<TABLE> 
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<S>                                                                  <C> 
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                                                                   | 1. CONTRACT ID CODE | PAGE OF PAGES
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT                 |          L          |   1   |   7
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2. AMENDMENT/MODIFICATION NO.           | 3. EFFECTIVE DATE  | 4. REQUISITION/PURCHASE REG. NO.    5. PROJ NO. (if applicable)
    P00027                              |    SEE BLK 16C.    |    N0002496MR20706                     2-0292-20706
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   ISSUED BY                       CODE |   N00024           | 7. ADMINISTERED BY (if other than Item 6)   CODE | N63124
BUYER/SYMBOL: L. NEWTON SEA 02223                              SUPSHIP, New Orleans
2531 JEFFERSON DAVIS HWY                                       Bldg. 16, Naval Support Activity
ARLINGTON, VA 22242-5160                                       New Orleans, LA 70142-5700
PHONE: Area Code 703/602-3102 Ext 226
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8. NAME AND ADDRESS OF CONTRACTOR (No., street, State and ZIP Code)               |----|9A. AMENDMENT OF SOLICITATION NO.
   CEC NO: 60004899F                                                              |    |
                                                                                  |    |----------------------------------------
                                                                                  |    |% DATED (SEE ITEM 11)
                                                                                  |    |
    Avondale Industries, Inc.                                                     |----|----------------------------------------
    GRP Division                                                                  |    |10A. MODIFICATION OF CONTRACT/ORDER NO.
    P.O. Box 2309                                                                 |  X | 
    Gulfport, MS 39505                                                            |    | N00024-89-C-2162
                                                                                  |    |-----------------------------------------
----------------------------------------------------------------------------------|    |10B. DATED (SEE ITEM 13)
CAGE CODE ICC97                            | FACILITY CODE                        |    | 89OCT03
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                        11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
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      | The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers __
------  is extended, __ is not extended.
Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation as amended, by one of the
following methods: (a) By completing Items 8 and 15, and returning __ copies of the amendment; (b) By acknowledging receipt of this
amendment on each copy of the offer submitted; or (c) By separate letter or telegram which incudes a reference to the solicitation
and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE
HOUR AND DATE SPECIFIED MAY RESULLT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already
submitted, such change may be made by telegram or letter; provided each telegram or letter makes reference to the solicitation and
this amendment, and is received prior to the opening hour and date specified.
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12. ACCOUNTING AND APPROPRIATION DATE (If required)
                               See Attached Financial Accounting Data Sheet
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                                13. THIS ITEM APPLIES ONLY TO MODIFICATINS AND CONTRACTS/ORDERS,
                                    IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
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      | A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT 
------|    ORDER NO. IN ITEM 10A.
------|--------------------------------------------------------------------------------------------------------------------------
      | B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMISTRATIVE CHANGES (such as changes in paying office, 
      |    appropriation data, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b)
------|--------------------------------------------------------------------------------------------------------------------------
      | C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
  X   | Special Contract Requirement H-16 entitled Documentation of Request For Equitable Adjustment
------|--------------------------------------------------------------------------------------------------------------------------
      | D. OTHER (Specify type of modification and authority)
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  E.    IMPORTANT: Contractor ( ) is not, (X) is required to sign this document and return 2 copies to the issuing office.
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14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where 
    feasible.)


                                                           SEE ATTACHED

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains 
unchanged and in full force and effect.
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15A. NAME AND TITLE OF SIGNER (Type or print)        |16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
A.L. BOSSIER, JR.                                    |  John Kimener
Chairman, President & Chief Executive Officer        |  Contracting Officer
---------------------------------|-------------------|------------------------------------------|---------------------------------
15B. CONTRACTOR/OFFEROR          |  15C. DATE SIGNED | 16B. UNITED STATES OF AMERICA            | 16C. DATE SIGNED
[SIGNATURE APPEARS HERE]         |      12-28-95     | [SIGNATURE APPEARS HERE]                                      |
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(Signature of person authorized to sign)                  (Signature of Contracting Officer)    |
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NSN 7540-01-152-8070                                                     STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE                                                Prescribed by GSA
                                                                         FAR (48 CFR) 53.243
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<PAGE>
                                                                N00024-89-C-2162
                                                                P00027
                                                                Page 2 of 7

