Firm Volunteers to Credit Navy in Parts Furor

Grumman Corp., stung by the controversy over its sale of two exorbitantly priced aircraft ashtrays to the Navy in San Diego, plans to credit the Navy about $95,000 for ashtrays and other specified aircraft parts delivered over the last 15 years, a spokesman for the firm said Wednesday.

Michael Drake said the Long Island, N.Y.-based company decided this week to reimburse 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 contracting 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 in Washington, Lt. Cmdr. Bill Harlow, said Grumman’s proposal was under review by senior Navy officers. “We got a letter from them,” Harlow said. “I don’t know anything beyond that.”

Among the officers 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 also will receive credit for 17 1-inch-by-3-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” for the F-14, Drake said. The clamp-like locks, which measure approximately 9 inches by 5 inches, are intended to prevent the Tomcat’s horizontal stabilizer from moving during maintenance.

Grumman previously 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 to be justified, based on 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 the Pentagon 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 authorized the payment to Grumman of about $630 each for two ashtrays for the Hawkeye, $800 for two wrench sockets and $2,410 for an F-14 ground lock.

Earlier reports have said that the Navy paid Grumman $900 each for the two ashtrays. However, Drake said Wednesday 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 Miramar, said this week that documents detailing transactions between Miramar officials and Grumman apparently have 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 that allegation.