DATE: Tuesday, April 8, 1997                TAG: 9704080280

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY DALE EISMAN, STAFF WRITER 

DATELINE: WASHINGTON                        LENGTH:   54 lines

PENINSULA SHIPBUILDER LOSES BID FOR NEW CLASS

A consortium that includes Newport News Shipbuilding on Monday lost a bid to overturn the Navy's decision to use a competing group to build a new generation of amphibious transport ships.

The General Accounting Office, Congress' fiscal watchdog agency, turned down the protest by Newport News and Ingalls Shipbuilding, a yard in Pascagoula, Miss., despite claims that they could build the ships for substantially less than a group led by Avondale Industries of New Orleans.

The Navy had acknowledged that the Ingalls/Newport News bid was lower than the $641 million proposal Avondale made for the first ship in the LPD-17 class, the San Antonio. The contract award was made on the basis of what the service considered the ``best value,'' the Navy said.

In the wake of the December award to Avondale and its partner, Bath Iron Works of Maine, the Navy has explored the apportioning of all its surface ship contracts. That has triggered speculation that Ingalls may get additional destroyer work to offset its loss in the LPD-17 competition.

Service officials have said they're trying to preserve Avondale, Bath and Ingalls as their principal builders of surface ships.

Each yard has influential patrons in Washington. Senate Majority Leader Trent Lott of Mississippi is an active advocate for Ingalls' interests, while Rep. Bob Livingston of Louisiana, chairman of the House Appropriations Committee, looks out for Avondale. And before he became Secretary of Defense in January, William S. Cohen looked out for Bath Iron Works as senior senator from Maine.

Newport News officials have said that participating in the LPD-17 program is not vital to the Peninsula yard's future. The yard has a $3.5 billion backlog that should carry it into the 21st century. It also is lobbying for another $5 billion carrier, on which construction would begin in 2002.

Newport News is the Navy's sole builder of aircraft carriers and has agreed to join forces with Electric Boat of Groton, Conn., to build submarines.

The Navy hopes eventually to acquire 12 of the new amphibious ships, which are intended to replace three classes of transports now in the fleet. Each ship will carry 720 Marines and will feature a docking bay for two air-cushioned landing craft and a flight deck for two helicopters.

A Navy official said that a ``stop work'' order imposed by the service after the protest was filed in December has been lifted and that Avondale will resume work on the San Antonio immediately.

The Navy wants the LPD-17 ships to become models for a new way of building all of its vessels. Avondale's contract for the San Antonio includes responsibility for long-term maintenance of the ship and calls for the use, whenever possible, of commercial products and technologies rather than equipment developed for the military. ILLUSTRATION: [Color Photo]

File photo

An artist's rendering of the first ship in the LPD-17 class.

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