Bollinger challenges Northrop in lawsuit

Bollinger Shipyards has filed a lawsuit against Northrop Grumman Ship Systems Inc. seeking $12 million to settle claims related to the remaking of Deepwater cutters that were rejected by the Coast Guard.

Bollinger Shipyards Lockport LLC was a subcontractor to Northrop Grumman on a Deepwater Systems contract to extend 49 Coast Guard cutters from 110 feet to 123 feet. The Coast Guard refused to accept the first eight renovated boats for service because of major structural flaws. It also sought a refund for the eight cutters.

Bollinger's 15-page complaint was filed on Oct. 16 in the U.S. District Court in the Eastern District of Louisiana. Bollinger is seeking arbitration.

According to the complaint, Northrop Grumman notified Bollinger to stop work in July 2005 after Bollinger had delivered six boats and begun work on six more boats.

Bollinger said it suffered damages resulting from the termination totaling $15.6 million, and it asked Northrop Grumman to pay that amount, but the company refused. In January Bollinger adjusted the amount of damages to $12 million.

In the lawsuit, Bollinger claims that Northrop Grumman "through its sole negligence, delivered late, ill-defined specifications and drawings to Bollinger. Bollinger needed this information in a timely manner to efficiently perform its subcontract." Northrop Grumman officials were not immediately available for comment.

In September, the Coast Guard awarded a contract worth up to $1.5 billion to Bollinger for design and construction of the Fast Response Cutter as part of the Deepwater asset replacement program. Marinette Marine Corp. filed a bid protest with the Government Accountability Office over the award Oct. 7.

The watchdog group Project on Government Oversight expressed concerns about the new Bollinger award because of the lack of resolution on the refund and on the earlier cutters taken out of service.

"While POGO does not believe in treating companies as guilty before it has been proven, one would think that the Coast Guard would be more wary of awarding this contract to a company with a history of past poor performance, especially since the Coast Guard asked for a $96 million refund," stated a POGO news release.