The U.S. Coast Guard said Friday that it would reopen bidding on portions of the $24 billion Deep Water shipbuilding contract shared by L.A.’s Northrop Grumman Corp. and Lockheed Martin Corp.

The move comes in the wake of criticism from lawmakers and federal auditors who faulted the Coast Guard and the two contractors for mismanagement, cost overruns and sub-standard design and manufacturing work. The Deep Water program was instituted 25 years ago to modernize the Coast Guard’s fleet and aircraft.

For Northrop, the biggest loss is its share of $54 million contract signed in 2002 to build 91 small cutters. Bethesda, Md.-based Lockheed and Northrop have been instructed by federal auditors to hold competitions for new subcontractors to design and build a fast cutter, which could be used to combat drug smuggling and terrorist operations as well as intercept illegal immigrants and manage fisheries.

The two defense firms will continue to negotiate with the Coast Guard during the next three years of the pact to determine if other portions of the Deep Water project should be re-bid.

Shares in Northrop were up 20 cents to $72.43 in afternoon trading Friday on the New York Stock Exchange.