As part of the Navy's effort to dismantle its outdated ships, Baltimore Marine Industries Inc. has won a $4.1 million deal to scrap seven ships, a Navy spokeswoman said yesterday.

The ship-breaking job is BMI's second since it was chosen as one of four companies to dismantle U.S. ships under a federal pilot program that began last year. The Sparrows Point shipyard finished dismantling the USS Patterson this year for $4.2 million.

"It's a welcomed piece of news at this time of the year," said David Cassidy, BMI's president. "It's going to mean employment of 40 to 60 guys for the next three to four months."

Cassidy said BMI, which has 550 employees, will recall idle workers to dismantle the ships. Four ships will be towed next week from Norfolk, Va., and three from Philadelphia the following week.

The ships, all of which have wooden hulls, were used as minesweepers. Cassidy said he did not know how old the vessels are.

In this latest round of ship-breaking orders, BMI's competitor on the East Coast, Metro Machine Corp. of Norfolk, won a $2.8 million deal to dismantle a steel-hulled cruiser.

Under the pilot program, the Navy awarded contracts to four companies in September 1999 to scrap ships stored on the East and West coasts. Metro Machine and BMI compete for ship-scrapping jobs on the East Coast, and International Shipbreaking Ltd., based in Brownsville, Texas, and Ship Dismantling and Recycling Joint Venture of San Francisco compete for West Coast ship-scrapping jobs.

Before the government began the program, the Navy sold decommissioned vessels to companies that often dismantled them overseas, without labor or environmental oversight, and then sold the leftover metal on the scrap-metal market for a profit. Under contract terms, the ship-breaker is responsible for finding a buyer for the scrap metal, but proceeds from the sale go to the federal government.

Congress has more than doubled funding for ship-scrapping operations, from $15 million for the fiscal year that ended Sept. 30 to $38 million for the current fiscal year.

The ship-scrapping jobs are awarded through competitive bidding by the Naval Sea Systems Command and are administered by the Navy's Inactive Ships program office. Industry officials estimate that about 60 ships are in line for scrapping.

Democratic Sen. Barbara A. Mikulski of Maryland, who fought for the increase in ship-scrapping funds in Congress this year, said through a spokeswoman that she is "proud that BMI has won another ship-scrapping contract. It's a tribute to their first-class work force and proven track record in dismantling ships."