Close to 100 workers are starting the year without jobs.
"It's hurtful. It's really painful," said Steve DiLeo, CEO of the Mare Island Dry Dock Company.
MIDD, a commercial dry dock company providing repair and other services to the maritime industry since 2013, employed more than 80 full-time union and non-union staff, the city said. It has two dry docks, which are spaces that a ship can be parked in and have water drained from, allowing work to be done. Mare Island also has berthing facilities and crane services.
"The company has been a significant contributor to the local economy, supporting jobs and generating economic activity for Vallejo, Solano County, and the surrounding region," according to the city.
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DiLeo is still searching for answers after the U.S. Coast Guard rejected the company's bid. MIDD has been the primary resource of dry-docking repair for the Coast Guard's icebreakers.
"The Healy is one icebreaker, and the Polar Star is the other. We've dry-docked and repaired the Healy on its last two events, which were over the last five years. (They were) successful contracts, on time. We've done the Polar Star, which is, so to speak, a sister ship. We've done that for five years in a row," DiLeo said.
For the last 12 years, the Mare Island Commercial Dry Dock company has been a significant contributor to Vallejo and Solano County. Now, the city says it is left looking for new federal funding and investments to keep operations on the island.
The Mayor of Vallejo said the city is focused on keeping the maritime industry on the island.
"It has been a difficult year for Solano County. We had the Anheuser-Busch and Valero closures as well. And the one thing that is coming out of that, is that is a very unifying moment where we are coming together to figure out how to support our workers," said Vallejo Mayor Andrea Sorce.
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The City of Vallejo confirmed it is coordinating with the Solano County Workforce Development Board to ensure workers have access to job search assistance, retraining programs and other resources.
"I want the community to know -- and the workers and their families to know -- that everyone is working around the clock on this and making sure that the workers are supported and the business is supported and community is supported," Sorce said.
Sorce said a consultant firm recently hired by the city council, the Roosevelt Group, was tasked to support maritime opportunities, particularly on Mare Island.
In 2024, U.S. Rep. John Garamendi, D-Fairfield, was among the lawmakers to introduce the SHIPS for America Act, which if passed will boost the shipbuilding and repair industry. The congressman has also secured millions to invest in Vallejo's maritime operations.
The move is another blow to Mare Island, a postcard-worthy parcel formerly owned by the Navy that has sputtered and stalled in reaching any newfound economic boom despite the city's best wishes.
In a statement, Garamendi said: "The Mare Island Dry Dock Company has continually reconditioned, rebuilt, and repaired the heavy icebreaker, the Polar Star, every year when it returns from Antarctic. So, the company has a very good track record with the Coast Guard. Doesn't make any sense to me. We're going to find out what's going on, and it appears as though the layoff notice is directly related to this issue."
Garamendi is sending a letter to the federal government, demanding an explanation.
"Mare Island had the low bid, about $9 million. The high bid was Vigor up in Seattle, about a million dollars more, $10 million-plus. And the Coast Guard chose the high bid. And I'm going, 'What the hell is going on here?'" Garamendi said.
DiLeo views this as a political decision that is putting many people's livelihoods at risk.
"It's quite disturbing," said DiLeo, but he is not losing hope. "The contract could be overturned. A maritime administration or Navy could bring work into our shipyard."
The Coast Guard released the following statement in response to the dry dock layoffs:
"On December 11, 2025, the Coast Guard awarded a contract to provide dry dock repairs for Coast Guard Cutter HEALY, a medium icebreaker. These repairs are essential to ensuring the vessel can safely and effectively support operations in the U.S. Arctic Region and advance national security objectives. Following a competitive procurement process conducted in accordance with federal acquisitions regulations, Vigor Marine Group was determined to provide the best value to the government based on the Coast Guard's stated technical and performance requirements. Federal law prohibits the disclosure of contractor bid and proposal information."
Bay City News contributed to this report.
Editor's Note: The story previously stated that the city of Vallejo announced the closure of Mare Island Dry Dock. This has since been clarified that the dry dock is conducting layoffs and will not be closing.