Word: subs
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Dates: during 1980-1989
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...company won a contract for seven of the submarines with a bid of $61 million each. In an interview with TIME, Veliotis maintained that the bid was absurd from the beginning. Said he: "Electric Boat completely underestimated the difficulties and costs of building an entirely new sub...
...inflation, was roughly the same price as that of the first seven ships. Veliotis claims that General Dynamics' management knew it would never come close to the $77 million cost. The bid, he says, projected that it would take only about 4.5 million man-hours to build each sub, even though experience with the first set had shown that 6 million man-hours was more realistic...
...General Dynamics filed a claim with the Navy for $843 million in current and projected cost overruns on the attack-sub program. That worked out to a staggering $46 million surcharge on average for each of the 18 boats. The company contended that costs ballooned primarily because of design changes imposed by the Navy. But Veliotis says that most of the changes were requested by the company and that gross mismanagement was the real culprit. When he took over Electric Boat in 1977, he found the shipyard to be plagued by poor supervision, sluggish productivity and chronic absenteeism...
...submarine saga illustrates several of the alarming trends in the defense procurement business. The sheer size of the stakes--$100 million or more for a single sub--was enough to excite the greed and test the integrity of even the most well-meaning contractor. Says a former top Pentagon official: "Whenever you have so much money, you are going to have people doing a lot of reprehensible things to get the money. The sums are so huge now they pretty much defy control...
...marketplace, General Dynamics has found that pulling strings at the Pentagon can be more important than making products efficiently. The Pentagon, in turn, is dangerously dependent on General Dynamics. It is the only supplier of the Trident submarine and one of two contractors for the SSN 688 attack sub...