Navy corrects its ship costs estimate |
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Wed, 28 Feb 2007 23:38
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WASHINGTON (AP) - The U.S. Navy on Wednesday publicly backed away from cost estimates on its littoral combat (LCS) ships, saying a senior Navy official 'mistakenly' cited General Dynamic Corp. cost overruns at a breakfast media round-table .'There is insufficient information to know precisely the final cost range,' the Navy said in a statement. 'Although we anticipate some cost growth, it is premature to discuss specific numbers as they are unavailable at this time.'During a reporters' briefing Wednesday morning, Delores M. Etter, assistant secretary of the Navy's Research, Development and Acquisition, had 'mistakenly characterized' the cost of an LCS to be built by General Dynamics to be $350 million or more, the department said.The department had initially awarded four contracts estimated to be worth $270 million per ship. Two went to Bethesda, Md.-based Lockheed Martin Corp. and two went to Falls Church, Va.-based General Dynamics.Now the Navy says cost estimates for the first ship being built by Lockheed Martin is roughly $350 million to $375 million. It took the unusual step in January of ordering a 90-day construction halt for a project review, blaming ballooning cost overruns.At a defense and aerospace conference earlier this month, Etter said the Navy is taking steps to address rising costs and make the ships more affordable.Given that the first ship General Dynamics is building is 60 percent incomplete, it would be premature to offer final costs estimates, said Rob Doolittle, a company spokesman.Shares of General Dynamics gained $1.05 to close at $76.38 while shares of Lockheed fell 31 cents to close at $97.26, both on the New York Stock Exchange. In aftermarket trading, Lockheed shares had gained 2 cents to $97.28.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Navy halts Lockheed work on ship 