THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, May 6, 1995 TAG: 9505060289
SECTION: LOCAL PAGE: A2 EDITION: FINAL
SOURCE: STAFF REPORT
DATELINE: WASHINGTON LENGTH: Short : 43 lines
The Navy has developed new cost estimates that could undermine Newport News Shipbuilding's attempt to compete for future submarine contracts, according to a published report.
Defense Daily reported Friday that a new Navy study puts the immediate cost of shifting submarine work to Newport News at $650 million to $1.1 billion. Doing the work at the Hampton Roads yard would produce ``negligible savings over the long term,'' the study reportedly added.
Electric Boat of Groton, Conn., is under contract with the Navy to design a new generation of attack subs. The Navy wants that yard to be the exclusive supplier of the new boat while Newport News builds all of its aircraft carriers.
Defense Daily said Nora Slatkin, the Navy's top acquisition official, wrote this week to Georgia Sen. Sam Nunn to outline the new study. Navy officials declined to comment Friday on her letter or the report.
Newport News officials have claimed in appearances before two congressional committees this spring that they could save the Navy up to $7.5 billion if allowed to build all 30 subs expected to comprise the new class.
The key to the savings, the yard claims, is its ability to spread its overhead costs among a variety of private customers as well as the Navy.
Newport News is moving aggressively into the commercial shipbuilding market while Electric Boat, a subsidiary of General Dynamics, builds only submarines.
The Navy says it wants to give the first of the new subs to Electric Boat to keep the yard in business and preserve the possibility of having two yards turning out subs simultaneously if a crisis creates the need for large-scale production.
Keeping two nuclear-capable yards also makes sense because of the possibility that a serious accident or disaster would cripple one, the service contends. by CNB