General Dynamics Corp
. (GD.N: Quote, Profile, Research) and the U.S. Navy recently met to discuss switching to a fixed-price contract for the company's shore-hugging Littoral Combat Ships
(LCS) after the program was between 50 percent and 75 percent over budget, according to a Reuters report.
The Navy, which wants to eventually build 55 of the new ships, hopes to resolve the matter by Oct. 19. The sides began talks last week.
Two sources familiar with the talks said they were focused in part on General Dynamics' concern about limiting its liability under the fixed-price agreement if requirements for the program changed in the future.