CLARIFICATION: An Aug. 19 article on cost problems in Navy ship repairs described 1982 work on the USS Newport by Marine Hydraulics International Inc. The article incorrectly stated: "To do the 20,000 hours of work that the Navy estimated would be necessary, Marine Hydraulics had agreed to pay workers $2.65." Marine Hydraulics has informed The Post that the firm was awarded the repair contract based on its own estimate of the work required at a rate of $18 per hour for direct labor and overhead. The Navy estimate was not available to Marine Hydraulics.

The Navy revised the contract after it was awarded to include additional work after extensive damage to the ship was discovered upon drydocking it. Marine Hydraulics had no knowledge of the extensive damage prior to the award of the contract. Labor hours for the additional work were negotiated by the government and Marine Hydraulics, and the firm was reimbursed for this work at the Navy's audited rate for the firm in accordance with Navy procedures.

"Downriver time" is reimbursement for travel time to get to and from the job site. Marine Hydraulics has informed The Post that the firm factored in "downriver time" in its original estimate of hours required to perform the original contract. Marine Hydraulics was paid this travel time for the additional work at its audited rate in accordance with Navy procedures.