Coast Guard Postpones Pursuing Refunds For Faulty Ships

Thursday, May 29, 2008

The U.S. Coast Guard said it will temporarily stop its review and suspend its pursuit of a $96.1m refund for faulty ships built by Lockheed Martin Corp. (LMT) and Northrop Grumman Corp. (NOC), pending a Justice Department investigation.  The Justice Department and the Department of Homeland Security Office of the Inspector General are investigating the Coast Guard's Deepwater contracts, including the eight, 123-ft. patrol boats found to have structural problems, the AP reported.
The Coast Guard will continue to provide documents and technical support to assist the government's investigation.
The latest move signals a shift by the Coast Guard, which earlier this year had begun the process for a formal negotiation with the Integrated Coast Guard System, the joint venture between Lockheed Martin and Northrop Grumman over the faulty boats.
After revoking acceptance of the patrol boats last May, the department demanded a refund from the ICGS. The boats were later removed from the waters off Florida in late 2006 and permanently decommissioned in April 2007. Some electronics issues on them were first identified in 2003 by Michael DeKort, a former Lockheed Martin employee, who later chronicled his complaints in a YouTube video.
Northrop Grumman builds the ships while Lockheed Martin provides communications equipment and other technology.
Source:  AP

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