April 16, 2007 / 10:51 PM / 13 years ago

Coast Guard drops Lockheed and Northrop

WASHINGTON (Reuters) - The U.S. Coast Guard plans to drop a Lockheed Martin Corp. (LMT.N) and Northrop Grumman Corp. (NOC.N) joint venture from overseeing a $24 billion modernization project plagued by delays, soaring costs and design flaws, the Wall Street Journal reported on Monday.

The Coast Guard was expected to announce on Tuesday a restructuring of the project to overhaul ships, helicopters, airplanes and communications, the newspaper said.

Lockheed and Northrop will be able to continue working on the project, known as Deepwater, but the Coast Guard will strip them of responsibility as the “lead integrator” or program manager. The Coast Guard will assume the role itself, the Journal said on its Web site.

The Coast Guard was not immediately available for comment about the published report.

One month ago, the Coast Guard terminated the joint venture’s work on a dozen patrol boats that were part of the Deepwater project and said it would launch a fresh competition for the ships in May.

Several U.S. lawmakers and watchdog groups have criticized management of the Deepwater program, saying it is nine years behind schedule and $7 billion over budget.

The Deepwater project includes plans to build 91 new ships, 124 small boats, 195 new or rebuilt helicopters and planes and dozens of unmanned aerial vehicles to help the Coast Guard keep up with expanded missions since the September 11, 2001 hijacking attacks.

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