Naval Sea Systems Command (NAVSEA) awarded Huntington Ingalls Industries (HII) $4.29 billion in contracts for the planned second Gerald R. Ford-class aircraft carrier — John F. Kennedy (CVN-79) — amid promises for improved cost performance for the second carrier’s construction
The two contract announcements — released late Friday afternoon — set aside $3.35 billion for “all design and construction services and material” in a detail design and construction (DD&C) contract, according to the Friday contract award announcement.
The DD&C contract was paired with $941 million contract modification to a previously awarded construction services contract.
NAVSEA released a statement from Program Executive Officer (PEO) Carriers Rear Adm. Thomas Moore promising to increase efficiency and lower cost.
“With a stable design, mature requirements and an improved build process we will reduce construction hours by 18 percent, lower the cost to build the ship by almost $1 billion in real terms compared to CVN-78 and meet the cost cap,” Moore said in the Friday statement.
“Importantly, this contract also represents the first step in an ongoing process that will continue to reduce the cost of future ships of the class starting with (Enterprise) CVN 80.”
The Navy has struggled with cost growth on the Ford program with the projected price for first-in-class Gerald R. Ford (CVN-78) growing 23 percent from an estimate of $10.5 billion in Fiscal Year (FY) 2008 to $12.9 billion as part of the FY 2015 budget submission, according to an analysis of the service’s budget data by the Congressional Research Service.
Kennedy is estimated to cost $11.35 billion according to the Navy’s FY 2016 budget submission.
“There are a lot of reasons for that cost growth. Some of those are self inflicted some of those are for reasons we can’t control. About 40 percent of that cost growth is associated with government furnished equipment (GFE),” Moore said in late 2013.
“The other 60 percent: 30 percent is associated with the cost of changing the design or finishing design of the ship and 30 percent is associated with the construction performance.”
The GFE cost increases include growth in the cost of key technologies, namely General Atomics’ Electromagnetic Aircraft Launch System (EMALS) and Advanced Arresting Gear (AAG) and well as Raytheon’s one-off Dual Band Radar for Ford.
Kennedy is scheduled to have its keel laid this year and deliver to the Navy by 2022.
The following are the June 5, 2015 Pentagon contract announcements on the planned aircraft carrier John F. Kennedy (CVN-79).
Huntington Ingalls Inc., Newport News, Virginia, is being awarded a $3,352,611,760 fixed-price-incentive-firm target contract for all remaining detail design and construction (DD&C) efforts for aircraft carrier USS John F. Kennedy (CVN 79). This new contract award, along with simultaneously awarded modification N00024-09-C-2116, will provide all design and construction services and material for the construction of CVN 79, including necessary research studies; engineering; design; related development efforts; detail design and procurement of material; construction; life cycle support; logistics data and other data to support the DD&C of CVN 79. Work will be performed in Newport News, Virginia, and is expected to be complete by June 2022. Fiscal 2011, 2013, 2014, and 2015 shipbuilding and conversion (Navy) and fiscal 2015 research, development, test and evaluation funding in the amount of $188,031,383 will be obligated at time of award and funds will not expire at the end of the current fiscal year. The contract was not competitively procured in accordance with FAR 6.302-1 – only one responsible source and no other supplies or services will satisfy agency requirements. The Naval Sea Systems Command, Washington Navy Yard, Washington, District of Columbia, is the contracting activity (N00024-15-C-2114).
Huntington Ingalls Inc., Newport News, Virginia, is being awarded a $941,175,219 cost-plus-incentive-fee modification to previously awarded contract (N00024-09-C-2116) for labor to complete aircraft carrier USS John F. Kennedy (CVN 79) component and steel fabrication, selected construction unit assemblies, and all remaining direct material. This contract modification, along with simultaneously awarded new contract N00024-15-C-2114, will provide all design and construction services and material for the construction of CVN 79, including necessary research studies; engineering; design; related development efforts; detail design and procurement of material; construction; life cycle support; logistics data and other data to support the detail design and construction of CVN 79. Work will be performed in Newport News, Virginia, and is expected to be complete by June 2022. Fiscal 2015 shipbuilding and conversion (Navy) funding in the amount of $350,843,727 will be obligated at the time of award and funds will not expire at the end of the current fiscal year. The contract was not competitively procured in accordance with FAR 6.302-1 – only one responsible source and no other supplies or services will satisfy agency requirements. The Naval Sea Systems Command, Washington Navy Yard, Washington, District of Columbia, is the contracting activity.
