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Navy says it let a big contract at nearly 50% below estimate

Navy Secretary John Lehman announced Tuesday a ''very major landmark'' in the award of a contract for development of a new pilot training system nearly 50 percent below its originally estimated cost.

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The contract was awarded to McDonnell Douglas Corporation for 300 new training planes based on a British design, along with simulators and computer equipment at a projected total cost of $438 million, compared with the 1981 estimate of $810 million. The projected saving resulted principally from awarding the contract on a firm fixed-price basis rather than a cost-plus arrangement, which has opened the door in the past to cost overruns.

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