Grumman Moves to Defuse Navy Ashtray Case
Grumman Corp., stung by controversy over its sale of two exorbitantly priced airplane ashtrays to Miramar Naval Air Station here, plans to credit the Navy almost $95,000 for ashtrays and other specified aircraft parts delivered over the last 15 years, a Grumman spokesman said Wednesday.
Michael Drake said the company, based on Long Island, N.Y., decided this week to pay back the Navy “because we’re embarrassed . . . and want to avoid further controversy.”
It was believed to be the largest Department of Defense reimbursement for overcharging in Grumman’s 55-year history. Grumman did more than $2 billion worth of defense work last year.
“What we’re saying, basically, is that we’re going to give (the Navy) these spare parts free, and what were doing, actually, is crediting the Navy that amount of money on current contracts with Grumman,” Drake explained. “It is not a concession of guilt. . . . Frankly, to end this controversy we volunteered to do this.”
A Navy spokesman at the Pentagon, Lt. Cmdr. Bill Harlow, said Grumman’s proposal is under review by Navy officials.
“We got a letter from them,” Harlow said. “I don’t know anything beyond that.”
Among those naval officials notified of Grumman’s plan, Drake said, were Commodore R. K. Squibb, chief of the Navy’s Aviation Supply Branch in Philadelphia, and Rear Adm. E. K. Walker Jr., head of the Naval Support Command. Neither could be reached for comment Wednesday.
Drake said Grumman will credit the Navy about $550 for each of seven custom ashtrays built by Grumman for its E-2C Hawkeye radar plane. The Navy will also receive credit for 17 one-inch-by-three-inch wrench sockets designed by Grumman to fit a bolt on the ejection seat of the Grumman-built F-14 Tomcat fighter. The Navy was billed about $400 for each socket, Drake said.
In addition, Grumman will credit the Navy about $2,400 for each of 35 ground locks the Navy purchased from Grumman for use on the F-14, Drake said. The clamp-like locks, which measure about nine inches by five, are designed to prevent the Tomcat’s horizontal stabilizer from moving during maintenance.
Initially, Grumman had announced that it would refund only part of the cost of the ashtrays and that it considered the billing price of the wrench sockets and ground locks justified because of the time it took to design and manufacture them.
“Initially, that’s exactly what we said, but because of the controversy over the whole thing, we decided to credit the Navy, give them a full credit for all three parts,” Drake said. “We’ve done this a few times in the past but not very often. This is certainly the largest in memory.”
The controversy erupted publicly last week, when Defense Secretary Caspar W. Weinberger relieved the commander and supply officer of Miramar Naval Air Station, as well as a rear admiral, after it was discovered that officials at the base had paid Grumman about $630 each for two Hawkeye ashtrays, $800 for two wrench sockets and $2,410 for an F-14 ground lock.
Earlier reports have said the Navy paid Grumman $900 each for the two ashtrays. Drake said Wednesday, however, that although the Navy ordered the ashtrays at an individual cost “not to exceed $900,” the devices were delivered for $630 each.
Rep. Jim Bates (D-San Diego), whose inquiries prompted the Navy to investigate procurement procedures at the air station, said this week that documents detailing transactions between Miramar officials and Grumman have apparently disappeared in recent days.
Bates said he suspects that the documents may show “a form of collusion” between the base and the company. Both Navy and Grumman officials have denied the allegation.