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Navy Awards $18 Billion Virginia-Class Submarine Contract


The Navy has awarded an $18 billion contract to General Dynamics Electric Boat to build ten more Virginia-class attack submarines, service officials announced April 28.

The award is the latest contract in an ongoing multi-year effort to build the next-generation attack submarine able to replace the retiring Los Angeles class submarines. So far, ten Virginia-class submarines are in service, eight Block III submarines are under construction and now ten Block IV boats are under contract.

Electric Boat also works closely with its major subcontractor, Huntington Ingalls Industries - Newport News Shipbuilding when it comes to constructing the boats.

“The Block IV contract is a $17.6 billion fixed-price incentive fee, multiyear procurement contract with economic order quantity that continues the program's two-per-year build rate for fiscal years 2014 through 2018,” the announcement said.

Also, the Navy will take delivery of the first of the Block III Virginia-class submarines, the USS North Dakota, this summer. Johnson said the Block IV contract lowers the per-boat unit price compared with the Block III deal.

"The Block IV award is the largest shipbuilding contract in U.S. Navy history in terms of total dollar value and builds upon the Virginia-class program's successful Navy and industry relationship,” Program Executive Officer for Submarines Rear Adm. David Johnson said in a written statement.

The multi-year Block purchase contract is a strategy intended to save money for the Navy and also secure the engineering expertise and production capacity of the U.S. industrial base.

“We’re continuing with a two per year build cycle. We saved over $2 billion dollars in this contract as opposed to doing it in annual procurements,” a Navy official said.

The Navy’s 2014 30-year shipbuilding plan calls for the construction and delivery of Virginia-class submarines through at least 2043, an acquisition strategy which plans for a total of 48 to 50 boats, Johnson said.

Since the expected service life of a Virginia-class submarineis 33 years, the timeline means they will be expected to serve well beyond 2060, Johnson explained.

Block IV Virginia-class submarines are also being engineered to need fewer shipyard maintenance availabilities, allowing them to increase full-length deployments at sea, Johnson said.

The goal is to build submarines with longer-lasting parts so that they can deploy 15 times over the course of a 33-year service life, Navy and Electric Boat officials said.

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