THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, May 23, 1995 TAG: 9505230251
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
DATELINE: WASHINGTON LENGTH: Medium: 69 lines
Newport News Shipbuilding and its submarine-building rival, Electric Boat of Groton, Conn., could get an important indication today of congressional sentiments in their multibillion-dollar battle for the Navy's future submarine business.
With the Clinton administration determined to deliver most of that work to Electric Boat, a House subcommittee is expected to consider proposals to force competitive bidding on the $700 million design and other preliminary contracts for a new generation of attack subs.
The competitive bidding plan could get a vote in the full House National Security Committee as soon as Wednesday. The first of the subs is not expected to go into production until 1998.
All the military services use ``sole sourcing'' on weapons systems that already are established, but the Navy's attempt to direct the initial sub work to Electric Boat - without competition - is apparently unprecedented.
Newport News, which says it would win any fair competition, has launched a bold campaign this spring to force its way into the market.
The Tenneco Inc. subsidiary has sent lobbyists to Capitol Hill and placed advertisements in newspapers across the country, including The Virginian-Pilot, to argue that it could save the government up to $10 billion if allowed to build all 30 subs in the new class.
Electric Boat says those claims are overstated. It launched its own ad campaign over the weekend, making its case for both the new sub and a $1.5 billion appropriation it needs to complete work on the third and last sub in the Seawolf class.
Finishing the Seawolf and winning the initial work on the new sub is vital to the survival of Electric Boat, which builds only submarines.
Newport News, which has a bigger yard, also builds aircraft carriers and some commercial ships. It argues that it can do sub work for less than its rival by spreading its overhead across its larger customer base.
With more than 19,000 workers, the giant shipyard is one of the state's largest employers. Building some of the new subs could enable the yard to keep thousands employed after the last scheduled carrier is delivered in 2002.
The focus of today's subcommittee action is likely to be a draft bill that will be offered by the panel's chairman, Rep. Duncan Hunter. Congressional sources, who asked not to be named, said the California Republican is expected to look out for Newport News' interest, though it was unclear how far he would go to encourage competitive bidding.
The Navy concedes that Newport News probably could undercut Electric Boat's price on the new subs, but says the savings would be slight and more than offset by the value of preserving both yards. ILLUSTRATION: Graphic
WHAT'S NEXT FOR NEW SUB
THIS WEEK: Vote in the House National Security committee on Navy
request for $700 million to start work.
EARLY JUNE: Senate Armed Services committee expected to consider its
own submarine plan.
LATE JUNE OR JULY: Defense authorization bills for 1996, including
the submarine, will be considered on House and Senate floor.
August: Both houses work out a compromise authorization bill in
conference committee.
SEPT. 30: Final bill must be passed and signed by President
Clinton.
by CNB