WASHINGTON – High-level discussions are under way over moving the entire DDG-51 destroyer program to Bath Iron Works in exchange for transferring all BIW work on the LPD-17 amphibious assault ships to builders located in Mississippi and Louisiana.

The closed-door talks involving billions of dollars in contracts are taking place between BIW’s owner, General Dynamics, and Northrop Grumman, which owns two major shipyards in Mississippi and Louisiana. The two mammoth corporations currently share responsibilities in building both the DDG-51 and the LPD-17.

The U.S. Navy also is sitting in on the talks, according to sources familiar with the negotiations.

“It would be premature to say what the outcome may be,” said Randy Belote, spokesman for Northrop Grumman. “I suspect the preferred outcome is what the U.S. Navy wants.”

Those familiar with the talks said that the Navy first began urging a contract swap, but the sources also caution that negotiations are in “a very early stage.”

Still, the Navy does believe that consolidating the LPD-17 program under one contractor would result in a cost-saving measure on the ambitious, but slow-moving, program. Northrop Grumman has yet to complete the first two of 12 ships that the Navy plans to acquire and is reportedly 25 percent over budget.

BIW is slated to build four of the billion-dollar LPD-17s, but design delays at the Northrop Grumman-owned Avondale shipyard in New Orleans have stalled any substantial work.

If General Dynamics exchanged contracts, the Maine shipyard would take over all Navy orders for DDG-51s, including four that presently are scheduled for construction at Ingalls Shipyard in Pascagoula, Miss., which is also owned by Northrop Grumman.

Such prospects have sparked political interest from the office of Senate Republican leader Trent Lott, R-Miss., who has reportedly endorsed the contract trade with the expectation that Ingalls also will receive a share of the LPD-17 work. The possible deal also is fetching support from Louisiana lawmakers hoping to consolidate work at Avondale.

Not everyone is certain a deal will be hammered out, however, because of concerns about jobs. LPD-17s are considered more labor-intensive, according to Inside the Navy, a weekly trade publication that covers Navy programs, so a one-for-one exchange on the ship contracts may not be in the best interest of BIW workers.

BIW labor representative Brian Bryant said he is unsure how any change in contracts would influence the employment picture. “Obviously, the story has our attention,” he said Tuesday. “Right now, we can’t even confirm if the discussions are going on.”

A likely deal sweetener would be the awarding of an additional DDG-51 to BIW, according to Inside the Navy. That appears possible since the Pentagon already has put $74 million more toward building a third destroyer in its fiscal 2003 budget at the urging of Sen. Susan Collins, R-Maine, a member of the Senate Armed Services Committee.

According to Collins, the administration will ask Congress to approve funding for a third DDG-51 in addition to the $125 million approved this year.

Collins would not comment on any possible swap being worked out by Northrop Grumman and General Dynamics. Her spokeswoman, Felicia Knight, acknowledged the senator’s role in nailing down increased funding for a third destroyer, but added that the senator refrains from commenting on “business-to-business negotiations.”

“She’s a strong advocate for Bath and will continue to work for the shipyard’s leadership in the construction and design of today’s naval fleet,” said Knight.

Democratic U.S. Rep. Tom Allen, Maine’s 1st District congressman and a member of the House Armed Services panel, believes that BIW would benefit from the possible contract change.

“It will only happen if everyone believes it is worthwhile,” he said. “But if everything can be worked out, it would have significant advantages for Bath because it won’t be dependent on other shipyards that can’t complete their designs.”