Huntington Ingalls executive says company will continue to pursue Avondale costs

By Marjorie Censer / February 16, 2017 at 3:40 PM

Huntington Ingalls confirmed Thursday it is still wrangling with the Navy over whether it can recover costs associated with closing its Avondale, LA, facility.

During a call with analysts Thursday morning, Chris Kastner, the contractor's chief financial officer, said the government's contracting officer has denied the company's claim.

According to a recent Securities and Exchange Commission filing, the claim was rejected "on the purported basis that the Company had not adequately shown savings and other benefits that would accrue to the U.S. Government from the closing of Avondale and consolidation of Ingalls Shipbuilding to the Pascagoula[,MS,] facility."

"While we are continuing discussions with the contracting officer, we will also pursue our claim under the Contract Disputes Act," Kastner said. "We remain confident that our claimed cost is allowable and allocable, and the resolution will be in accordance with our cost recovery expectations.”

Huntington Ingalls ceased shipbuilding operations at Avondale in late 2014. The company has estimated its "net restructuring and shutdown costs" as $276 million, according to the SEC filing.

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