SUPERVISOR OF SHIPBUILDING, CONVERSION AND REPAIR, USN NEWPORT NEWS, VIRGINIA 23607 IN REPLY REFER TO: GEN/4330 Ser 400-159 25 NOV 19/4 Mr. John P. Diesel President and Chief Executive Officer Newport News Shipbuilding and Dry Dock Company Subject: Modification No. AE15 (HMR-331) for Main Coolant Stop Reference: (a) (b) (c) (d) (e) Foncon between Mr. C. L. Willis (NNS&DDCo) and NNS&DDCO ltr 594/C102-C, 599/C102-C, 595/CL-4-151A SUPSHIP NN ltr CVAN68/4330, Ser 100-207 of NNS&DDCO ltr 594/C102-C of 11 September 1974 Dear Mr. Diesel, 1. My representative was informed during reference (a) that the Company did not plan to submit a proposal for equitable adjustment of delay (if any) resulting from HMR-331 separate from the general problem of responsibility for total delay of the CVAN68 and CVAN69. This means that although the Company has submitted a proposal for the hardware costs of HMR-331, complete settlement of all costs associated with HMR-331 cannot be achieved until after submission of the overall delay claim expected in early 1975. 2. The Company's decision not to submit a proposal for all costs associated with HMR-331 is not in accord with previous Company commitments regarding submission of a comprehensive proposal including all costs for HMR-331. References (b) through (e) are part of the correspondence concerning HMR-331 which in part discuss the issue of the Company's submission of a separate proposal for HMR-331. The Company stated in reference (c) that "..., the Government is entitled to receive, and we are proceeding to prepare, a proposal with regard to Modification No. AE15 (HMR-331) for an equitable adjustment. You yourself stated in reference (e) that, "The proposal (for HMR-331) will separate Modification AE15 from the general problem of responsibility for the delay of CVAN68 and CVAN69 in accordance with your request. 39-530 - 75 pt. 3 - 20 GEN/4330 Ser 400-159 3. I expect the Company to honor its commitment relating to HMR-331 including those discussed above. It is requested that the Company's proposal for HMR-331 be amended expeditiously in order to encompass all costs which the Company considers attributable to HMR-331. Government is prepared to negotiate in good faith a fair and reasonable settlement of HMR-331 following receipt of such a proposal. Yours truly, MEustace R. J. EUSTACE SUPERVISOR OF SHIPBUILDING CONVERSION AND REPAIR, USN The HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SEAPOWER SUBCOMMITTEE, Washington, D.C., Thursday, September 26, 1974. The subcommittee met, pursuant to recess, at 10 o'clock a.m., in room 2212, Rayburn House Office Building, Hon. Charles E. Bennett (chairman of the subcommittee) presiding. Mr. BENNETT. The subcommittee will come to order. We are certainly very honored to have Secretary Middendorf with us today, the CNO and others here to make a presentation on behalf of the Navy with regard to shipbuilding. You can just go ahead as you desire. STATEMENT OF HON. J. WILLIAM MIDDENDORF, SECRETARY OF THE NAVY Secretary MIDDENDORF. Thank you very much Mr. Chairman, and Mr. Norris. I am very pleased today to be able to provide the Navy's views on shipbuilding to the Seapower Subcommittee. I feel that the subject is extremely important to the Navy and to the security of the United States. With me this morning are Admiral Holloway, Chief of Naval Operations, whose remarks will follow mine; Mr. Jack L. Bowers, the Assistant Secretary of the Navy for Installations and Logistics; and Vice Admiral Gooding, commander of the Naval Sea Systems Command. His three-star rank is a measure of the importance which we attach to this new command, which combines the old NAVSHIPS and NAVORD organizations, NAVSEA, so-called, looks at ships as total weapon systems rather than as a platform with phased-on weapons which is the approach we followed before. In a sense we escalated the whole shipbuilding program by putting him in charge, and both he and Jack Bowers are here to assist us. Also, I would like to make reference to my daughter. She has attended 20 of these hearings as a reporter, I think as many as anyone except you and Mr. Norris. I think she knows as much technically as I do right now. I won't call on her as a witness. Mr. BENNETT. I have talked with her. I think it is wonderful to have a family relationship like that. She has done a good job. Secretary MIDDENDORF. Mr. Chairman, your hearings have provided a particularly valuable forum for the presentation of the many divergent views and differing perceptions which necessarily exist in endeavors as complex as shipbuilding and ship procurement. I believe that such a forum and its accompanying discussion are especially necessary because, as we enter the final quarter of this century, there is little doubt that the dependence of this country on sea-borne commerce will increase substantially. The maintenance of the basic capability of the shipbuilding industry to support such a dependence is of critical importance to the well-being of the citizens of the country, and simultaneously-to the long-term viability of the institutions in which they place their trust. (1469) |