Correction: An earlier version of this story misstated the number of boats awarded to General Dynamics Electric Boat.
WASHINGTON — The U.S. Navy on Monday awarded its largest-ever shipbuilding contract to General Dynamics Electric Boat for construction of nine Virginia-class attack submarines, eight of which will have an 84-foot section that boosts the boat’s strike missile capacity.
The contract for the Block V Virginia-class subs, worth $22.2 billion, could grow by another $2 billion if the Navy exercises an option for a 10th boat. The contract is for two fewer boats than the 11 proposed by the fleet in this year’s budget submission.
“A lot of hard work across the whole team to structure the contract in such a way as to balance risk between the government and the shipbuilder,” James Geurts, the Navy’s top acquisition official, said during a roundtable with members of the media to announce the contract signing. “If the shipbuilder delivers on target, the multiyear savings will be 16.5 percent, or $4.4 billion in savings. So it’s a pretty important day for us.”
Guerts, the assistant secretary of the Navy for research, acquisition and development, said that when you add government-furnished equipment into the contract, the total value of the program swells to about $35 billion.
The first boat in Block V, SSN 802, is currently under construction but does not have the Virginia Payload Module, or VPM. The next boat, 803, will have VPM. All of the boats will have an upgraded acoustics suite.
In the briefing, Navy officials said that if the service opts for all 10 boats, six of the boats would be constructed at Electric Boat’s partner yard, Huntington Ingalls Newport News, and four would be built at Electric Boat.
The move to put most of the work in Newport News was done to balance the increased workload at Electric Boat with the start of the Columbia class, the next generation of ballistic missile submarines slated to begin construction this year.
In a statement, Electric Boat President Kevin Graney said the contract provides stability for his shipyard.
“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,” Graney said.
Dave Bolcar, Newport News’ vice president of submarine construction, likewise hailed the contract as a means of stability in the submarine industrial base.
"Today’s contract maintains the Virginia-class build rate that provides continued stability to our workforce and to the 5,000 suppliers that will support submarines for the next decade,” he said. "This contract also continues the two per year construction cadence essential to sustaining production efficiencies, while ensuring our national security and the Navy’s continued undersea superiority.”