THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, March 5, 1996 TAG: 9603050180
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
DATELINE: WASHINGTON LENGTH: Medium: 88 lines
Pleading poverty as it submitted its $242.6 billion budget proposal for 1997, the Pentagon said Monday that it does not have the money to begin work on schedule next year for a new attack submarine that would be built at Newport News Shipbuilding.
Shipyard officials and federal lawmakers representing the area immediately promised an aggressive effort to secure the $500 million needed to start work on a nuclear reactor for the ship.
``We're going to do everything we can to get that money,'' said Jerri Dickseski, a shipyard spokeswoman.
Hours after the budget proposal was unveiled, Republican Sen. John W. Warner summoned the Navy's top admiral, Adm. Mike Boorda, to his office for what was described as ``a thorough discussion'' of the issue. Warner announced later that Boordaagreed to present a plan by March 26 to keep the sub on schedule.
Warner's junior colleague, Democrat Charles S. Robb, meanwhile, suggested Congress may revisit a delicately balanced deal struck with the Pentagon last year to divide sub contracts between Newport News and a rival yard, Electric Boat of Groton, Conn.
``If changes are initiated by the executive branch, certainly the legislative branch has options'' as well, Robb said.
He said he continues to believe that competitive bidding by Newport News and Electric Boat is the ``most cost-effective'' way to run the sub program.
The agreement reached last year calls for Electric Boat to get the contract for the first sub in a new line of attack boats, with construction to begin in 1998.
The budget released Monday includes almost $775 million for that sub, as well as a final $920 million payment on the third and last sub in the Seawolf line, also being built at Electric Boat.
Newport News, according to the deal, is to get the second ship in the new line, with construction to begin in 1999. A third ship would go to Electric Boat in 2000 and a fourth to Newport News in 2001.
The two yards would compete for subsequent contracts.
Lt. Conrad Chun, a Navy spokesman, reaffirmed the Navy's commitment to that arrangement Monday night.
The service ``remains committed . . . to the award of a contract to Newport News Shipbuilding for construction of the second ship in fiscal year 1999,'' he said, and to competition between the two yards beginning in 2003.
Though actual construction of Newport News' sub is three years away, defense officials acknowledged that without money for the reactor in '97, the shipyard would be hard-pressed to start building the ship on time.
Less than two years of lead time between the beginning of work on the reactor and the start of construction on the ship itself ``does not make for efficient procurement,'' one senior defense official said.
Dickseski said ``it would be premature'' to comment on whether the yard could meet the 1999 construction timetable if it had to wait until 1998 for the reactor money.
The sharp reaction to a possible delay in the sub program contrasted with the yard's quiet response last week to word that the Navy also will not seek preliminary funding in 1997 for a new aircraft carrier.
Construction of the carrier is not slated to begin until 2002, giving the yard several more chances to secure the early funding without jeopardizing the schedule.
Defense Secretary William J. Perry and other officials said the demands of other weapons programs, along with other budget priorities, left them short of funds for the sub reactor this year. Though the budget is about $242.6 billion for next year, that represents a 3.6 percent decline over this year's budget.
Perry and Pentagon Comptroller John Hamre said the Defense Department remains committed to the 1999 schedule for construction.
That assurance was small comfort to Rep. Herbert H. Bateman, a Newport News Republican who has led past fights for Navy programs at the local shipyard. ``If they're committed'' to the program, ``it's rather elementary that they should have looked for the money to pay for it,'' he said.
``I am very disappointed and distressed'' at the Pentagon's budget request, Bateman added.
The sub-building schedule was worked out last year in negotiations involving Virginia and New England congressmen, the Pentagon, and the Clinton administration.
The Navy initially wanted Electric Boat to get all of the work in developing the new sub line, with competition for construction contracts coming after the turn of the century. But Tenneco Inc., Newport News corporate parent, pushed for immediate competition, arguing that the Virginia yard could beat Electric Boat's prices by billions over the 30-sub life of the program.
KEYWORDS: DEFENSE BUDGET by CNB