The following is the Feb. 3, 2014 Congressional Research Service report: Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress.
The Navy has been procuring Virginia (SSN-774) class nuclear-powered attack submarines since FY1998.
The two Virginia-class boats requested for FY2014 are to be the 19th and 20th boats in the class, and the first two in a 10-boat Virginia class multiyear-procurement (MYP) contract for the period FY2014-FY2018.
Congress granted authority for this MYP contract as part of its action on the FY2013 Department of Defense (DOD) budget. The Navy’s FY2013 budget submission had projected one Virginia-class boat in FY2014.
Congress, as part of its action on the FY2013 DOD budget, added AP funding in FY2013 to support the procurement of a second Virginia-class boat in FY2014. The Navy’s inclusion of a second Virginia-class boat in FY2014 (which increases from 9 to 10 the number of boats in the FY2014-FY2018 MYP contract) follows through on this congressional action.
The Navy’s proposed FY2014 budget estimates the combined procurement cost of the two boats requested for FY2014 at $5,414.2 million. The two boats have received a total of $1,530.8 million in prior-year advance procurement (AP) funding (although this figure may be reduced by the March 1, 2013, sequester), leaving another $3,883.4 million to complete the funding for the two boats.
The Navy’s proposed FY2014 budget requested $5,285.3 million in procurement and AP funding for the Virginia class program. This figure includes:
• $2,930.7 million in procurement funding to complete the procurement cost of the first boat requested for FY2014, and to pay part of the procurement cost of the second boat requested for FY2014;
• $1,612.0 million in AP funding for Virginia-class boats to be procured in future fiscal years; and
• $742.6 million in AP funding for Economic Order Quantity (EOQ) purchases (i.e., batch orders) of selected components of the 10 Virginia-class boats to be procured under the FY2014-FY2018 MYP contract. EOQ purchases are a regular feature of the first year or two or an MYP contract.