Legal Dilemmas in the Weapons Acquisition Process: The Procurement of the SSN-688 Attack Submarine

Abstract

On December 1, 1976, the Electric Boat division of General Dynamics submitted to the United States Navy a contract claim for more than $500 million arising from a $2.7 billion contract for 18 Los Angeles class SSN-688 attack submarines. The claim alleged that the payments General Dynamics had received from the Navy under its fixed-price contract were insufficient to cover its actual costs of production. When the claim was settled in 1978, General Dynamics had received cash, tax, and interest benefits worth almost $1 billion.