WASHINGTON Dec 27 The U.S. Navy last week
awarded submarine contracts worth up to $4.5 billion to General
Dynamics Corp and Huntington Ingalls Industries Inc.
, securing the funds from automatic budget cuts if
Congress cannot reach agreement on other ways to reduce U.S.
The Navy awarded General Dynamics a five-year contract
valued at up to $1.99 billion if all options are exercised, for
research and development work on a new submarine to replace the
current Ohio-class vessels, which carry nuclear weapons.
It awarded a separate contract worth nearly $2.5 billion for
construction of two smaller Virginia-class submarines, work that
will be split between General Dynamics' Electric Boat division,
based in Groton, Connecticut, and Huntington Ingalls' Newport
Connecticut Representative Joe Courtney welcomed the
contract news, saying it would help stabilize the local
workforce and ensure continued production of submarines, which
he described as "a key component of our national security."
He said hundreds of new engineers and designers had already
been hired to work on the new submarine program at a New London,
"This contract will leverage the unique skills of Electric
Boat's submarine and design workforce in designing a capable and
cost effective replacement for our Ohio class submarines,"
Courtney said, noting that Electric Boat had a record of
building submarines ahead of schedule and under budget.
General Dynamics spokesman Kendell Pease said the orders
demonstrated the continued and increasing importance of
submarines to U.S. national security, particularly given the
Obama administration's planned pivot to the Asia-Pacific region.
"As we move to the Asia Pacific region, submarines will
become increasingly important," Pease said.
The Pentagon announced the cost-plus, fixed-fee contract for
design work on the Ohio-class replacement submarine late last
Friday, and said it included special incentives. The contract is
worth up to $1.99 billion if all options are exercised.
The Pentagon said the contract included design work on the
new submarine and continued work on a new common missile
compartment being developed jointly by the U.S. Navy and
Britain, as well as cost reduction initiatives and full-scale
prototype manufacturing and assembly.
Most of the work will be done at General Dynamics'
Connecticut facility, but about 7 percent of the work will be
done by Huntington Ingalls. The Navy eventually plans to buy 12
new submarines to replace the current fleet of aging Ohio-class
submarines, with construction slated to begin in 2021.
The Navy also awarded a contract to General Dynamics and
Huntington Ingalls for construction of the last two
Virginia-class submarines under a multi-year contract approved
by Congress in fiscal 2008 that locked in a two-a-year
General Dynamics and Huntington Ingalls split the work on
the Virginia-class submarines.