WASHINGTON (AP) – The Navy is moving ahead with plans to award combat ship contracts to Lockheed Martin Corp. and General Dynamics Corp. by early next year.

The service asked Lockheed and General Dynamics late Monday to submit bids to build five littoral combat ships, speedy warships designed to operate close to shore. The Navy envisions a winning contractor building three ships, while its rival builds the other two.

The Navy’s request for bids follows the service’s decision last month to scrap its original plan of awarding a third ship this year to one of the contractors. With a decision by Congress to cut funding for the third ship in the fiscal 2008 budget, which ended Sept. 30, the Navy had to go back and draw up new plans to award future ships.

“The Navy is moving as expeditiously as possible on future contract awards,” Lt. Cmdr. Victor Chen said Tuesday. Both companies are expected to submit bids “soon,” he added.

The service plans by January to award both contractors a ship each under the current budget, and will make separate awards for the three remaining vessels in fiscal 2010.

Lockheed spokesman Craig Quigley confirmed the company had received the bids request. General Dynamics representative deferred questions to the Navy. General Dynamics’ program is being overseen by Maine’s Bath Iron Works, while construction is being carried out at a partner shipyard in Alabama.

Both companies have been waiting since April for a decision on the future of the combat ship program.

The Navy last year canceled deals with both Lockheed and General Dynamics for second ships from each due to cost overruns. The service’s latest cost estimate for the current ships being built is $550 million per vessel, more than double its initial estimate of $220 million.

Lockheed Martin delivered its first ship to the Navy in September. General Dynamics’ ship, which was christened last month in Mobile, Ala., is undergoing testing and integration.

The Littoral combat ship is smaller than the Navy’s next-generation surface combat ship and capable of operating in shallow, coastal waters that can move at “sprint speed” to get Marines safely out of enemy territory. The ships can travel at 57.5 miles per hour – compared with the average speed of 34.5 mph for other combat ships.

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