Scrap Lockheed/Northrop deal -Kerry to Coast Guard

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Scrap Lockheed/Northrop deal -Kerry to Coast Guard

Wed Feb 14, 2007 7:09pm ET19

By Jim Wolf

WASHINGTON, Feb 14 (Reuters) - Sen. John Kerry urged the U.S. Coast Guard on Wednesday to scrap a $1 billion-a-year fleet overhaul contract with Lockheed Martin Corp. (LMT.N: Quote, Profile , Research) and Northrop Grumman Corp. (NOC.N: Quote, Profile , Research) and reopen it to competition.

"The Coast Guard should also explore every legal option to recoup funding from Lockheed/Northrop that it spent on poorly designed ships," said the Massachusetts Democrat, a member of a Commerce subcommittee that oversees the Coast Guard.

The Coast Guard did not return a phone call seeking comment on the push to end the current Deepwater deal, as the $24 billion, 25-year project is known.

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Kerry, at a Commerce Committee hearing on the troubled project, said the work was nine years behind schedule and $7 billion over budget.

Lockheed and Northrop, which were supposed to open up subcontracts to competition, instead relied on their own subsidiaries for much of the work to fatten their bottom line at taxpayer expense, Kerry said.

"When the current Deepwater contract expires in June, the Coast Guard should drop Lockheed and Northrop and hold an open and competitive bidding process for the remaining aspects of the program and ensure that management decisions are made solely by the Coast Guard," he said.

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