General Accounting Office (GAO) has denied the protest by the Ingalls Shipbuilding team

NEW ORLEANS, LOUISIANA -- Avondale Industries, Inc. (NASDAQ/NMS-AVDL) announced that the General Accounting Office (GAO) has denied the protest by the Ingalls Shipbuilding team with respect to the initial contract to design, construct and support the LPD-17 amphibious transport ship, the Navy's next generation of amphibious ships. The contract for $641 million was awarded in December 1996 to an alliance headed by Avondale. Avondale is the prime contractor for the alliance which includes Bath Iron Works Corporation (a subsidiary of General Dynamics), Hughes Aircraft Company (a subsidiary of Hughes Electronics) and Intergraph Corporation.

The Navy followed the GAO decision and canceled its previously issued stop work order. As a consequence, the Company will resume work immediately under the contract.

Mr. Albert L. Bossier, Jr. Chairman and Chief Executive Officer said, "We are extremely pleased with the action taken by the GAO today. The GAO's decision further validates the process by which the Navy selected the Avondale alliance to design and build the LPD-17 ship. The award not only has significant financial implications for Avondale but also underscores our ongoing progress in establishing Avondale's competitive and technical leadership in the shipbuilding industry."

Avondale Industries, Inc., headquartered in metro New Orleans, designs, builds and overhauls both military and commercial vessels.