U.S. Naval Sea Systems Command awarded a $17.8 billion contract for ten Block IV Virginia-class attack submarines (SSN-774) to prime contractor General Dynamic Electric Boat in the largest single shipbuilding contract in the service’s history, NAVSEA said on Monday in a late afternoon statement.
“The Block IV award is the largest shipbuilding contract in U.S. Navy history in terms of total dollar value and builds upon the Virginia-class program’s successful Navy and industry relationship,” Vice Adm. David Johnson, NAVSEA’s program executive officer for submarines (PEO Subs) said in the statement.
To compare, the service’s total shipbuilding budget request for Fiscal Year 2015 was $14.4 billion.
The “fixed-price incentive fee, multiyear procurement contract with economic order quantity,” continues the Virginia’s two-a-year build rate through 2018 and “saved over $2 billion across government and contractor furnished equipment, effectively getting ten ships for the price of nine,” according to NAVSEA.
“The Block IV contract is the culmination of 20 months of work between the Navy and shipbuilders,” according to the statement.
Electric Boat builds the submarine along with Huntington Ingalls Industries Newport News Shipbuilding.
The ships follow a contract for eight Block III Virginia ships which have incorporated a so-called design for affordability scheme that seeks to reduce the cost of the submarines by building in efficiencies into the construction process as well as the operation and maintenance of the boats.
The cost per Block IV Virginia is about $1.78 billion over the contract, compared to $2.6 billion for the first Block III boat.
Block III boats changed 40 percent of the bow to include two Multiple All Up Round Canisters (MAC) ahead of the boat’s sail that hold 12 Tomahawk Land Attack Missiles apiece as well as a Large Aperture Bow (LAB) array that requires fewer parts and less maintenance than previous Virginia sonars.
Block IV boats will build on the improvements to allow the boats to spend less time in the yard — from four major maintenance periods to three — and to squeeze an extra deployment out of the design.
The Virginia-class program has been the most stable shipbuilding program in the U.S. Navy for the last decade, with cost and schedule per submarine consistently coming down over the program.
Earlier this month, NAVSEA said it would delay the commissioning of the first Block III boat — North Dakota (SSN-784) — pending a recertification of parts of the bow and the stern and an inspection of 58 components supplied by a third party vendor.
However, the ship is still expected to deliver to the Navy ahead of its 66-month build schedule.