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December 19, 2003

$222 million contract for Electric Boat

General Dynamics Electric Boat Corp. (GD/EB) is being awarded a cost plus incentive fee contract worth $222 million for the conversion of the first Ohio Class Guided Missile Submarine (SSGN), USS Ohio (SSGN 726), and for Long Lead Time Material (LLTM) and Conversion Installation Planning for the Conversion of Ohio Class Ballistic Missile Submarines (SSBNs), the USS Michigan (SSBN 727) and the USS Georgia (SSBN 729), to SSGN 727 and SSGN 729.

Upon completion of their conversions, the SSGNs will be able to carry up to 154 Tomahawk missiles and to function as the host platform for 66 special operations forces (SOF).

Secretary of the Navy Gordon R. England, said, "The SSGN is an example of the Navy's innovative transformation that supports our joint warfighters. With well over 20 years of life remaining, the SSGN conversion will significantly increase the strike capability and the flexibility of our special forces."

Yesterday's award modifies a contract with GD/EB originally awarded on Sept. 26, 2002, for SSGN detail design, long lead time material, and conversion planning. The contract modification includes a cost plus incentive fee contract for the conversion of SSGN 726 and a cost plus fixed fee contract with performance incentive fee for the installation planning and LLTM for SSGN 727 and SSGN 729. The contract also provides priced options totaling $152 million for the fiscal 2004 Conversion of SSBN 728, the USS Florida to SSGN 728 and for the completion of Conversion Installation Planning for SSGN 729.

Under an innovative teaming arrangement, the SSGN conversions are being conducted in conjunction with engineered refueling overhauls (EROs) performed by Puget Sound Naval Shipyard and Norfolk Naval Shipyard. GD/EB is the SSGN conversion manager, and provides labor and manufactured components to support conversion execution. The Naval Shipyards perform the EROs, remove affected equipment and provide services and labor to support GD/EB.

Speaking about this contract, Assistant Secretary of the Navy for Research, Development and Acquisition John J. Young Jr., said, "This agreement shares risk equitably between the government and industry, and it provides strong incentives to GD/EB to assist the return of these vital submarines to the fleet on an aggressive schedule. The conversion teaming arrangement implemented by this contract best uses the experience, facilities, and labor of government and industry to provide an unprecedented capability to the nation."

SSGN 726 began its ERO at Puget Sound Naval Shipyard in November 2002, and began conversion work in November 2003. SSGN 728 began its ERO at Norfolk Naval Shipyard in August 2003, with conversion start planned in April 2004. Both the SSGN 726 and the SSGN 728 will complete conversion in fiscal 2006

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