The Navy, over the defense industry's protest, has launched a new procurement policy under which contractors rather than the government will pay for the tools needed to build ships, planes and other weaponry, Navy Secretary John F. Lehman Jr. said yesterday.
Lehman said his new order will save billions of dollars by requiring contractors to invest in their own plant just as they do for commercial business. He rejected the industry's complaint that the policy is unfair, given the uncertainties of Defense Department contracting.
Earlier changes in procurement policy have taken most of the risk out of building weaponry for the government, he said, adding that full-scale engineering development and procurement contracts are no longer signed until the risks are known.
Karl G. Harr Jr., president of the Aerospace Industries Association of America, complained recently to Deputy Defense Secretary William Howard Taft IV that requiring contractors to pay for their own tooling and test equipment on government work would force them "to assume inequitable and unreasonable risks. Contractors should not be expected to assume the risk of program cutbacks which do not provide for concomitant adjustment in amortization of special tooling and testing equipment costs."
Taft rejected the argument and approved the Navy's plan.
Lehman said the Navy will pay for tooling and test equipment in special cases. He cited as an example the forthcoming contract on the V22 aircraft, which will require about $1.2 billion in new tooling. The competitors, Boeing Co. and Bell Aerospace, will not be able to pay the entire amount, he said.
On another subject, Lehman predicted that Congress will soon remove its temporary hold on the Navy's billion-dollar plan to disperse the fleet by building new ports rather than expanding existing ones. He said the dispersal plan would cost $300 million more than it would to fix up existing ports, but would make the fleet less vulnerable. Another driving reason, Navy officials say, is to widen the political base for naval programs.
The Navy plan envisions opening more than a dozen new ports on the Gulf and West coasts and in New York. Critics say Lehman is siting new ports in the states and districts of legislators on military authorization and appropriations committees as a way to build support for the 600-ship Navy the Reagan administration wants by 1990.
On Tuesday the House approved and sent to the president legislation authorizing $40 million for ports in Everett, Wash., and on Staten Island, N.Y., but freezing the funds for 90 days while it reviews a Navy report justifying the homeport plan.
House-Senate conferees approved the 90-day freeze earlier this month at the urging of Sen. Strom Thurmond (R-S.C.), head of the Senate military construction subcommittee, whose state was bypassed in the homeport plan. The conference report was approved by the Senate two weeks ago.
In the report, which authorizes $9.2 billion in military construction funds for fiscal 1986, the conferees cited "serious concerns" that the Navy's plans for new ports could make modernization of existing bases "unaffordable" at a time of defense budget cutbacks.
Thurmond's subcommittee deleted all funds for new ports, but the full Armed Services Committee -- four of whose members represent states that stand to be given new ports -- voted for the freeze as a compromise.
Congressional aides said the funds will be released 90 days after the Navy report is submitted if no opposition is voiced by the House and Senate Armed Services committees.
In another legislative twist, the House yesterday approved a conference report appropriating $94 million for the Everett and Staten Island ports -- $54 million more than authorized -- without the 90-day freeze.
A military construction appropriations conference committee, consisting of several legislators whose districts would land new ports, approved the more generous report Tuesday night. The extra $54 million for the Staten Island facility came at the urging of New York's powerful legislative delegation.
If the Senate adopts the conference report, as expected, the Navy can request a higher spending authorization.