• U.S.

Defense: Another Trip To the Trough

1 minute read

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 rampant,” fumed Assistant Secretary of the Navy Everett Pyatt.

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.

More Must-Reads from TIME

Contact us at letters@time.com