Congress OKs $40 million for Sparrows Point yard Bethlehem owed for building 2 ships

October 07, 1992|By Ted Shelsby | Ted Shelsby,Staff Writer

Congress earmarked $40 million in the defense appropriation bill passed yesterday for Bethlehem Steel Corp.'s shipyard at Sparrows Point to settle a four-year-old financial dispute with the Navy regarding the construction of two ocean survey ships.

In announcing the congressional action, Sen. Barbara A. Mikulski. who had requested the payment be made to Bethlehem for work performed, said that unlike the language in last year's defense bill, the payment was not left to the discretion of the Navy.

"That loophole has been closed this year," said an aide to the Maryland Democrat. "This year's language says it's a done deal. The Navy has to make payment, there are no ifs, ands or buts."

In a statement released yesterday by Bethlehem Steel's headquarters in Bethlehem, Pa., the company said the $40 million "will help address a part of the significant losses incured. . . during the design and construction of the two first-of-a-kind U.S. Navy oceanographic ships."

Bethlehem said the ships were planned for defense activities by theNavy, and when the disagreement over the contracts arose, the shipyard believed it to be in the national interest to continue construction with the hope that the contract differences could be resolved.

The first of the two ships was delivered in March 1989 with the second ship delivered the following summer.

Bethlehem spokesman, Henry Von Spreckelsen, said the $40 million does not cover all the additional costs pertaining to the design changes made on the vessels.

However, he could not say yesterday how much the shipyard lost on the contract.

Nor was he certain that the company, with the support of SenatorMikulski and Rep. Helen Delich Bentley, a Republican who represents the 2nd District, would pursue even more funding from the Defense Department.

Bethlehem said the money would be used to help purchase urgently needed equipment and for modernization.

Mr. Von Spreckelsen said a portion of the money would be spent on the company's steel mill and shipyard in Baltimore, but he could not say how much or specifically what it would be used for.

The Senate approved the defense appropriation bill yesterday.

It had earlier been passed in the House and now goes to the president for his signature.

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