WHEREAS, Avondale Industries, Inc. (AII) (the Contractor) has submitted a 
Request for Equitable Adjustable (REA) dated 15 November 1994 seeking price and
delivery schedule adjustments, damages, and/or other relief under and/or
relating to Contracts N00024-89-C-2162 (MHC 53) and N00024-90-C-2304 (MHC
54,56,57), as updated and supplemented by additional submissions and
representations at various times; and

WHEREAS, the Contractor has certified its REA and all supporting data in 
accordance with the requirements of the Truth in Negotiations Act, 10 U.S.C. 
2306a, Section (c)(1) of the Contract Disputes Act of 1978, 41 U.S.C. 
605(c)(1), and P.L. 95-485, Section 813; and

WHEREAS, Modification A00198 established a maximum price increase for a period
of fourteen (14) days of proposed compensable delay based on a 50/50 sharing
of the costs of said delay resulting from FMR 204; and

WHEREAS, the Contractor has also asserted its entitlement to equitable 
adjustments to the contract price(s) and/or delivery schedule(s) of Contracts 
N00024-89-C-2162 and N00024-90-C-2304, to damages, and/or to other relief under
or relating to those contracts, in connection with: defects in Government 
furnished test instrumentation used during MHC 54 Builder's trials; extension of
vendor warranties; lack of buffering on M/SCS signal outputs; calibration of 
test equipment; EMI conductive paint; accepted mass properties estimates for 
full load displacement and subcontractor delays, inter alia (see Attachment A 
hereto); and

WHEREAS, the parties hereto desire to effect a full and final settlement of the 
Contractor's entitlement to price adjustments, damages, and other relief from 
the Government pursuant to its REA, and also to effect the full and final 
settlement of any and all other actual and potential entitlement of the 
Contractor to price and/or schedule adjustments, damages, and/or other relief 
under and/or relating to Contracts N00024-89-C-2162 and N00024-90-C-2304, any 
and all other Government contracts, and any and all contracts between the 
Contractor and any third party, caused by Covered Events except as specifically 
reserved below; and

WHEREAS, the parties have reached agreement as to an appropriate resolution of 
all matters raised by the Contractor in its REA, and all other matters relating 
to or in any manner connected with Contracts N00024-89-C-2162 and 
N00024-90-C-2304, any other Government contract, or any contract between the 
Contractor and any third party, which actually do or potentially could give 
rise to Contractor entitlement against the Government to price and/or
<PAGE>

								N00024-89-C-2162
                                                                P00027
                                                                Page 3 of 7

schedule adjustments, damages, and/orother relief under or in any connection
with this contract; and

WHEREAS, funds are not currently available for this modification; and
                                                                
WHEREAS, the parties therefore acknowledge and agree that their rights and 
obligations hereunder are contingent upon the availability of appropriated funds
from which payments for purposes of this modification can be made, and that no 
legal liability on the part of the Government for any payment may arise until: 
(a) funds are made available to the Contracting Officer for this modification; 
and (b) the Contractor receives notice that such funds have been made available,
said notice to be provided by the Contracting Officer in writing.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants 
herein contained, the parties agree as follows:

1. The parties hereto have negotiated this modification on the basis that all 
matters, which actually do or potentially could give rise to Contractor 
entitlement to price and/or schedule adjustments, damages (including but not 
limited to money and other damages for breach of contract), and/or relief, which
are known to or should have been known to the Contractor, whether or not
actually discussed by the parties, and whether or not included in any claim,
REA, or other request or demand, have been included and incorporated into this
agreement. This modification accounts for all price, schedule and other
adjustments, and for all damages and other relief, appropriate for all such
matters, except for those specifically reserved below in paragraph 3.d of this
modification.

2. As a result of this modification, the actual adjustment in target cost,
target price and ceiling price for CLIN 0001 for the fourteen days of delay
identified in Modification A00198 dated 14 September 1995 is as follows:

CLIN 0001      Target Cost:     $0.00
               Target Profit:   $0.00
               Target Price:    $0.00
               Ceiling Price:   $0.00
<PAGE>
								N00024-89-C-2162
                                                                P00027
                                                                Page 4 of 7
							
The contract is hereby modified as follows:

a. Under SECTION B: SUPPLIES OR SERVICES AND PRICES, the target costs, target 
profits and target prices and ceiling prices are increased as follows:

