.

On the other end of the spectrum, yachts in the 80- to 100-foot range can be the least organized, says Dan Bornarth, assistant vice president of operations at Bradford Marine. “There tends to be a greater growth in the scope of work once the yard period begins, which then in turn changes timelines.”

Expect the Unexpected

Scope-creep happens. “There is always the unforeseen,” says Phil Vitale, business development manager at Roscioli, “especially on older vessels.”

You can’t determine the condition of the sub-deck without ripping up the teak. But figuring out ahead what surprises may be in store and allowing time for these will go a long way towards managing the owner’s expectations. Fincantieri calls the growth in work scope inevitable and expected, especially on major refits of larger boats. Giuseppe Palumbo, CEO of Palumbo SY Refit, which has shipyards in France, Italy, and Malta, agrees. “Thanks to the vast experience we’ve acquired, usually we can predict such circumstances.” With this foresight, yards can help keep a project on track. “Most established yards can absorb significant work growth without major schedule changes,” says Fincantieri, “[but] there’s a limit, especially if spare parts and materials with long-lead procurement are needed for the additional jobs.”

Courtesy of Palumbo

Indeed, “Identifying long-lead items and supply chain challenges as early as possible is really important,” says Toby Allies, joint managing director of Pendennis in Falmouth. Especially with the pandemic affecting supply chains worldwide.

Brewer suggests asking “what if” questions, while considering the worst-case scenario: “Review the work list with the end in mind: what happens if a long-lead time component gets damaged or is not repairable — shaft seals, valves, bearings, etc. Have a contingency plan or procure parts in advance of the yard period.”

What’s Essential?

Start by asking yourself what you want to get out of the refit, what is the main scope of work, says Daniele Di Giampaolo, technical & sales director at Amico & Co. in Genoa. “Additional wish lists can usually be accommodated but the main works will dictate the main refit timeframe and the facilities necessary.”

“Have a contingency plan or procure parts in advance of the yard period.”

“Be clear on the scope and the priority of work by separating required work items from those that do not take precedence,” adds Eric Lundeen, director of operations at Marine Group Boat Works.

“Anything that prevents a vessel from operating safely must be prioritized,” says Bradford’s Bornarth. “Additionally, things that affect the integrity of the vessel should not be postponed, such as water leaks, tank coatings, exterior paint coatings, etc.; when these are left unattended they will end up being very costly to repair and will ultimately decrease the overall value of the asset.”

Courtesy of Fincantieri

On top of any mandatory works, any big job that will determine the critical path, like full paint, teak decks, interior work or extensions, needs to be considered a priority, says Escallier at MB92. “This will form the first stage of the quotation process. The second stage involves nonessential works that can be carried out during the set timeframe.”

Understand the owner’s expectations when it comes to quality, time, and cost, says Brewer. “If quality is a given, then prioritizing timeframe will potentially compromise budget, or prioritizing budget will potentially compromise schedule.”

Play to Strengths

“Not all shipyards are created equal and each has its specialties. Don’t expect a great result if the shipyard is drawn far from its core competencies,” Brewer says. Palumbo agrees, “Carefully selecting the shipyards to rely on can pay off.”

Understand the owner’s expectations when it comes to quality, time, and cost, says Brewer. 

“A very common mistake is to presume that anybody in the refit field is able to assure the resources necessary to perform the project; a second mistake is to not verify this important aspect,” says Di Giampaolo. “There are many set-ups ... which are essentially refit brokers, very often providing only facilities, and sometimes not even these, and once they have the business contract, they quickly search for subcontractors to perform the job on their behalf, often offering a very low price.” He calls a major refit in a custom yard akin to a two-year new-build project.

Courtesy of STP

Who’s in Charge?

After the initial planning and meetings with the yard, when the project gets underway, it progresses fast. Unless a decision needs to be made and there’s no one to make it — then it can come to a grinding halt. “Unclear decision-making process and communication are the common elements that have created program delays in the past,” says Allies. 

