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President Obama has said he wants the Pentagon to expand the use of fixed-price contracts to reduce the huge cost overruns and delays that have plagued many high-tech weapons programs.
Mr. Young [Under Secretary of Defense for Acquisitions] said the final price was still being negotiated with General Dynamics, which will now build all three of the ships in the new class, the DDG-1000. But he said the shift in contract terms should help the government save money.Mr. Young said the first DDG-1000, which is being built by the General Dynamics shipyard in Bath, Me., was expected to cost $3.4 billion to $3.5 billion. That will include all the research and development costs for the program and the $200 million to $300 million of engineering costs that will be apportioned to each of the three vessels.
He said the price for the second ship should drop to around $2.5 billion, and the third one could cost even less.
The shift in contract terms came as part of a broader deal involving the two defense contractors that was proposed by Defense Secretary Robert M. Gates when he announced a major reshaping in weapons programs this month.
http://www.nytimes.com/2009/04/18/business/18ships.html
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