Procurement Professional is the official publication of CIPS Australasia

US Navy delays new warship contract

24 Aug 2010

Source: Reuters

The U.S. Navy is expected to miss its target this summer for awarding a multibillion contract for new warships after reopening discussions with the two bidders, Austal USA, a unit of Australia's Austal Ltd and Lockheed Martin Corp, sources following the issue say.

A contract award for the Navy's Littoral Combat Ship program is not likely now until this fall, several months later than expected, according to the sources who were not authorized to speak on the record.

Dub Summerall, executive director of combatants for the U.S. Navy's program executive office in charge of ships, told a conference in June a contract award should come in late July or early August after both bidding teams submitted "very competitive" offers in April.

The companies submitted their final proposal revisions to the Navy on July 12 after answering several questions, according to documents that were tens of thousands of pages long. But the Navy has now reopened the process and posed further questions about cost and technical matters, delaying a possible contract for some time, the sources said.

The Navy's decision to ask more questions so late in the procurement process was "highly unusual" and was probably aimed at ensuring it would prevail if the losing bidder filed a contract protest, as is widely expected, said Jay Korman, an analyst with the Washington-based research group Avascent.

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