Navy fires 'broadside' at sub builder

Only days after delivering a thunderous broadside at the nation's largest defense contractor for its sloppy submarine construction and poor management, the US Navy says it will award a billion-dollar contract to a rival firm.

Last week Vice-Adm. Earl B. Fowler, commander of Naval Sea Systems Command, told the House Armed Services seapower subcommittee that faulty welding and the use of inferior steel have not only "significantly delayed" but rendered more costly production of Trident strategic missile and Los Angeles-class attack submarines at General Dynamics' Electric Boat Division in Groton, Conn.

Admiral Fowler described the standard of workmanship on the two classes of nuclear submarines as "shocking," claiming that of 8,476 welds inspected on the Ohio, the first of the Trident boats, 2,772 needed strengthening.

Less than a week after the admiral's blistering criticism of Electric Boat, Navy Secretary John Lehman called a Pentagon press conference to announce that contracts for three new SSN 688 Los Angeles attack submarines would be awarded to the Newport News Shipbuilding and Drydock Company in Newport News, Va. His action thus prevents Electric Boat bidding for the contract to build the submarines as it had hoped to do.

The Navy secretary told reporters that his decision to abandon competitive procurement and assign the work to the Virginia yard "was based on my reveiw of diminishing SSN 688-class submarine construction at Newport News and my conclusion that it is essential to the national defense that Newport News be maintained as a supplier of these submarines at levels necessary to meet our national emergency and industrial mobilization requirements." The yard currently has eight SSN 688s under contract.

Few observer of the naval scene in Washington doubt that Secretary Lehman, who may be the most dynamic Navy secretary in modern times, was expressing his displeasure with General Dynamics' Electric Boat Division when he awarded the three submarines to Newport News. for its part, the Navy believed that the yard was focusing too much attention on its attack submarine program to the detriment of Trident construction.

Some analysts here feel that defense contractors generally would be wise to take note of the Navy secretary's action, suggesting that it may herald a tougher line with those who drag their feet in producing equipment for the nation's armed forces.

In a letter to david S. Lewis, chairman of the board of General Dynamics, the Navy secretary explained that his action was necessitated by considerations of national defense. But he also drew the chairman's attention to "the very serious problems in the delivery schedules of the 21 submarines now under construction in your yard -- all of them SSN 688s.

Noting that Electric Boat recently claimed it could deliver up to two Tridents and three SSN-688s per year, the Navy secretary wrote: "If such performance could be realized, in conjunction with optimum performance from Newport News, our force objectives could be realized between the two yards. Unfortunately, performance to date by Electric Boat does not support such a claim."

He told Mr. Lewis that the "delay and projected delay of these submarine deliveries at Electric Boat has cost the Navy and nation many submarine years of protection."

Of all the submarines at the yard, the first of the Trident boats is the most woefully behind schedule. If delivered in December, the 18,750-ton Ohio will be two years and eight months late. But some Navy officials feel the submarine will not be handed over to the Navy until 1982. The Ohio class of strategic missile, are to replace the Navy's aging Polaris/Poseidon fleet. Eight have so far been authorized for construction. The delay in the program has caused Pentagon admirals even greater concern since the Soviet Union launched the first of its new Typhoon class of strategic missile submarines last year.

Secretary Lehman told Leewis that he is equally distrubed by his discovery that "the average return cost to Electric Boat for construction of the first five submarines of the 688 class . . . is some 50 percent higher than the first five submarines of the same delivered by Newport News."

All in all, Newport News Shipbuilding and Dry Dock Company seems to be winning the plaudits of the Navy. According to Admiral Fowler, it suffers from "comparatively minor deficiencies" compared to Electric Boat, which, say defense officials, should not take on any new work for some considerable period of time.

Electric Boat, Connecticut's second-largest employer, says it "regrets" Secretary Lehman's decision and adds that it will lead to "substantial layoffs" later in the year. The shipyard, which built the US Navy's first submarine, the Holland, in 1900, and launched the Nautilus, the world's first nuclear submarine in 1954, employs 20,000 people at Groton.

In a prepared statement issued after the Navy secretary's announcement, Electric Boat claimed that it had submitted "a responsive and price-competitive proposal" for the three Los Angeles-clas boats, a proposal that it claimed was more attractive than that submitted by its rival in Virginia. It also asserted that it had put its problems behind it - a claim the Navy views with extreme scepticism.

But not everybody believes that Electric Boat is solely responsible for its unenviable predicament. "I think that the Navy is also to blame because it has made any number of change orders and engineering changes that have frustrated the time schedule, and I don't think they have been as sympathetic . . . as they might have been to the problems [that] that causes within the shipyard," observed Rep. David F. Emery (R) of Maine, second-ranking Republican on the House Seapower subcommittee, at a recent press conference.

Representative Emery claimed that the Navy and Electric Boat "are like children in a schoolyard. They bicker, they fight, they don't communicate with each other. It is almost like two warring factions . . . and that isn't much of an exaggeration." He had just returned froma visit to the Connecticut shipbuilder where he said he was struck by how "every little trust or confidence" the yard had in the Navy and vice versa.

Nodoby doubts lehman's determination to give the US a 600-ship Navy. If sufficient SSN 688s cannot be built by yards currently in production, he may draft a government yard into action -- or another private one.