Navy cancels Lockheed deal for LCS ship |
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Thu, 12 Apr 2007 22:23
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WASHINGTON (AP) - The U.S. Navy Thursday said it was cancelling a widely criticized Lockheed Martin Corp. contract to build a next-generation combat ship due to cost overruns.'We are disappointed but we have to have it at a price we can afford,' Navy Admiral Charles Goddard said a press briefing at the Pentagon.Lockheed Martin could not be immediately reached for comment but had made a proposal earlier this week in hopes of salvaging the deal.The Navy's unusual decision came after a 90-day stop work order in January on the second of two Littoral Combat Ship (LCS) ships Lockheed is building. The stop work order came after cost estimates on the first ship, which is three quarters completed, soared to at least $350 million from from an contracted $270 million.Lockheed has blamed the cost overruns on revised Navy requirements and material delays from subcontractors.The Navy had initially awarded contracts for four LCS ships, two to Bethesda, Md.-based Lockheed and two to Falls Church, Va.-based General Dynamics Corp. The GenDny contract remains under close review but is expected to proceed, the Navy said.Shares of Lockheed Martin were down 7 cents to $96.10 in aftermarket trading after ending the day down 45 cents to $96.16 on the New York Stock Exchange. Shares of General Dynamic rose 2 cents to $77.36 in aftermarket trading after closing up 62 cents to $77.34, also on the NYSE.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Lockheed makes new LCS ship proposal 