CLIN 0001      Target Cost:     $19,871,959
               Target Profit:             0
               Target Price:    $19,871,959
               Ceiling Price:   $19,871,959
                                                           
   b. Under SECTION C: DESCRIPTION/SPECIFICATION/WORK STATEMENT, for CLIN 0001 
and 0021 add the following paragraph:

 As a result of this settlement the Contractor agrees to take all necessary and 
appropriate actions to correct the MHC 53 Acceptance trial cards listed in
Attachment B screened for Contractor Action (KA) and identified to the
Contractor prior to 1 December 1995.  The trial cards which are listed in
Attachment C to this modification are not included as part of this settlement.
Additionally, the Contractor agrees to promptly take all necessary actions to
comply with the contract requirements stated in the following Letters of
Direction:

    (i) SUPSHIP New Orleans letter serial 421.4/08246 dated 22 Nov 95 Subj: LACK
        OF BUFFERING ON M/SCS SIGNAL OUTPUTS

   (ii) SUPSHIP New Orleans letter serial 421.4/07896 dated 6 Oct 94 Subj: 
        CALIBRATION OF TEST EQUIPMENT

  c. Under SECTION F--DELIVERIES OR PERFORMANCE, the contract delivery date
for MHC 53 is 11 August 1995. 

  d. Under SECTION H--SPECIAL CONTRACT REQUIREMENTS, CLAUSE-57 entitled MASS 
PROPERTIES CONTROL, paragraph (a) change the Full Load Displacement value from 
885 metric tons to 907 metric tons.
<PAGE>
                                                                N00024-89-C-2162
                                                                P00027
                                                                Page 5 of 7
							
3. RELEASE

    a. As used in this paragraph 3:

    (1) "Events" refer to any contract modification, any Government breach, any 
Government tort, any change order, any stop work order, any suspension of work, 
any acceleration order, any Government action or omission pertaining to 
Government property or information, and any other occurrence, action, or 
omission (whether fortuitous or accidental, of or by the Government, contractor 
or third party) to the extent included or depicted in the REA and/or REA 
Supplements.

    (2) "Covered Events" refer to "Events" occurring on or before the effective 
date of this modification, whether formal or constructive, which were known or 
should have been known by the Contractor on the effective date of this 
modification, whether or not such events were discussed between the parties, 
all of which events: (I) arise out of or under or are in any way related to this
contract and affect this contract, or (ii) arise out of or under or are in any 
way related to this contract and affect any other contract between the 
Contractor and the Government, or (iii) arise out of or under or are any way
related to any other contract between the Contractor and the Government or the
Contractor and any third party and affect this contract but only to the extent
of the effect on this contract.

    (3) "Costs" includes, but is not limited to, any or all:

(i)     direct performance (hardcore) and material costs;
(ii)    indirect costs;
(iii)   delay and disruption costs including local, cumulative, and any other 
        type;
(iv)    overhead costs;
(v)     costs associated with dislocation, accelerations, and inefficiencies in 
        performance;
(vi)    interest costs and other consideration for financing;
(viii)  costs for preparing proposals, claims, and requests for equitable 
        adjustments; and
(viii)  subcontract costs.

<PAGE>
                                                                N00024-89-C-2162
                                                                P00027
                                                                Page 6 of 7
							
   b. In consideration for the provisions of this modification, the Contractor, 
for itself, its successors, assigns, vendors, suppliers, and subcontractors 
hereby remises, releases, and forever discharges the Government, its officers, 
agents, and employees from (i) any or all actual or potential entitlement of the
Contractor to an equitable adjustment of the price and/or delivery schedule of
this contract by reason of Covered Events, or the impact of Covered Events, (ii)
any or all actual or potential liabilities to the Contractor for money damages
and/or other relief for Covered Events or the impact of Covered Events upon this
contract, (iii) any and all actual or potential entitlement of the Contractor to
an equitable adjustment of the price and/or delivery schedule of any other
Government contract or any contract between the Contractor and any third party
by reason of Covered Events or the impact of Covered Events, and (iv) any and
all actual or potential liabilities to the Contractor for money damages and/or
other relief under or relating to any other Government contract or any contract
between the Contractor and any third party for Covered Events, or for the impact
of Covered Events, arising under or related to this contract. By this release,
the Contractor does not release claims under any other Government contract for
Covered Events solely arising under, or relating to, such other Government
contract to the extent they do not affect this contract.

