THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Thursday, June 13, 1996               TAG: 9606130394
SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 
                                            LENGTH:   39 lines

SHIPYARD'S CARRIER NEGOTIATIONS INVESTIGATED

The Defense Department and the Justice Department are investigating Newport News Shipbuilding's behavior during negotiations with the Navy for the construction of the aircraft carrier Ronald Reagan.

The Peninsula shipyard's parent Tenneco Inc. disclosed the investigation Wednesday in a filing with the Securities and Exchange Commission.

The shipyard received a subpoena in late May from the Pentagon's inspector general requesting documents, according to the filing.

The Ronald Reagan is under construction at the shipyard.

``The investigation appears to focus on whether information supplied by (Newport News Shipbuilding) to the U.S. Navy during negotiations for the Ronald Reagan was current, accurate and complete,'' Tenneco said in the filing.

``We believe the information that we provided was current, accurate and complete,'' said shipyard spokesman Mike Hatfield. ``We're cooperating fully in the investigation.''

Hatfield declined to comment further.

The shipyard won the contract to build the Ronald Reagan, designated CVN-76, in November 1994. Funding for construction of the nearly $5 billion carrier was contested in Congress.

Shipyard officials testified to Congress that the contract was vital to sustaining the shipyard's ability to manufacture the nuclear-powered flattops. Newport News Shipbuilding is the only shipyard in the nation that can build the carriers.

The Ronald Reagan is scheduled to be delivered in 2002.

Greenwich, Conn.-based Tenneco plans to spin the shipyard off to its shareholders later this year. The move will make the shipyard an independent business for the first time in nearly 30 years.

The Pentagon's inspector general is conducting the investigation in conjunction with the Civil Division of the Justice Department. Neither the Pentagon nor the Justice Department could be reached late Wednesday. by CNB