After more than a month of extensive talks, neither the Navy nor Falls Church, Va.-based General Dynamics could agree on a restructured contract that contained cost overruns in a way that was acceptable to both parties.

"They were above the numbers we were willing to accept," Navy Adm. Charles Goddard, told reporters at a Pentagon briefing.

This is the second ship that the Navy has canceled on the so-called Littoral Combat Ship program. In April, the Navy terminated Bethesda, Md.-based Lockheed Martin Corp.'s second ship after costs on the first ship soared to at least $350 million from an initial price of $270 million.

The Navy declined to specify how much costs on the General Dynamics ship has exceeded initial estimates, but said the cost difference is comparable to Lockheed's.

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