The Nation - News from March 9, 1988

A Navy effort to upgrade future Los Angeles-class attack submarines has generated delays at production shipyards and contract overruns totaling $1.3 billion, the service said. The estimated overrun covers 23 of the attack subs scheduled for delivery into the 1990s and amounts to roughly a 5.9% increase over the negotiated target price for each submarine, the Navy said. The Navy’s target price for each of the attack submarines currently is between $750 million and $760 million. Of the 23 submarines covered by the latest overrun estimate, 11 are being built by General Dynamics Corp. and 12 by Newport News Shipbuilding & Drydock Co. Under the production contracts, the overrun will be split 50-50 with each of two shipyards building the subs, meaning the Navy will have to pay out roughly $650 million beyond the target price of the 23 submarines. The Navy said it already had the funds on hand to pay the overrun. The Los Angeles class, also known as the 688 class, is the Navy’s primary attack sub.