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Groton — The Navy has awarded Electric Boat a contract worth nearly $2 billion to continue early design work on a new class of ballistic-missile submarines.
The contract, awarded Friday, spans five years — fiscal 2013 through 2017 — and is the first submarine research and development contract to feature financial incentives directly tied to reducing the program's costs, according to the Navy.
Most designers and engineers at EB's New London offices are focused on creating the ballistic-missile sub that will replace the Ohio class. It's the first new design of a ballistic-missile sub in 40 years.
"The Navy established a structured series of incentives to motivate General Dynamics-Electric Boat and the government to further innovation to lower nonrecurring engineering costs, construction costs and operation and support costs," Capt. William J. Brougham, the Ohio Replacement Program manager, said in a statement.
Robert Hamilton, EB spokesman, said the Navy "has stated that it expects this contract will provide it with the best quality product at the lowest cost, and we agree."
EB, along with its subcontractors and vendors, plans to cut costs using the Design for Affordability Program the company developed in an effort to reduce the price of Virginia-class submarines.
"This contract will provide stability to our engineering and design workforce as well as the supplier base, and ensure that the schedule for the nation's strategic deterrent submarine is maintained," Hamilton said.
Rear Adm. Dave Johnson, the program executive officer for submarines, said the $1.85 billion contract moves the Ohio replacement forward in setting the program's technical foundation, from ship specifications and system descriptions to design products.
"We will ensure that every dollar is spent wisely while designing a submarine class that will be in service through 2083," Johnson said in the statement.
The Navy plans to purchase 12 ballistic-missile subs to replace the current fleet of 14 Ohio-class boats. Construction on the lead ship is scheduled to begin in 2021.
"This contract will leverage the unique skills of Electric Boat's submarine and design workforce in designing a capable and cost-effective replacement for our Ohio-class submarines," said U.S. Rep. Joe Courtney, D-2nd District. "For southeastern Connecticut, this is welcome news for ensuring stability in the historic gains our region has made in growing our submarine design workforce and a vote of confidence for the talented men and women of Electric Boat."
In addition, the Navy awarded EB a $2.5 billion construction contract this week for the next two Virginia-class submarines in 2013, the South Dakota and the Delaware, Courtney said.