Litton Files Protest Over Ship Contract Award

From Washington Post

Litton Industries filed a formal protest Thursday against the Navy's recent award of a contract to two competitors for a new model of a Marine Corps amphibious ship.

Litton said its own bid for the first three LPD San Antonio-class amphibious transport ships was about $100 million less than the winning bid by the team of New Orleans-based Avondale Industries and General Dynamics of Falls Church, Va.

While the initial contract awarded on Dec. 17 was for building three LPD ships for about $1.5 billion, that work is all but certain to lead to more extensive contracts--a total of 12 ships for $9 billion.

The Litton appeal to the General Accounting Office, Congress' investigative arm, says the Navy may have chosen the winner based not on which team offered the best value. Instead, Litton said, Navy officials appeared to make their selection on "industrial base" grounds--namely, to sustain the Avondale shipyard.

Navy officials declined comment, but earlier they said they made the choice on "best value" and not industrial base grounds.

The Navy may have calculated that "we had less to lose in losing the contract" than Avondale, Litton spokesman Randy Belote said. Avondale is running out of new military shipbuilding work, while Litton's Ingalls yard in Mississippi has large Navy destroyer backlogs.

Shares of Woodland Hills-based Litton rose 50 cents to close at $46.50 on the New York Stock Exchange, while Avondale was unchanged at $20.375 on Nasdaq.

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