The Navy awarded General Dynamics’ [GD] submarine construction unit a contract exceeding $17.6 billion on Monday for 10 Virginia-class (SSN-774) attack subs.

The Virginia-class attack submarine USS North Carolina (SSN-777). Photo: U.S. Navy
The Virginia-class attack submarine USS North Carolina (SSN-777). Photo: U.S. Navy

The contract is the largest in dollars the Navy has ever awarded for shipbuilding, and takes place over a five-year period beginning this year. Additional options for repair and other work under the Block IV phase of the program could push the total value for General Dynamics Electric Boat, based in Groton, Conn. to $17.8 billion.

It also keeps the Navy on its desired pace of building two submarines annually to optimize the efficiencies of the production and get the boats to the fleet as soon as possible.

“The Virginia-class program is a model of acquisition excellence,” said Rear Adm. David Johnson, the program executive officer for submarines at Naval Sea Systems Command. “The Block IV award is the largest shipbuilding contract in U.S. Navy history in terms of total dollar value and builds upon the Virginia-class program’s successful Navy and industry relationship.”

Electric Boat will build the submarines with subcontractor Huntington Ingalls Industries [HII], which is based in Newport News, Va.

The Navy estimates that the multi-year contract will save the Navy about $2 billion–an amount that adds up to about the cost of one of the Virginia subs, Capt. David Goggins, the program manager for the class, said.

The Block IV version of the subs continues the lifecycle cost and cost reduction efforts introduced on the Block IIIs. The Block IV boats will increase the life from 14 to 15 full deployments, NAVSEA said.

“With the decrease in cost and the increase in capability, we are essentially getting more for less,” Johnson said.

Electric Boat said the first Block IV sub will begin Thursday, with the final of the 10 to be delivered in 2023. Electric Boat President Jeffrey Geiger said the five-year deal will help keep the industrial base stable and allow the Navy and the company to building on production efficiencies.