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Groton — Navy officials have signed a $17.6 billion contract with Electric Boat, committing the service to buy the next 10 Virginia-class submarines.
For the Groton shipyard, which has faced a cycle of layoffs and recalls in recent years, the contract represents nearly a decade’s worth of work.
“This award has great significance for the U.S. Navy, our company and the entire submarine industrial base,” Jeffrey S. Geiger, president of Electric Boat, said in a statement. “By continuing to produce two ships per year, the Navy and industry team retains the stability required to achieve increased efficiencies, providing the fleet with the submarines it needs to sustain the nation’s undersea dominance.”
After months of negotiations, the Navy and EB signed the contract for the construction of 10 Virginia-class submarines Monday night. Under the five-year agreement, EB’s Groton shipyard and Newport News Shipbuilding in Virginia, the subcontractor, will jointly build two ships per year from fiscal 2014 to 2018.
A previous budget proposal had capped the purchase of Virginia-class submarines at nine, but Congress then directed the military to include 10 submarines in its next multi-year contract and said the Navy could pay for the parts and services for the submarines over a set number of years instead of having to fund the ships fully upfront.
The group of submarines is collectively known as Block IV and construction of the first in the block, SSN 792, begins May 1. The 10th ship is scheduled to be delivered in 2023.
U.S. Rep. Joe Courtney,
D-2nd District, said the contract provides not only a stable horizon for the submarine manufacturer, but also for the hundreds of suppliers of submarine parts in the state. There are more than 350 submarine suppliers in Connecticut, of which more than one-third are located in eastern Connecticut.
“This is a real milestone moment for southeastern Connecticut’s economy and for the country’s national defense,” he said.
U.S. Sen. Richard Blumenthal, D-Conn., said the contract is a “huge, historic win for our national security and for the dedicated men and women who make the strongest and stealthiest weapons system at sea today.”
“The Navy’s decision is the result of an extraordinary record of deliveries ahead of time and under budget, as well as the performance of these submarines under adverse conditions when the challenges are highest,” he said. “So I’m looking forward to continuing the battle to make sure the nation recognizes the importance of these submarines to our national security because fiscal austerity will be with us for some time.”
Scott Bates, president of The Center for National Policy, a Washington, D.C.-based think tank, called it a “banner day.”
“For America, this is a strong statement that we will retain naval supremacy in the Pacific, providing security and stability to ourselves and our allies,” he said. “For our region, this guarantees we preserve our industrial base for years to come.”
A Stonington native whose father worked at EB, Bates said he “couldn’t be more proud of the Navy’s decision to recognize that we build the best.”
EB and Newport News Shipbuilding have delivered 10 Virginia-class submarines to the Navy so far and eight more are currently under construction, out of a planned 30-ship class. The previous $14 billion contract for eight submarines was signed in 2008.
EB currently employs about 12,000 people, and the Virginia-class submarines are initially based at the Naval Submarine Base in Groton. New Virginia-class submarines cost about $2.6 billion each.
“This contract reflects the tremendous talent of our highly skilled workforce,” Gov. Dannel P. Malloy said in a statement. “The men and women of Electric Boat continue to deliver each Virginia class boat ahead of schedule and under budget and are routinely held up as the model of efficiency and quality in a major DOD acquisition program.”
Courtney, a staunch advocate of the Virginia-class program, said he thinks the contract would have been signed earlier if the government had not shut down in October and the automatic budget cuts under sequestration had not been enacted.
But to have the contract signed in this budget climate, Courtney said, is “a very powerful validation of the work that people do at EB.”