Navy awards DDG 51 contracts

JUNE 4, 2013 — The Navy yesterday awarded contracts for the construction of nine, (potentially ten) DDG 51 class ships over the FY 2013-2017 period. Huntington-Ingalls Industries’ Ingalls Shipbuilding was awarded five ships, one in each year, General Dynamics Bath Iron Works was awarded four ships, one in FY 2013 and one each year in 2015-2017. The BIW contract includes an option for an additional ship.

Huntington Ingalls Industries said that the Ingalls Shipbuilding contract has a total value of $3.33 billion and includes options for engineering change proposals, design budgeting requirements and post-delivery availabilities, which, if exercised, would bring the cumulative value of the contract to approximately $3.39 billion.

“Our shipbuilders have a strong legacy of building DDG 51s, a class of ships that for decades has proven itself to be the workhorse of the Navy’s fleet,” said DDG 51 Program Manager George Nungesser. “This contract award and, importantly, the Navy’s structuring of the program increases our momentum in realizing efficiencies generated from true serial production. We are committed to getting it right and doing it better every day, and we appreciate this opportunity to continue building the world’s finest surface combatants.”

The multi-year procurement allows Ingalls to build ships more efficiently by buying bulk material and moving the skilled workforce from ship to ship. It also ensures Ingalls will be building DDGs over the next decade.

Ingalls has delivered 28 DDG 51 destroyers to the Navy and currently has two more under construction. Ingalls started construction on John Finn (DDG 113) in September 2012 and will begin construction on Ralph Johnson (DDG 114) this summer.

The company’s 28th destroyer, William P. Lawrence (DDG 110), was commissioned on June 4, 2011, in Mobile, Ala. The ship was the most complete DDG at the time of its sea trials in the history of the program at Ingalls. Lessons learned from previous DDGs allowed Ingalls to deliver William P. Lawrence in less time and with fewer man-hours compared to several of the ships that immediately preceded it.

Bath Iron Works president Jeff Geiger says that the DDG 51contract “adds four ships to our workload in a fiscally challenging and highly competitive environment, and provides a clearer picture of our near-term future.”

“Continuation of the DDG 51 program provides important work for the men and women of Bath Iron Works and allows us to extend our record of delivering these critical surface combatants to the U.S. Navy,” said Mr. Geiger.

The option for the fifth ship, if exercised, would bring the total value of the contract to approximately $3.5 billion.

Geiger said the work of Maine’s congressional delegation was critical in support of the multi-year procurement approach.

“We appreciate the strong support of our senators and representatives, who have been instrumental in educating their colleagues and others about the vital national-security need for a strong naval fleet, and their advocacy on behalf of the shipbuilders of Maine,” Mr. Geiger said.

There are currently two DDG 51 destroyers in production at Bath Iron Works, Rafael Peralta (DDG 115) and Thomas Hudner (DDG 116).  The shipyard began fabrication on DDG 115 in November 2011, and delivery to the Navy is scheduled for 2016.  Fabrication on DDG 116 began in November 2012, and that ship is scheduled to be delivered to the Navy in 2017.

Here are the Pentagon announcements:

Huntington Ingalls Inc., Pascagoula, Miss., is being awarded a $3,331,476,001 fixed-price incentive, multiyear contract for construction of five DDG 51 class ships, one in each of fiscal 2013-2017. This contract includes options for engineering change proposals, design budgeting requirements and post-delivery availabilities, which, if exercised, would bring the cumulative value of this contract to $3,386,092,948. Work will be performed in Pascagoula, Miss. (56.3 percent), Cincinnati, Ohio (6.9 percent), Walpole, Mass. (4.5 percent), York, Pa. (1.9 percent), Camden, N.J. (1.4 percent), Erie, Pa. (1.3 percent), Charlottesville, Va. (1 percent), and other locations below 1 percent (26.7 percent), and is expected to be completed by July 2023. Contract funds will not expire at the end of the current fiscal year. This contract was procured via a limited competition between Huntington Ingalls Incorporated and Bath Iron Works pursuant to 10 United States Code (U.S.C.) 2304 (c) (3) and Federal Acquisition Regulation (FAR) 6.302-3 (Industrial Mobilization). The Naval Sea Systems Command, Washington, D.C., is the contracting activity (N00024-13-C-2307).

Bath Iron Works, Bath, Maine, is being awarded a $2,843,385,450 fixed-price incentive, multiyear contract for construction of four DDG 51 class ships, one in each of fiscal 2013 and 2015-2017. This contract includes options for construction of an additional DDG 51 class ship, engineering change proposals, design budgeting requirements and post-delivery availabilitieswhich, if exercised, would bring the cumulative value of this contract to $3,529,812,945. Work will be performed in Bath/Brunswick, Maine (58.9 percent), Cincinnati, Ohio (6.4 percent), Walpole, Mass. (4.4 percent), South Portland, Maine (2 percent), York, Pa. (1.9 percent), Charlottesville, Va. (1.8 percent), Coatesville, Pa. (1.7 percent), Erie, Pa. (1 percent), and other locations below 1 percent (21.9 percent), and is expected to be completed by July 2023. Contract funds will not expire at the end of the current fiscal year. This contract was procured via a limited competition between Bath Iron Works and Huntington Ingalls Incorporated pursuant to 10 United States Code (U.S.C.) 2304 (c) (3) and Federal Acquisition Regulation (FAR) 6.302-3 (Industrial Mobilization). The Naval Sea Systems Command, Washington, D.C., is the contracting activity (N00024-13-C-2305).