THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Friday, March 29, 1996                 TAG: 9603290496
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 
                                             LENGTH: Short :   49 lines

NORSHIPCO SUES FOR PAYMENT OF WORK ON MILITARY CARGO SHIP THE LAWSUIT SAYS GOVERNMENT-REQUIRED $20 MILLION OF EXTRA WORK.

Norshipco has sued the Military Sealift Command, saying it wound up doing nearly twice the amount of work on a military cargo ship it was originally contracted to do.

In the suit filed March 20 in Norfolk Federal Court, Norshipco asked for $10.5 million, but said it will seek at least $3.5 million more by the end of April.

The combat-stores vessel Niagara Falls arrived in the Norfolk shipyard in November 1994 for a $22.5 million overhaul and conversion.

As a result of government-ordered changes, Norshipco and its subcontractors did at least $20 million worth of additional work, the suit said.

In December, the Sealift Command gave Norshipco $6.5 million for the extra work, calling the award its ``final decision.''

A Sealift Command spokeswoman in Washington declined to comment on the suit.

The Navy has been shifting the operation of auxiliary ships to the Sealift Command to save money through the use of less expensive civilian crews. Such vessels resupply Navy warships at sea.

Norshipco, South Hampton Roads' largest private shipyard with nearly 3,000 employees, has won other Navy ship conversion contracts. At its plant in Norfolk's Berkley section it is working on a $26 million conversion of the Niagara Falls' sister ship, Concord, and a $25.8 million conversion of the ammunition ship Flint.

The added work on the Niagara Falls delayed Norshipco's completion of the conversion by six days in October, which resulted in $280,200 worth of late-delivery penalties that the suit also seeks to overturn.

In its suit, Norshipco is seeking $10.5 million for work on the Niagara, but might seek more when it finishes compiling its bills. The final amount should be determined by the end of April.

Norshipco sued U.S. Maritime Administration twice last May, seeking $8.6 million for extra work it did on two government cargo vessels. Norshipco deactivated the roll-on/roll-off ships Cape Diamond and Cape Domingo after the Persian Gulf War.

Both suits were later settled confidentially.

KEYWORDS: LAWSUIT by CNB