Shipbuilder says it’s under federal civil probe

Posted Sept. 29, 2011, at 5:54 p.m.
Last modified Sept. 29, 2011, at 6:26 p.m.

NEW ORLEANS — Huntington Ingalls Industries Inc. has disclosed a federal civil investigation into allegations that its former parent — defense giant Northrop Grumman Corp. — used Hurricane Katrina relief funds to improperly recover shipbuilding costs.

In its latest quarterly filing with the Securities and Exchange Commission, Newport News, Va.-based Huntington Ingalls said it is cooperating with the investigation and denies the allegations. According to the filing, Huntington Ingalls is targeted by a whistleblower suit filing asking for at least $835 million.

The filing does not disclose what shipyards may be involved. Huntington Ingalls owns yards in Pascagoula, Miss., and Avondale, La.

The Pascagoula yard competes with Bath Iron Works in Maine for Navy destroyer contracts. They are the only two shipyards in the United States to build destroyers. The yard, and the entire community of Pascagoula, was heavily damaged by Katrina.

That storm was one of the factors that steered the federal government away from its previous plans to source destroyers at just one yard — either Pascagoula or BIW. The destruction at the Mississippi yard helped convince the government it was best to have several sources of production.

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