
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 18, 1992                   TAG: 9203180301
SECTION: VIRGINIA                    PAGE: B4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Short

VA. SHIPYARD LOSES BATTLE OVER SEAWOLF

The Navy followed proper procedure in awarding a Seawolf submarine contract to the Electric Boat shipyard in Groton, Conn., a federal appeals court panel said Tuesday.

"We are satisfied that the Navy complied with applicable statutes and that its decision-making process was directed by relevant and rational factors," Judge Paul Niemeyer wrote.

Newport News Shipbuilding & Dry Dock Co., Virginia's largest private employer, filed suit against the Navy days after the contract for a second Seawolf was awarded on May 3, 1991. The shipyard argued that the Navy failed to follow its own rules regarding defense procurements.

Electric Boat, a division of General Dynamics, had won the Navy's first Seawolf contract in 1989. Electric Boat had the low bid of $615 million for the second submarine, but the Newport News shipyard's bid of $688 million was well under the Navy's ceiling price of $708 million to give the contract to a competitor.

U.S. District Judge Robert Doumar ruled on July 31, 1991, that the Navy violated statutes and regulations in awarding the contract to Electric Boat and told the Navy to solicit new bids for the submarine.

The appeals court decision, however, may be a moot point.

Congress has funded two Seawolf submarines, each costing about $2 billion, but President Bush has proposed that the money be rescinded.

by CNB