Word: dravo
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Pentagon brass were outraged last year when the Dravo Corp. persuaded Congress to award it up to $10 million in extra payments on a disputed Navy contract. Although Dravo had agreed to build a steam plant at the Navy's Norfolk, Va., shipyard under a $102.9 million fixed-price contract, Congress ordered the service to pay for Dravo's cost overruns. Navy paymasters stalled until the 1987 fiscal year ended Sept. 30. Now, they discover, Dravo is back again. Just passed by the House Appropriations Committee, the 1988 Defense Department budget includes the same $10 million bailout. "Greed is still...
...Dravo, which lost nearly $25 million on the project, is also suing seven subcontractors to recover these same cost overruns. The troubled firm says it will get out of the steam plant-building business altogether...
...before we knew anything about it," said a senior Defense Department official. "It was an abhorrent exercise of legislative prerogative." Last spring the Navy persuaded Republican Congressman Robert Badham of California to offer an amendment to the 1988-89 defense authorization bill banning the use of funds to reimburse Dravo. "It was an extremely dangerous precedent," says Badham. "It gives a whole new dimension to bidding and contracting: If all else fails, go to the Congress...
...Badham's measure has been trumped by a rider from Republican Congressman Herbert ("Sonny") Callahan of Alabama, who proposed that the Pentagon reimburse Dravo for losses incurred between last October and such time as the repeal is signed into law. Callahan too has reason to be sympathetic: Dravo is a major employer in his district around Mobile. The Dravo PAC has also provided him with $4,000 in recent years...
Still smarting from being outmaneuvered, the Navy is auditing the Dravo project and continues to lobby against the relief measure. "It's a matter of principle," said the senior Defense official. "When you sign a contract, you're supposed to produce. We have got to draw a line on this one and tell the world that's the way it should run." That is just what Congress has been telling the Pentagon all along...