Navy awards up to $17.1 billion submarine contract modification to General Dynamics Electric Boat
The modification, along with another $1.2 billion to prime contractor HII, is meant to fund two Virginia-class subs.
The Virginia-class attack submarine Minnesota (SSN-783) is under construction at Huntington Ingalls Newport News Shipbuilding. (U.S. Navy photo courtesy of Newport News Shipbuilding/Released)
WASHINGTON — The Navy has awarded a long-awaited contract modification to General Dynamics Electric Boat, and major subcontractor HII, for the construction of two Virginia-class submarines appropriated through fiscal 2024 funding, according to a service statement.
The contract modification awarded to EB is worth $12.4 billion and has a total value of $17.1 billion if all options are exercised.
“We recently re-negotiated the planned contract to deliver this critical capability, and appropriately share risk between the Navy and industry,” said Navy Secretary John Phelan in the Navy statement. “We will be looking at all future contracts with a similar lens to ensure the appropriate level of risk sharing and value to the American taxpayer.”
Contract modifications were provided both to Electric Boat as well as submarine prime contractor HII “to increase workforce support and investment across the nuclear shipbuilding programs,” the statement added. The contract modification awarded to HII is worth $1.2 billion.
The service currently has taken delivery of 24 Virginia-class submarines and has an additional 16 under contract.
“The contract award is the result of a highly coordinated contracting effort across the nuclear shipbuilding enterprise, to promote stability at critical suppliers as the submarine industrial base ramps up to meet a historic increase in demand for submarine production,” said Rear Adm. Jon Rucker, the program executive officer for attack submarines. “We are continuing to work closely with the shipbuilders to improve construction schedules to support the Navy’s need for a larger more lethal force.”
Towards the end of the Biden administration, the two subs were at the center of a funding controversy when the service sent an unexpected supplemental funding request to Congress seeking to shore up shortfalls for both boats. Lawmakers later admonished the service, stating the Navy failed to be transparent with lawmakers and the Office of Management and Budget while negotiating a plan with industry.
“We appreciate the teamwork that resulted in these critical national security assets being put under contract,” Jason Ward, HII’s Newport News Shipbuilding vice president of submarine construction, said in a statement following the announcement today. “We understand the advantage Virginia-class submarines bring to the sailors who operate them, and our shipbuilders are working with diligence to deliver them to the fleet.”
Mark Rayha, president of General Dynamics Electric Boat, in a statement said, “Over the past two years, we successfully worked with the Navy, Congress and the administration to secure funds that enable us to increase wages for the nuclear-powered vessel workforce and allow for significant additional investments in capacity, shipyard processes and systems.”
“This contract modification validates the unique and important role submarines and submarine shipbuilders play in our national defense,” the statement continues.
