The Navy will shell out up to half a billion dollars each for two more littoral combat ships.
According to a March 31 contracting announcement, the Navy exercised contract options with Lockheed Martin Corp. and Austal to built two additional vessels in fiscal 2016, one each in the Lockheed Freedom-variant and the Austal Independence-design.
The announcement specifies a $564 million cost cap for each of the ships, though the cost may fall below the caps.
According to an announcement from Lockheed, the Navy used savings from its 2010 block buy contract with the company to procure LCS 25, the 11th ship purchased under the agreement and the 13th overall Freedom-class ship. It will be delivered to the Navy in 2020.
“We are proud to continue our partnership with the U.S. Navy to build and deliver the capable Freedom-class LCS to the fleet,” Lockheed's vice president and general manager of Littoral Ships and Systems, Joe North, said in the news release.
“Over 12,000 people and 500 suppliers in 37 states contribute to this critical program and will continue to do so as we transition to the new Freedom-class Frigate in the coming years," he said.
Austal, which will build LCS 26, now has seven of the ships at various stages of construction in its shipyard in Mobile, Alabama.
“It is pleasing to see the Navy’s ongoing confidence in Austal’s ability to produce these high quality vessels," Austal Chief Executive Officer Andrew Bellamy said in a news release.
“We are working hard to increase production efficiencies and reduce costs as the program matures and look forward to constructing the newly funded ship, which secures work at our US shipyard through to [calendar year] 2021," he added.
The Navy is budgeted to spend almost $30 billion -- $28.9 billion -- to buy a total of 40 of the vessels, down from a previously planned quantity of 55 ships, according to recently released budget documents.
In a December memo to Navy Secretary Ray Mabus, Defense Secretary Ashton Carter said the Navy has "overemphasized" its investment in shipbuilding at the expense of other capabilities such as fighter jet upgrades.