This post has been updated to correct that Ingalls won the option for a third DDG not because it offered the lower cost but because of industrial base considerations.
Ingalls Shipbuilding in Mississippi won a second Arleigh Burke-class destroyer for the current fiscal year, after competing with General Dynamics Bath Iron Works for the additional hull Congress funded.
The Navy in September 2018 awarded 10 Flight III DDGs to the two builders – six to Ingalls, four to BIW – as a baseline for the program if Congress continued to fund it at a two-a-year rate. The Navy had hoped to move to three a year, though, and the contract included a competition mechanism for BIW and Ingalls if funds were available to buy a third ship in any given fiscal year: when compiling their bids in 2018, the companies were allowed to include additional pricing information that took into account efficiencies gained by buying in bulk and building two ships a year instead of just one.
In Fiscal Year 2018, Congress awarded money for just two ships, and both went to Ingalls, in an acknowledgement that BIW had a backlog of work it needed to get through. For 2019 through 2022, each yard was given one ship, with the potential to compete for a second if funds were available.
In FY 2019, BIW ended up winning the third ship when money was authorized and appropriated by lawmakers to bump up to three hulls a year, though the Navy and the yard never said whether the award was made based on lower cost or workload and industrial base considerations.
Today, the Navy awarded a third FY 2020 ship to Ingalls due to industrial base considerations, USNI News understands.
“The FY 2020 [National Defense Authorization Act] and FY 2020 Consolidated Appropriations Act included funding for three (3) FY 2020 DDG 51 class ships. For the third ship, the Navy provided both shipbuilders the opportunity to revise the FY 2020 option ship price (subject only to downward adjustment) established at award. Both shipbuilders provided revised pricing and the Navy selected HII Ingalls as the successful offeror,” Navy spokesman Capt. Danny Hernandez told USNI News about the award to Ingalls.
According to a Defense Department contract announcement, “Huntington Ingalls Inc., Pascagoula, Mississippi, is awarded a $936,032,309 fixed-price-incentive-firm-target modification to previously awarded contract N00024-18-C-2307 to exercise the fiscal 2020 option for the construction of a USS Arleigh Burke DDG-51 class ship (DDG 135). This modification also includes options for engineering change proposals, design budgeting requirements and post-delivery availabilities on the fiscal 2020 option ship. If exercised, the cumulative value of the fiscal 2020 option ship will increase to $947,695,871.”
Though Ingalls now has seven ships in the current FY 2018-2022 multiyear contract to BIW’s five, the Maine shipyard has actually built and delivered more over the life of the program, with 47 of the 89 awarded DDGs going to BIW and 42 to Ingalls, Hernandez said. BIW has delivered 36 to date, and Ingalls has delivered 32.
