Interpac Business and Migration Solutions Melbourne Australia

(November 4, 2010)

SHARES in shipbuilder Austal surged almost 20 per cent on reports a multi-billion dollar tender it has bid for could be doubled.
The US Navy is considering doubling a fixed-price contract to a single company for 10 new Littoral Combat Ship warships to 20, and possibly dividing it between Austal and rival Lockheed Martin Corp.

A US Navy spokesman told The Wall Street Journal price competition had prompted a rethink in the plan.

"Effective competition between the industry bidders has led the Navy-separate from the downselect process to engage with key defence committee members in Congress and their staff as well as industry on whether awarding each bidder a 10-ship block buy merits congressional authorisation," he said.

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An Austal spokesperson said the company was not aware of any developments, but was expecting a decision on the tender in the next couple of days.

Austal has already delivered one of the ships, reported to cost about half a billion dollars each, to the US navy and is building another at its shipyard in Alabama.

Lockheed Martin Corp, which has also bid for the tender, has also built and delivered one of the sophisticated warships.

Austal put itself into a trading halt until Monday after rising 18.57 per cent to $2.95.

(Source:theAustralia)