Leadership: Who Ya Gonna Call?


April 5, 2010:  Several years ago, the U.S. Navy agreed to pay Northrop Grumman, which owns the Newport News (Virginia) shipyard, $454 million to refurbish the carrier USS Enterprise. Northrop Grumman, because the Enterprise was built at their Newport News yards in the late 1950s, had a sole source contract to do all major maintenance. The 16 months this work was to take would enable Enterprise to serve two more years, before retiring in 2013.

Northrop Grumman ran into problems with the Enterprise refurb, and has come back for more money eleven times. So far. Currently, the job will cost $655 million, and take 21 months. Begun in May, 2008, the work is supposed to be finished this month.

Such situations are common, particularly with sole source contracts. There are also, according to the navy, more problems in the Newport News yards, than at the ones in Pascagoula, Mississippi. Since 2001, Northrop Grumman has owned both yards. But before, and after, the purchase, Pascagoula always had a different "corporate culture". That said, Pascagoula has had problems as well, just not as bad as Newport News.

The U.S. Navy is unhappy with the few commercial shipyards that produce its warships. But efforts to get the yard owners to shape up have not worked. At least not yet.



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