DATE: Friday, June 6, 1997                  TAG: 9706060603

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 
SOURCE: BY DALE EISMAN, STAFF WRITER 
DATELINE: WASHINGTON                        LENGTH:   58 lines

LOTT'S CLOUT GETS TWO SHIPS, OTHER CONTRACTS FOR MISS. YARD

The Pentagon's attempt to mollify a powerful senator, upset that his home state shipyard didn't win a major Navy contract, will speed the delivery of two new destroyers and the upgrade of weapons and electronic systems aboard some existing cruisers.

A Defense Department spokesman confirmed Thursday that the Navy's plan to buy 12 new Arleigh Burke-class destroyers over the next four years is being increased to 14 ships, both of which will be built by Ingalls Shipbuilding of Pascagoula, Miss.

Ingalls apparently also will get engineering contracts for a series of improvements to five of the Navy's Ticonderoga-class cruisers under a plan worked out by Defense Secretary William S. Cohen and Senate Majority Leader Trent Lott of Mississippi.

The plan will give Ingalls a total of eight destroyer contracts over four years, with six other ships going to Bath Iron Works in Maine. Each additional destroyer will be worth more than $700 million to Ingalls; contracts for engineering work on the cruiser improvements could mean more than $100 million to the yard, Lott has estimated.

The Navy had urged Congress to provide funds in 1998 for a 13th destroyer, saying it could achieve substantial savings by adding that ship to the 12-ship contract it has negotiated with Ingalls and Bath. A senior Defense official said Thursday that Cohen agreed to reshuffle other accounts within the Pentagon to come up with funds for a 14th destroyer in 2001.

The secretary's promise on that point could be critical to the Navy, which otherwise would have to find the additional $700 million entirely within its own budget.

With plans in the works to begin developing next-generation aircraft carriers and surface combatants and to begin building a new attack submarine during the next five years, service officials have said they have nothing to spare in their shipbuilding accounts.

The five cruisers to get upgrades, including a new missile defense system, a new 5-inch gun capable of firing rocket-assisted shells at targets up to 75 miles away, and other improved air defenses, have not been selected. While Ingalls, which designed the Ticonderoga-class ships, apparently has been promised contracts for engineering work connected to the changes, a Navy official said contracts for the actual upgrades will be competitively bid.

Eight Ticonderoga-class cruisers currently are based in Norfolk.

Lott has been threatening to hold up a variety of Navy weapons programs in retaliation for Ingalls' loss last fall in competition for a new class of amphibious ships, the LPD-17. Newport News Shipbuilding was a partner with Ingalls in that project.

Though the Ingalls-Newport News bid was the lowest submitted, the LPD-17 contract went to a team composed of Avondale Industries of New Orleans, Bath Iron Works and Hughes Electronics Corp.

At Lott's urging, Ingalls appealed the contract award. But the General Accounting Office upheld the Navy's decision, and the service then refused to adjust the 12-destroyer package to shift some of those ships from Bath to Ingalls as an offset for the LPD award. ILLUSTRATION: Trent Lott

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