Lockheed, Navy Could Reach Deal on Ships
U.S. Navy and Lockheed Martin could reach a preliminary agreement as early as next week on how much the defense contractor will be paid for a pair of next-generation combat ships according to the AP. Secretary of the Navy Donald Winter has indicated he plans to strike a deal with Bethesda, Md.-based Lockheed Martin Corp. ahead of an April 12 deadline after a stop-work order was placed on one of its ships due to cost overruns, Capt. Beci Brenton, spokeswoman for Winter's office, said on Friday. Senior Navy officials in January placed a 90-day stop-work order on the second of two ships Lockheed is building as part of the Littoral Combat Ship (LCS) program so they could conduct a cost review.
Navy Official Warns on Cost Overruns
A senior Navy official is warning that rising costs in key programs such as Lockheed Martin and General Dynamics' next-generation surface combat ships could derail efforts by the department to modernize its fleet and aircraft. The Navy has awarded contracts for four ships that initially were estimated to cost $270 million each under the Littoral Combat Ship (LCS) program, two to Bethesda, Md.-based Lockheed Martin Corp. and two to Falls Church, Va.-based General Dynamics Corp. But the cost of Lockheed's first ship - which is roughly 73 percent completed - has already soared to roughly $350 million, according to the Navy. The Navy ordered a halt to work on the Lockheed's second ship in January while it conducted a program review.
