CBS Evening News for Tuesday, Mar 14, 1978
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(Studio) General Dynamics Corp.'s threat to stop work on nuclear subs due to dispute over cost with Navy reported.
REPORTER: Walter Cronkite
(DC) Details given concerning reasons for cost overruns in shipbuilding for Navy. Is noted that Navy doesn't dispute overruns, but amount companies claim for them. Claims against Navy by Litton Inds.' shipyards in Pascagoula, Mississippi, Newport News Shipbuilding and General Dynamic's electric boat division cited. Lack of formal cost overrun claims on Trident sub mentioned. Navy order for audit of each major claim noted. [Navy claims officer Captain Ron JONES - thinks all contractors will try to get as much as they can and Navy must see that payment is only what owed.] Past settlements reached and companies' lawsuit with regard to settlements noted; congress testimony by former Newport News Shipbuilding employee with regard to company order to inflate costs reported [William CARDWELL - thinks they stretched truth a little, but knew they wouldn't get what they were asking.] Contractors' statements with regard to situation cited. [Former deputy Defense Secretary William CLEMENTS - compares contractors' claims to those made in horse trade.] Possible use of public law governing such instances and congress reluctance to give approval for its use noted. Navy and contractors' readiness to go to court mentioned. Solution suggested by Admiral Hyman Rickover stated.
REPORTER: Ike Pappas
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