Office of Military Affairs cites ‘very bright’ future for Connecticut defense economy
Connecticut companies in 2021 received $11.1 billion in defense prime contracts – meaning contracts valued at $7.5 million or more – and “the future is extremely bright for Connecticut’s submarine industrial base,” according to the recently released annual report from the Connecticut Office of Military Affairs, for fiscal year 2022.
The 2022 report from the Submarine Base Industrial Council states that Connecticut has 352 first-tier submarine industrial base suppliers, who received $1.2 billion in purchase orders for specialized components in 2022, up from $1.1 billion in 2021 and $864.2 million in 2020. Connecticut ranked sixth last year in supplier sub-contract amounts.
Connecticut ranked eighth in contracts for defense spending in fiscal year 2021 - down from sixth the previous year, because New York and Massachusetts ranked higher due to large Department of Defense contracts for COVID-19 vaccines and treatment. The state ranked fourth for defense spending as a percentage of gross domestic product, at 6.2%, compared to a nationwide average of 2.3%.
Since OMA was established in 2007, annual defense contacts in the state have generally been in the $6 billion to $14 billion range, but there have been spikes in some years: $27.1 billion in 2014, $23 billion in 2016, and $37.1 billion in 2019, when the Navy awarded Electric Boat a $22.2 billion contract to build nine Virginia-class submarines.
The report stressed that while this "can give the impression of economic instability in the Connecticut defense industrial base," this is not the case because actual amounts paid to contractors "are spread out over many years."
OMA Executive Director Bob Ross said it was a challenge for him to make sure people didn't interpret the $37.1 billion year as a new normal, but said it provided contractors certainty over the next decade, so they can start doing advanced procurement and get suppliers lined up.
He said while all these contracts are great news for Connecticut, a big focal point for him in 2023 will be attracting the necessary workforce.
When it comes to suppliers, Ross said while it's very expensive and difficult for companies to become subcontractors, it's worth it in the long run because "there's going to be decades of opportunity" at EB, Sikorsky and Pratt & Whitney. Ross said he's not seeing more businesses pivot to become suppliers, but he's also not aware of any trouble these three contractors are having attracting suppliers.
The report noted that Connecticut “did very well” in defense authorization and appropriations bills last fiscal year, including a historic $12.5 billion in the National Defense Authorization Act for submarine construction, repair, and research and development.
The NDAA also included $4.23 billion for two Virginia-class submarines, with Electric Boat as the prime contractor; $3 billion for Columbia-class submarines; $8.7 billion for 85 F-35 Joint Strike Fighter aircraft, with East Hartford’s Pratt & Whitney as the sole manufacturer; and $1.5 billion for 11 CH-53K King Stallion helicopters, built by Stratford-based Sikorsky.
The omnibus appropriations bill also included $50 million for Coast Guard Museum construction.
The Coast Guard held a ceremonial keel-laying ceremony on Aug. 19, 2022 to mark the start of construction, and bulkhead and fill work began a few weeks later.
Naval Submarine Base
The missions of OMA include coordinating efforts to prevent the closure or downsizing of the Naval Submarine Base in Groton, advocating for Connecticut’s defense industry as a significant part of the state economy, and enhancing the quality of life of military families.
DOD twice targeted the sub base for closure in the Base Realignment and Closure (BRAC) process, in 1993 and 2005. The OMA annual report states that subject matter experts believe DOD will eventually request another BRAC round but it may look very different, and that the sub base is "in a much better position to withstand another round of BRAC."
"Previous rounds focused on cost savings and strategic basing," the report states. "Future rounds will likely add new criteria, including the quality of host community public schools, state-level efforts to address military spouse unemployment and licensure reciprocity, and relocations required due to climate change and sea level rise.”
The report cited the "remarkable transformation" the sub base is undergoing as old infrastructure is replaced.
Also in 2021, United Service Organizations opened a new USO Center at the Naval Submarine Base. Looking ahead, a new floating pier at the Submarine Force Museum is expected to be operational for the 2023 season of the Thames River Heritage Park water taxi.