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Def. Money / Surplus / Navy Overruns #41147

ABC Evening News for Tuesday, Nov 09, 1976
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(Studio) Pentagon announces today it has surplus of money available for weapons systems; officials say money will be spent on defense programs. Dispute with regard to cost overrun of Navy project between Navy and major contractor noted.
REPORTER: Harry Reasoner

(DC) Newport News Shipbuilding and Dry Dock Company is largest yard in United States for building nuclear ships and only 1 in country able to build nuclear powered aircraft carriers like "Admiral Nimitz" and guided missile cruisers like "Virginia." Claim of cost overrun by shipbuilders noted. [Newport News Shipbuilding Company President John DIESEL - says believes Navy has purposefully underestimated nuclear ship costs under contract now; cites reasons.] Navy acknowledges dispute; spokesperson asked if overruns could have been caused by deliberate underestimates. [Undersecretary of Navy David MacDONALD - says he's not aware of it and doubts it.] Chief civilian procurement officer for Navy is Gordon Rule, not known to be soft toward government contractors. [RULE - says Navy is dealing unfairly with 2 nuclear shipyards, Newport News and Electric Boat, division of General Dynamics Corp.] Newport News company has said if no progress made it won't bid on new ships and will ask 14 ships now in production be moved to another yard; there's no other yard equipped to build nuclear-powered ships. Question now raised is whether government or private contractors should build ships.
REPORTER: Bettina Gregory

Gregory, Bettina;
Reasoner, Harry

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