Navy inks $22.2 billion contract with Electric Boat for at least nine new submarines
The Navy has signed a $22.2 billion contract with Electric Boat to build at least nine Virginia-class attack submarines over the next five years.
The contract includes the option to buy a 10th submarine, but that purchase is contingent on a six-month review of submarine production at EB and Newport News Shipbuilding, which together build two Virginia-class submarines per year.
With construction starting soon on a new class of ballistic missile submarines, a top priority for the Navy given these submarines will be armed with nuclear weapons, the Navy wants to ensure that EB, Newport News and their suppliers can handle that amount of work especially since the Virginia program has faced delays due to welding issues and materials not being delivered on time.
The Navy's concern delayed the signing of the contract, which covers the fiscal years 2019 through 2023. The submarines will join the Navy's fleet starting in 2025 through 2029.
The new Virginia submarines will involve more work and cost more than previous versions. An 85-foot section will be added to the submarines to enable them to store more weapons, deliver special operations forces and other uses. That will add $500 million to the construction cost, bringing the total price per submarine to $3.2 billion.
"This is not your father's submarine. This is a new, much more enhanced project," said U.S. Rep. Joe Courtney, D-2nd District, who is chairman of the congressional subcommittee with oversight of Navy shipbuilding.
Up to 12 submarines could be built under the contract. Courtney, who's pushed for more submarines to be built to help address a dip in the size of the attack fleet expected in the late 2020s, said Navy officials have told him they'd like to build 10 submarines over the next five years.
The contract includes $400 million to buy materials that would be needed to build the 10th submarine. Certain materials take longer to procure so they are purchased several years before construction starts. Courtney said the $400 million, which he called a down payment, is a signal that the Navy is serious about building the 10th submarine. If the 10th submarine is built that would raise the value of the contract to $24 billion.
The contract also includes options to build additional submarines in both 2022 and 2023, the result of Courtney's efforts in Congress, though Congress would still need to appropriate the money for those submarines.
"This contract allows for our shipbuilding team, our suppliers and our employees to plan ahead so that we can continue to deliver submarines of unmatched quality, stealth and lethality," EB President Kevin M. Graney said in a statement.
In statements, Connecticut's Democratic senators, Richard Blumenthal and Chris Murphy, said the contract is good news for EB, which employs about 17,000 people, and would create more skilled jobs.
"This new contract will fuel thousands of jobs in our state and provide long-term stability to the thousands of small Connecticut companies that support our defense manufacturing sector. This is a great win for our state," Murphy said.
"The contract is critical for our national security, and just as important the future of highly skilled Connecticut jobs," Blumenthal added.
The Navy buys submarines in groups known as blocks, and the previous contract included 10 submarines for $17.6 billion, then the largest shipbuilding contract in Navy history.