DD 21 ALLIANCE AWARDED $68.5 MILLION FOR PHASE ONE DESIGN WORK

WASHINGTON, D.C., August 17, 1998 -- The U.S. Navy has awarded a $68.5 million contract to the DD 21 Shipbuilder Alliance for Phase I system concept design work in the DD 21 Destroyer Program. The Alliance is comprised of Bath Iron Works Corporation (BIW), a General Dynamics Company, Bath, Maine, and Ingalls Shipbuilding division of Litton Industries, Pascagoula, Mississippi.

These companies have been designated as the two DD 21 shipbuilders, with BIW serving as the Alliance prime contractor for the first phases of the program. The DD 21 Program will ultimately include the construction of 32 new ships, beginning in Fiscal Year 2004.

"This award to the Shipbuilder Alliance is a reaffirmation of the DD 21 program's importance to the Navy, and of the role the Alliance will play in the development of the Navy's next generation of surface combatants," said Ingalls President Jerry St. Pe'. "Ingalls and BIW have been allies for two decades in the production of Aegis cruisers and destroyers, and the DD 21 Shipbuilder Alliance is simply an extension of that partnership -- and of the Navy's confidence in the ability of our two companies, and other team members, to develop a producible, affordable DD 21 design."

"Today's award to the DD 21 Shipbuilder Alliance is another important step in a program that is critical to the surface Navy of the future," said BIW President Allan C. Cameron. "We are proud to be part of the innovative acquisition approach which centers around the alliance between Bath Iron Works and Ingalls Shipbuilding. We are confident that the BIW/Ingalls partnership, based on a successful working relationship in the Aegis Program, and combined with the efforts of other team members, will result in the most technologically advanced and affordable design for the next generation of surface combatants," Cameron said.

In June, the Navy announced that Ingalls and BIW will produce the 32 ships in the DD 21 Program, following a concept design competition. The Alliance submitted a plan to the Navy which established two competing design teams of shipbuilders and systems integrators; one consisting of Ingalls and Raytheon Systems Company, a unit of Raytheon Company, and another consisting of BIW and Lockheed Martin. As a result of today's award, each team will receive approximately $34 million to perform the Phase I design work.

"The Ingalls/Raytheon team is well underway in carrying out the requirements of the first phase of the DD 21 Program," St. Pe' said. "With today's award of Phase 1 funding, the pace of our team's activity will now increase rapidly."

"BIW and Lockheed Martin are anxious to move forward with the exciting and challenging task of designing the DD 21. Work has been ongoing for several months, and this award will provide formal funding for our team to move into full-scale activity," said BIW's Cameron.

Additional funding will be received by the Alliance and its two teams for later design phases leading up to selection of the winning concept and construction of the lead ship.