   c. The Contractor hereby confirms and acknowledges that in agreeing to the 
terms of this modification, it is releasing all rights to any entitlement for 
any and all costs under, and any and all impacts upon this contract or any other
contract by reason of Covered Events, whether or not such costs and impacts of 
Covered Events are known or should have been known or should have been 
foreseeable as of the effective date of this modification, whether or not such 
costs and impacts of Covered Events have been discussed with, or for any reason 
reserved for future discussion with the Government, or have been made the basis 
for other assertions of claims or requests for equitable adjustment, whether or 
not such costs or impacts of Covered Event were, or are, incurred and 
sustained, respectively, before, on, or after the effective date of this 
modification, and whether or not such costs and impacts of Covered Events are 
caused directly by, indirectly by, cumulatively by, or in consequence of any of 
the Covered Events.

<PAGE>
                                                                N00024-89-C-2162
                                                                P00027
                                                                Page 7 of 7

   d. Except for the items listed in Attachment c and pending change orders, the
Contractor's release set forth in this provision is complete and final, no
rights are reserved under this modification and, in any event, any and all such
rights shall be deemed to have been waived without exception. Nothing set forth
herein shall in any way affect or operate to reserve any item covered by another
release executed by the Contractor either prior to, concurrent with, or
subsequent to the date of the execution of this modification nor shall anything
set forth herein in any way affect the operation of any statute, including but
not limited to 10 USC 2405.

4. The parties agree that the retentions against this contract shall be the 
current amount plus one and one half percent (1.5%) of the amount increased as 
result of this modification.

5. Nothing set forth herein shall in any manner affect or operate to reserve any
event or item covered by any other release executed by the Contractor prior to,
contemporaneous with, or subsequent to the effective date of this modification.

6. Funds are not currently available for this modification. The Government's 
obligation under this modification is contingent upon the availability of 
appropriated funds from which payments for purposes of this modification can be
made. No legal liability on the part of the Government for any payment may arise
until funds are made available to the Contracting Officer for this modification 
and until the Contractor receives notice of such availability, to be provided by
the Contracting Officer in writing.

7. Except as modified herein all other terms and conditions of this contract 
remain unchanged and in full force and effect.
<PAGE>
                                                                N00024-89-C-2162
                                                                P00027

                                ATTACHMENT "A"

1. Request for Equitable Adjustment dated 15 November 1994

2. Modification A00198 dated 14 September 1995

3. Avondale Letter serial MHC53/10692WDJ dated 27 Jun 94
   Subj: Insurance Claim EMI COnductive Paint Casualty Loss

4. SUPSHIP New Orleans letter serial 421.4/08246 dated 22 Nov 95 
   Subj: LACK OF BUFFERING ON M/SCS SIGNAL OUTPUTS

5. SUPSHIP New Orleans letter serial 421.4/07896 dated 6 Oct 94
   Subj: CALIBRATION OF TEST EQUIPMENT

6. Avondale subcontractor delay claims from General Marine Industries Inc., 
   Jamestown Metal Inc. and Loral Defense Systems East

<PAGE>
								N00024-89-C-2162
                                                                P00027
	
                                 ATTACHMENT B

			MHC 53 ACCEPTANCE TRIAL CARDS

 1. 1  015  AX  01

 2. 2  087  AX  01

 3. 2  094  AX  01

 4. 2  128  AX  01

 5. 1  024  EL  01

 6. 1  024  EL  02

 7. 1  024  EL  03

 8. 1  024  EL  04

 9. 2  038  EL  01 *

10. 2  006  HB  02

11. 1  027  MP  01

12. 2  069  MP  01 *

13. 2  072  MP  01

*  Based on approval of pending deviations
<PAGE>

				ATTACHMENT B


2 097 AX 01
2 098 AX 01
2 099 AX 01
2 101 AX 01
2 106 AX 01
2 027 CC 01
2 044 CC 01
2 044 CC 02
2 044 CC 03
2 044 CC 04
2 044 CC 05
1 024 DC 01
2 095 MP 01
2 126 MP 01
2 032 WP 01
2 044 WP 01
2 044 WP 02

THE PARTIES AGREE TO NEGOTIATE IN GOOD FAITH TO REACH AGREEMENT ON THE ABOVE 
ITEMS WITHIN SIXTY (60) DAYS OF THE EFFECTIVE DATE OF THIS MODIFICATION.