By Geoff Fein
The Navy Monday awarded General Dynamics [GD] a $14 billion multi-year contract to build eight Block III Virginia-class submarines.
The contract marks the effort by the Navy to move toward building two submarines per year in FY ’11.
The contract immediately provides $2.4 billion to fund construction of SSN-784, which has been named the North Dakota; advanced procurement for SSN-785; funding to purchase materials, parts and components for multiple ships at one time (SSN-785 through SSN-791, as yet unnamed), achieving significant economies of scale; and funding for additional cost-reduction design changes (known as Design For Affordability), according to General Dynamics.
The contract also meets the Chief of Naval Operations’ (CNO) and Virginia class program’s mandate to reduce acquisition costs by approximately 20 percent for the FY 2012 ships, the Navy said yesterday.
“This contract is a prime example of what you can do when you provide motivated people with a task and a deadline,” said Virginia Class Program Manager Capt. Michael Jabaley. As Jabaley explained, “in FY 2005, then-CNO Admiral Michael Mullen said that if we could cut $400 million from the $2.4 billion authorized for that year’s Virginia by FY 2012, the Navy would buy two Virginias each year. This contract achieves both goals-the price target and the two per year build rate.”
To reach its cost reduction goal, the Virginia Class Program established a three-element strategy. The first element, which accounts for one-half of the required savings, involved increasing production to two ships per year in an MYP contract in order to spread the shipyards’ overhead costs over more ships. To achieve the remaining cost savings, the Navy invested $600 million to redesign portions of the ship for more efficient production and to improve construction processes reducing the construction span from 84 to 60 months. This upfront investment reduced the Virginia Class’s total program cost by $4 billion – a 6:1 return on investment, the Navy said.
The cost reduction effort resulted in more than 100 discrete design changes that either reduced costs or shortened the construction span. The most extensive modification involves the replacement of the traditional sonar sphere with a Large Aperture Bow (LAB) Array and the twelve vertical launch tubes with two large diameter Virginia Payload Tubes (VPT). The LAB and VPTs, along with more than two-dozen associated modifications, save $40 million per submarine beginning with the FY ’12 ships, according to the Navy.
“While we focused on cost reduction as our primary goal, we paid attention to warfighting capability and life-cycle costs in making these changes,” said Rear Adm. William Hilarides, program executive officer for Submarines. In fact, the LAB Array uses life of the hull hydrophones that will provide improved passive listening capability over the traditional, transducer-populated sphere. Further, replacing 12 vertical launch tubes with two 92-inch VPTs not only reduces construction and life-cycle costs, but also significantly expands their ability to accept future payloads. “The payload tube interface is identical to the SSGN’s tubes so what we put in one, we can put in the other, and with two hatches instead of twelve we’ve cut out a lot of maintenance,” Hilarides concluded.
General Dynamics Electric Boat and Northrop Grumman [NOC] Shipbuilding Newport News (NGNN) both build the fast attack submarines in a unique teaming arrangement.
The multi-year contract allows Electric Boat and its teammate, Northrop Grumman Shipbuilding, to proceed with the construction of one ship per year in 2009 and 2010, and two ships per year from 2011 through 2013. The eighth ship to be procured under this contract is scheduled for delivery in 2019, according to a statemetn from General Dynamics.
In August, Northrop Grumman officials said the two companies began building prototypes of systems planned for the Block III submarines.
“Today Electric Boat and we have already started construction of prototypes for both payload tubes and the new bow sonar array which, after they are tested, we will incorporate into later ships of the Block III construction,” Tom Ward, program manager Virginia-class construction, told Defense Daily in an interview this past summer (Defense Daily, Aug. 6).
Under the Block III Capital Expenditure (CAPEX) plan to help the shipyards modernize, there is a provision worth approximately $170 million that shipbuilders could take advanatge of, a source told Defense Daily Monday.
The Block III announcement was expected, following the Navy’s notice to congress last month of its intent to award the contract to General Dynamics. The notification, sent by Navy Sec. Donald Winter noted the Navy would not issue the Block III contract prior to Dec. 19 for construction of the FY ’09 through FY ’13 submarines (Defense Daily, Nov. 24).
A number of changes are planned for the Block III submarines, including transitioning from 12 vertical launch tubes down to two payload tubes, similar to what the converted Ohio-class SSGNs have (Defense Daily, August 6).
The Block IIIs will also use the Multiple All-up Rounds Canister (MAC) designed to carry six Tomahawk cruise missiles.
The changes to the vertical launch tubes and plan to carry the MAC will provide commonality between the Virginia-class submarines and the SSGNs.
Block III will also introduce a new Large Aperture Bow array, replacing the sonar spherical array, which will cost less to build and install, Ward said (Defense Daily, Aug. 6).
For its part, NGNN made a substantial capital investment, on the order of $200 million, for the Block III boats. Among the investments will be improved covered facilities, process improvements, quality of life improvements for workers and productivity enhancements required to move toward building two submarines a year (Defense Daily, Aug. 6).
Newport News is anticipating increasing its workforce once the yard begins working on two submarines a year, company officials said back in July. That will also help NGNN should the Navy decide to build more Virginia-class boats than originally planned.
“The class was advertised at 30, but [the Navy] has been talking recently about continuing to build Virginia class to bridge over to the SSBN(X) program,” a company official said this past summer. “So, now they are talking [about] a 41-boat class.”
Earlier this year, the Navy began laying in the research and development plans for the follow on Block IV submarines, Capt. Dave Johnson, who was the Virginia-class program manager in the spring, told Defense Daily (Defense Daily, April 28).