Flurry of Contracts Spark US Navy Shipbuilding

SAN DIEGO (Dec. 2, 2010) The amphibious assault ship USS Bonhomme Richard (LHD 6) is in dry dock at NASSCO Shipyard. Bonhomme Richard will undergo scheduled maintenance until April 2011. (U.S. Navy photo by Chief Mass Communication Specialist Joe Kane/Released)

The past few days have been good for a number of the US Navy’s shipbuilders. The service issued building contracts for two new destroyers, three littoral combat ships (LCS) and two new landing craft. Long-lead funding was issued for another LCS, and even the Coast Guard got in on the action, ordering another large National Security Cutter. A destroyer was launched, a new amphibious ship christened, and a high-speed catamaran vessel successfully completed sea trials.

Down at Ingalls Shipbuilding in Pascagoula, Mississippi, the DDG 51 Arleigh Burke-class destroyer John Finn (DDG 113) was launched on March 28. The ship is the first of the DDG 51 restarts, the result of a 2008 Navy decision to cap production of DDG 1000 Zumwalt-class destroyers at three ships and return to building Burkes. Two yards build DDG 51s – Ingalls, and the General Dynamics Bath Iron Works yard in Bath, Maine. Before 2008, the Navy’s plan was to stop buying Burkes after the Michael Murphy (DDG 112), delivered in 2012. The John Finn will be christened May 2, and is expected to be delivered in 2016.

Ingalls also is building the Ralph Johnson (DDG 114), Paul Ignatius (DDG 117) and Delbert D. Black (DDG 119), and the current block buy includes DDGs 121, 123 and 125. Bath is at work on the Ralph Peralta (DDG 115), Thomas Hudner (DDG 116), Daniel Inouye (DDG 118) and the yet-to-be-named DDG 120. The DDG block buy for Bath also includes DDGs 122, 124 and 126.

On March 27, both destroyer-building shipyards received construction contracts for their next destroyers. Ingalls was awarded a $604.3 million contract modification to build the yet-to-be-named DDG 121, while Bath received a $610.4 million contract modification to build DDG 122. Both ships were funded in the 2015 defense appropriations act.

Construction of the remainder of the block buy ships are to be funded in 2016 and 2017 under the Navy’s existing two-destroyers-per-year acquisition construct.

On March 31, the Navy awarded contract modifications to its two LCS builders. Lockheed Martin received $362 million to fund construction of one Freedom-class ship, LCS 21, while Austal USA was awarded $691 million for two Independence-class ships, LCSs 22 and 24. Lockheed also received $79 million for advanced procurement of LCS 23. The full-funding ships were provided for in the 2015 budget, while full funding for LCS 23 is part of the 2016 request.

Lockheed builds the Freedom class at Fincantieri Marinette Marine in Marinette, Wisconsin, while Austal USA’s shipyard for the Independence class is in Mobile, Alabama. To date, all odd-numbered ships are Freedom LCS 1-class vessels, all even-numbered ships belong to the Independence LCS 2 class.

The Navy has announced no plans to deviate from evenly distributing construction of the ships between the two yards. As detailed in the latest 30-year shipbuilding plan, sent to Congress April 2, the service plans to request three LCSs per year through 2025. The latest LCS contracts were initially covered by 10-ship block buys awarded to each shipyard in 2010, covering LCSs 5 through 24. A new acquisition strategy for LCSs 25 through 32 is expected to be announced May 1, and the Navy plans to shift to LCS frigate construction no later than LCS 33. A total of 52 LCSs and LCS frigates are planned.

The Navy noted that LCS costs remain significantly under the congressional cost cap of $480 million per ship, expressed in 2009 dollars, or $538 million in then-year, or current, values. The latest construction awards reflect an average price of $432 million in then-year dollars.

Both LCS shipyards are in full-rate production on their LCS variants. At Marinette, the Milwaukee (LCS 5) is about 97 percent complete, according to the Navy, and the Detroit (LCS 7) is about 80 percent complete. Both are scheduled to be delivered this year. Of next year’s ships, the Little Rock (LCS 9) is about 68 percent complete while the Sioux City is at 53 percent.

At Austal USA, the Jackson (LCS 6) also is at 97 percent completion, while the Montgomery (LCS 8) is at 89 percent. Both are to be delivered in 2015. For delivery in 2016, the Gabrielle Giffords (LCS 10) is at 82 percent completion, while the Omaha (LCS 12) is at 60 percent.

Austal USA also is about half-way through production of ten Joint High Speed Vessels (JHSVs). The Trenton (JHSV 5) completed acceptance trials March 13 and will shortly be delivered to the Navy’sMilitary Sealift Command. The next ship, the Brunswick (JHSV 6), is to be floated off in mid-May. Construction contracts for all ten ships, through the Burlington (JHSV 10), have already been awarded.

At Ingalls, the new San Antonio LPD 17-class amphibious ship John P. Murtha (LPD 26) was ceremonially christened on March 21, having been launched on Oct. 30. The ship is scheduled to be delivered in 2016.

At the other end of the amphibious ship scale, Textron of New Orleans, Louisiana, received an $84 million contract modification on March 31 to build two new Landing Craft Air Cushion vehicles, LCACs 102 and 103. The craft are part of the Ship to Shore Connector (SSC) program, developed to replace the existing fleet of LCACs. LCAC 101, first craft of the SSC program, was ordered last August from Textron.

Ingalls Shipbuilding got another boost March 31 with a $500 million fixed-price incentive contract to build the eighth and last National Security Cutter (NSC) for the US Coast Guard. The Midgett (WMSL 757) is scheduled to be delivered in 2019. The fifth NSC, James (WMSL 754), is scheduled to be delivered this year, with the Munro (WMSL 755) and Kimball (WMSL 756) following in successive years. The cutters are the most advanced ships ever built for the Coast Guard.

Details of some of the Navy contracts have been clouded by a shift in policy on how those contracts are announced. Destroyers, LCSs and JHSVs are often awarded under block buy, multi-ship contracts that can cover several years, while funding for each ship is provided under specific annual appropriations acts. Previously, the Navy included announcements of those individual contract modifications in the Pentagon’s daily contract announcements.

Now, however, a decision has been made to refrain from announcing contract modifications for shipbuilding, even as contract mods remain a routine part of the daily announcements for a variety of other programs, including ship overhauls.

“The contracts were already awarded,” explained Chris Johnson, a spokesman for the Naval Sea Systems Command. The latest awards, he said, “were just obligating funding against those original contracts.”

The service is under no obligation to break out individual awards as announcements, he said.

“Legally that’s the way to do it. Legally you are not required to announce contracts twice,” Johnson said. “We had been doing it particularly because of the interest in the LCS contracts. But this year we saw that interest waning so we decided not to do it. And in those cases, the companies put out their own press releases.”

While the Navy continues to respond to individual media requests for information, there are no announcements that might cover all program awards to multiple contractors. The shipbuilders themselves happily provide information on contracts awarded to them, but not to anyone else. The situation means that in some cases, local media outlets might give the impression their regional company is getting all the business, while it may be more extensive than that.

(c) 2015 EMBIN (Emerging Markets Business Information News) Provided by SyndiGate Media Inc. (Syndigate.info).


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