THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, February 23, 1995 TAG: 9502230307
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 89 lines
Two years ago, President Clinton slammed the door on new submarine-building contracts for Newport News Shipbuilding to preserve the nation's nuclear shipbuilding base.
On Wednesday, the Navy's top admiral reopened that door a little bit, giving the giant Peninsula shipyard hope that it can resume building submarines after the turn of the century.
Adm. Jeremy Boorda, the chief of naval operations, told a congressional committee that he supports eventually allowing competitive bidding for production of the next generation of attack submarines.
The Navy plans to build about 30 of the new subs at a cost of up to $48 billion. These subs would replace the much larger and more costly Seawolf.
Clinton had promised that the new attack subs would be built only by General Dynamics Corp.'s Electric Boat yard in Groton, Conn. It was part of his administration's plan to help keep that shipyard open.
If the Pentagon winds up putting the submarine-building contracts out to bid after 2000, thousands of jobs could be preserved at Newport News after the yard delivers its last aircraft carrier in 2002.
``Our position has been and is that we, Newport News Shipbuilding, should be a part of any future submarine construction,'' said shipyard spokesman T. Michael Hatfield.
``It would certainly be good for them,'' added James R. McCaul, president of Washington-based IMA Associates Inc., a shipbuilding consulting firm.
The shipyard on the James River makes aircraft carriers and subs, while Electric Boat makes only subs.
Without the new attack sub program, which is scheduled to begin production in the 1998 federal fiscal year, Electric Boat wouldn't have work in its plans after delivering the last Seawolf that year.
``It just doesn't make sense to split the work between two shipyards,'' McCaul said. ``You've really got to put all the work in one yard'' to best preserve the industrial base.
``You can't build aircraft carriers at Electric Boat, but you can build subs at Newport News,'' McCaul said. ``There's just not enough work to go around, so put it in the more capable yard.''
Electric Boat received an additional $111.6 million from the Navy on Tuesday for the design of the new attack sub, which will be smaller and less expensive than the Seawolf.
Compared with the Seawolf, the new sub will be able to operate closer to shore, where the Navy projects many of its future missions will be.
Boorda's comments may be in response to mounting pressure from Virginia congressmen who have threatened to take legislative steps to try to force competition.
``I don't know of anyone in the Virginia delegation who would be happy with keeping Newport News Shipbuilding out of the sub construction business,'' said Rep. Herbert Bateman, the Republican who represents Newport News.
Bateman said Congress needs to follow up on Boorda's comments to the House National Security Committee, of which he is a senior member.
``You could (hold a competition), but you can't do it right away,'' Boorda told the committee.
The Navy's not building enough to make competition worthwhile until after 2000, Boorda said.
Navy plans call for the first new attack sub to be funded in 1998, with the second in 2000 and the third in 2002.
After that, tentative plans put annual production at about two subs a year, a level necessary to maintain an adequate number of submarines in the fleet.
``If we built two a year, there would be a need and a desire to compete that'' production work, Boorda added. ``I think we would save money. I think we would have a better industrial base.''
Bateman said it wasn't really fair to Newport News Shipbuilding to put the new sub out to bid only in 2002, six years after the shipyard delivered its last Seawolf.
``While I was heartened by the prospect of competition, I want it to be real competition,'' he said.
Neil Ruenzel, spokesman for Electric Boat, agreed that at some point, the Navy may want to consider competition for the sub work.
``Competition may be worth considering when procurement rates increase,'' Ruenzel said. ``However, (in the) near term we see no economies in competing this program.'' MEMO: Bloomberg Business News contributed to this report.
ILLUSTRATION: [Color Photo]
Adm. Jeremy Boorda, chief of naval operations, said he supports
allowing competitive bidding for production of attack subs.
by CNB