The Navy and its principal supplier of submarines, the Electric Boat Division of General Dynamics Corp., announced yesterday they have patched up or set aside lingering disputes over money, faulty workmanship and late deliveries, and will begin work on new undersea vessels.
Navy Secretary John Lehman, with General Dynamics board chairman David Lewis at his side, told a Pentagon news conference that he was "happy to announce" that as a result of efforts by both the company and the Navy "sufficient progress has been made in solving problems at Electric Boat to allow that yard to take on additional attack submarine work."
As a first step, he said the Navy would start negotiations with the Groton, Conn., firm for production of a 688-class nuclear-powered attack submarine and also request options for three more of the vessels, which currently cost about $225 million each.
Electric Boat has been severely criticized by Navy brass for problems with both the attack-class submarines, which are designed to combat Soviet submarines, and the new missile-firing Trident vessels, which are meant to lob nuclear warheads at the Soviet landmass.
In March, Lehman canceled a competition between General Dynamics and Newport News Shipbuilding and Dry Dock Co. for three more attack subs and gave the work to the Virginia firm. A fourth vessel was held in abeyance; it is that submarine that Lehman announced yesterday will now be negotiated with General Dynamics.
Lehman gave no specific reasons about how the situation changed so fast and so dramatically, but Lewis said the key factor was that repair work on other submarines made necessary by faulty materials and welding was now mostly behind the firm, so more normal production could be resumed.
As a result, the firm will deliver seven submarines to the Navy this year, including three that had been delayed and the first Trident submarine, the USS Ohio, which is to be delivered to the Navy on Oct. 31.
Lehman said the Trident's sea trials "have been almost unprecedented in their success," with the ship "exceeding virtually all operating specifications."
The Navy, which has acknowledged some fault in the submarine programs, and General Dynamics have been in a bitter fight over disputed costs that some say is close to $100 million. General Dynamics has put in a claim for $18 million.
But yesterday both officials said, as Lehman put it, "we believe we have resolved that claims issue by simply setting them aside without prejudice to legal rights" in order to "reestablish the historic good relations between the Navy and the yard."
If the Navy budget and fleet expansion are approved along the lines that President Reagan and Lehman would like, the shipbuilding industry will be in for a major infusion of new business.