The Navy and its lead builder for a new class of ballistic-missile submarines have hammered out their path forward for how to fully fund the first two boats, the head of Navy procurement told reporters on Monday.
The agreement, pending Department of Defense and congressional approval, lays out a cost and incentive schedule for the full-rate construction contract options for $9.5 billion for first two Columbia-class (SSBN-826) boats.
“The contract modification includes a fully priced option for the construction of SSBN 826 and SSBN 827, associated design and engineering support,” reads the Monday announcement. “For SSBN 827, the modification covers advance procurement, advance construction and subsequent fiscal 2024 construction of SSBN 827. This option is required to support October 2020 construction start of the SSBN 826.”
The pending option “is the result of a lot of hard work between the shipbuilder teams and our teams to negotiate the first two ships’ cost,” Assistant Secretary of the Navy for Research, Development and Acquisition James Geurts told reporters on Monday.
“That will allow us to begin full-rate construction of the first ship, begin advanced construction of the second ship with the intent then to begin full construction of that second ship in FY ’24.”
The full-construction option comes attached to an $869-million contract that continues the incremental funding for the submarine production as well as support for the U.K. Dreadnaught-class nuclear ballistic missile submarine program. The U.S. and U.K. boomers share the same quad-pack missile tubes as a cost-savings measure.
The step is key to keeping the Navy’s top acquisition priority on track, Geurts and Program Executive Officer for Columbia Rear Adm. Scott Pappano told reporters.
There is very little flexibility in the schedule for the new class of SSBNs. The future Columbia is set to deliver in 2028 and undertake its firsts nuclear strategic deterrent patrol in 2031 as the first Ohio SSBNs begin to retire, Geurts said.
With non-reoccurring engineering expenses and research and development costs, the lead ship is expected to cost about $14.4 billion, according to the Congressional Research Service. The second ship will cost about $9.2 billion, according to Navy estimates. The Navy is facing Pentagon cost caps to bring the total cost per-hull down to $8 billion.