But why isn't the Navy doing this themselves? Surely they have the manpower & capability and there must be huge sections that can easily be re-used.
Hah! The Navy has no manpower any more; certainly not for construction and demolition. The Navy doesn't build aircraft carriers; why should they dismantle them? Everything that is done except direct warfighting and readiness for warfighting is farmed out.
On August 14 1945, the Navy had in active service 23 battleships, 28 fleet carriers, 71 escort carriers, 72 cruisers, 377 destroyers, 361 frigates, and 232 subs: a total of 6786 ships, including auxiliaries. The total personnel strength was 3.4 million. Uniformed personnel cooked the meals, drove the trucks, loaded ammunition and fueled the ships, etc.
On September 30 2006, the Navy had 0 battleships, 12 carriers, 27 cruisers, 54 destroyers, 35 frigates, and 74 subs: a total of 318 ships including auxiliaries. The total personnel strength was 0.35 million. Meals, truck driving, loading and fueling, etc, are all performed by hired service companies - just like for the Army and doubtless the Air Force (not entirely sure about the Marines, but probably them too).
The size has shrunk considerably since 2006. This despite having twice the national population to draw upon. The Navy can barely man its ships, let alone sparing "manpower" for non-essential tasks. And just like the merchant marine, knowledge, specialties, and capabilities have been cut way back. There are no more hundreds of sailors manning the engine rooms in large ships. The engines are automated.