The US Navy has awarded General Dynamics Electric Boat two contracts worth a combined $1.2 billion for materials required to construct Virginia-class nuclear-powered attack submarines.
In a contract modification, the firm received a maximum budget of $878 million for additional materials needed to construct the SSN 812 and SSN 813 Block V submarines.
Work will be performed in Virginia, California, and various other US locations through September 2033.
The navy’s shipbuilding and conversion funds, amounting to $658.5 million from the fiscal year 2024 budget, will be obligated to the contract at the time of award.
In addition, the Virginia-based defense contractor received a second contract, not to exceed $349.8 million, for long lead-time materials needed for the planned Virginia-class Block VI submarines.
This recent deal builds upon a $1.3-billion contract from August.
Work under this second contract is expected to be completed by September 2035, with operations taking place in California, Minnesota, Pennsylvania, and several other states across the US.
Program in Crisis
These two contracts also support the service’s commitment to maintaining a healthy industrial base by ensuring suppliers remain operational during ongoing contract negotiations, given the challenges in labor and costs.
Earlier this year, it was reported that the US Navy’s largest projects, including the Virginia-class submarines, have been falling behind on their deadlines while going over budget.
The Navy attributed these delays to shipyard workforce shortages, supply chain disruptions, and investor hesitance.
This affects the naval forces’ submarine capabilities against potential threats from China and the country’s commitments to its AUKUS security partnership with Australia and the UK, which involves selling up to five Virginia-class submarines to Canberra.
Last month, House Representative Ken Calvert stated that “the Navy is struggling to construct just 1.3 Virginia-class submarines per year” out of the two Virginia-class submarines expected annually.
“I hold both the Navy and the shipbuilders responsible. However, the Navy is the customer and the program manager. It is your responsibility to conduct oversight and to come up with innovative solutions to get these programs back on track and stop the outrageous cost increases. It is also your responsibility to communicate with Congress,” he added.
