The Release of Morrison Knudsen Corporation from the Performance Guarantee on the AOE-6 Contract

Abstract

On January 23, 1987, the Navy awarded a $290.1 million competitive, fixed-price-incentive contract for the lead AOE-6 Class ship, with options for three follow-on ships to the National Steel and Shipbuilding Company (NASSCO). On January 15, 1987, Morrison Knudsen Corporation (Morrison Knudsen), NASSCO's parent company, guaranteed the performance of the AOE-6 contract. The Navy awarded the contract to NASSCO only after receiving the performance guarantee. Furthermore, the Navy was relying on the performance guarantee to provide NASSCO with adequate financing to ensure performance of the contract. In November 1988, Morrison Knudsen informed the Secretary of the Navy that it wanted to get out of the shipbuilding business and to limit its liability under the performance guarantee. On April 12, 1989, the Navy and Morrison Knudsen entered into an agreement that discharged Morrison Knudsen from the performance guarantee.

Open PDF

Document Details

Document Type
Technical Report
Publication Date
Apr 10, 1992
Accession Number
ADA378446

Entities

Organizations

  • Office of the Inspector General, U.S. Department of Defense

Tags

Communities of Interest

  • Ground and Sea Platforms

DTIC Thesaurus Topics

  • Acquisition
  • Agreements
  • Combat Support
  • Commerce
  • Congress
  • Contractors
  • Contracts
  • Corporations
  • Costs
  • Department Of Defense
  • Governments
  • Law
  • Money
  • National Security
  • Naval Procurement
  • Personnel Management
  • Warfare

Readers

  • Auditory Neuroscience/Auditory Physiology.
  • Government Contracting/Procurement.
  • Naval Architecture and Marine Engineering.