“...Due to time constraints, the daily presence — whether virtual or physical — of the owner’s technical supervisor is fundamental in assisting the yard with real-time decisions.”

Enabling a representative on the ground to make decisions will avoid delays, Di Giampaolo says. “Whether that be your captain, technical management, or a dedicated independent project manager… It is absolutely essential to be able to get a rapid response from the owner’s team in order to avoid unnecessary downtime. Due to time constraints, the daily presence — whether virtual or physical — of the owner’s technical supervisor is fundamental in assisting the yard with real-time decisions.”

Project Management

At STP Shipyard Palma — an open yard where yachts choose the companies they want to work with — the challenge becomes coordinating between companies. Sometimes the vessel’s captain will handle this to save the cost of a project manager. And therein lies the problem.

STP Production Manager Carlos Albons Llompart advocates for using a project manager. “When the timing with separate projects is not handled properly, this causes a delay for the projects to be closed and it sometimes has a chain effect that ends up delaying the launching or departure of the vessels,” he says.

Courtesy of Amico & Co.

Crew Are Essential Workers

Yards love crew. Bornarth at Bradford calls them critical to a project’s success. “Knowing the boat quite well, they can be of valuable help to our team, making the whole process smoother and faster,” Palumbo agrees.

He’s even seen a trend: “Vessels with regular crew on site typically experience a smoother yard period.”

When a key crew position leaves mid-project it can throw off the whole schedule. Marine Group Boat Works includes disruptions due to crew rotation or turnover as one of the top challenges the yard faces in completing a project on time. “What one captain or engineer wants or understands of the objective can vary from the next, so oftentimes this creates confusion from a yard’s standpoint,” says Lundeen. He’s even seen a trend: “Vessels with regular crew on site typically experience a smoother yard period.”

Staying on Budget

To keep on budget, Brewer recommends a continuous review of percentage of completion versus percentage of money spent. “Project management tools are good at determining how much money has been spent to date versus the budget; however, it takes real experience to see that 80 percent of the money has been expended and the job is only 50 percent done.” He suggests the captain and shipyard project manager meet regularly from the start of the job to verify and agree how much has been completed. “The sooner the slippage can be identified the earlier efforts to mitigate can be started,” he says, adding that quantifiable standards to judge the completion level are particularly important for paint and cosmetic projects.

Marine Group Boat Works has another tip: find a yard willing to fix-price work items so they absorb the financial risk and there are no surprises in costs.

Courtesy of Marine Group Boat Works

Get Real About Potential Delays

The reality is there are countless reasons why you might not splash on the intended day. Consider this at planning and build in contingencies then, advises Fincantieri. Di Giampaolo recommends factoring at least 10 percent for the unexpected.

“We deal in reality,” says Vitale, whose approach stems from 45 years in the business. “There are only so many coats of varnish you can put on in a day, in a week. We have to deal with parts being delayed, shipments from overseas being stuck in customs, or [a part having] to be fabricated when it can’t be found. We have to deal with subcontractors that don’t show up when they say they will. We have to deal with a team member having a baby, for example. That’s reality.”

Manpower is a common stressor. Yard work in busy periods between cruising seasons will have yachts jostling for a finite number of skilled laborers. 

Manpower is a common stressor. Yard work in busy periods between cruising seasons will have yachts jostling for a finite number of skilled laborers. “You’re at the mercy of subcontractors in this business, which is why we try to do everything ourselves, but there is only so much a shipyard can do,” Vitale says. “We have our key subcontractors ... loyal to us and we’re loyal to them, so they usually perform for us. But things happen.”

In open yards like Lauderdale Marine Center and STP Shipyard Palma, where the captain is dealing with subcontractors directly, make sure the company chosen has enough staff to handle the project within your timeframe, advises Llompart at STP.

In the end, the pressure goes both ways. The yards feel your stress and they strive to get you out when you have to be. “We all do the best we can,” Vitale says. Escallier at MB92 seconds that: “We are in the service industry, so it’s our job to move heaven and earth to make it happen.”

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