Navy Awards Contract for Construction of Two Carriers
(Source: US Navy; issued Jan 31, 2019)
An artist conception of the aircraft carrier USS Enterprise (CVN 80), the third nuclear-powered aircraft carrier of the Gerald R. Ford-class, ordered on Jan. 31 by the US Navy and which will be built at Newport News Shipbuilding. (HHI image)
WASHINGTON --- The Navy has awarded a contract for the construction of CVN 80 and CVN 81 to Huntington Ingalls Industries - Newport News Shipbuilding (HII-NNS). This contract award delivers significant savings to the government -- exceeding $4 billion when compared to the Navy's original cost estimates to procure these CVNs separately.
"Today marks a great team effort to drive out cost and maximize efficiency in government procurement," said Secretary of the Navy Richard V. Spencer. "Focusing on optimizing construction activities and material procurement, the team was able to achieve significant savings as compared to individual procurement contracts. One contract for construction of the two ships will enable the shipbuilder flexibility to best employ its skilled workforce to design once and build twice for unprecedented labor reductions while providing stability and opportunities for further efficiencies within the nuclear industrial base."
In addition to these savings, the contract includes ship integration costs of several modifications required to meet emerging threats including the F-35C Lightning II, Mk 38 gun system and MQ-25 Stingray Unmanned Aircraft System. These modifications increase the lethality of the Ford class and represent an additional $100 million in savings that is in addition to the $4 billion, since these new capabilities were not included in the original single-CVN Navy estimate. Plus, these new savings associated with new capabilities increases to $200 million if installed in the ship before delivery, in comparison to installing after ship delivery.
This fixed-price-incentive (firm target) contract limits the Navy's liability and incentivizes the shipyard's best performance. The contract guarantees a single technical baseline for both ships, which allows the shipyard to re-use engineering rollover products, minimize changes between the two ships and leverage economic order quantities for equipment and material procurement.
Enterprise (CVN 80) is the third ship of the Ford class and the numerical replacement for USS Eisenhower (CVN 69). CVN 81, not yet named, will be the fourth ship of the class and will be the numerical replacement for USS Carl Vinson (CVN 70). CVN 80 began advanced planning and initial long-lead-time material procurement in May 2016.
Pentagon Contract Announcement
(Source: US Department of Defense; issued Jan 31, 2019)
Huntington Ingalls Industries - Newport News Shipbuilding, Newport News, Virginia, is awarded the detail design and construction (DD&C) efforts for nuclear-powered aircraft carriers Enterprise (CVN 80) and unnamed CVN 81 under the following contract actions:
(1) A $14,917,738,145 fixed-price-incentive-firm target modification to previously awarded contract N00024-16-C-2116 for DD&C efforts for the future USS Enterprise (CVN 80) and unnamed CVN 81. The current contract for advance procurement funded efforts has been in place since 2016.
(2) A $263,096,868 cost-plus-fixed-fee modification to previously awarded contract N00024-16-C-2116 for associated research and development efforts.
(3) A $31,097,671 cost-plus-fixed-fee modification for additional level-of-effort in support of maintenance of the CVN 78 class specification, design efforts, feasibility and tradeoff studies, and scoping and estimating.
Work under this contract will be performed in Newport News, Virginia (62 percent); Sunnyvale, California (5 percent); Coatesville, Pennsylvania (3 percent); Wellsville, New York (1 percent); Cincinnati, Ohio (1 percent); Milwaukee, Wisconsin (1 percent); and various locations below one percent (27 percent), and is expected to be completed by February 2032.
Fiscal 2018 and 2019 shipbuilding and conversion (Navy) funding; and fiscal 2019 research, development, test and evaluation (Navy) funding in the amount of $889,830,279 will be obligated at time of award and will not expire at the end of the current fiscal year.
This contract was not competitively procured, in accordance with Federal Acquisition Regulation 6.302-1(a)(2)(iii) - only one responsible source and no other supplies or services will satisfy agency requirements.
The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity.
(EDITOR’S NOTE: These contracts for two additional Ford-class aircraft carriers are awarded despite continuing technical problems with the first ship, which critics argue should be fixed before the US Navy commits financially to building more.
For example, in his latest report also released Jan 31, the Pentagon director of operational Test & Evaluation cautions:
“Poor or unknown reliability of systems critical for flight operations including newly designed catapults, arresting gear, weapons elevators, and radar, could affect the ability of CVN 78 to generate sorties. Reliability of these critical subsystems poses the most significant risk to the CVN 78 IOT&E timeline.
Click here for his report (4 PDF pages) on the CVN 78 program.)
Huntington Ingalls Industries Awarded $15.2 Billion Block Contract for Two Ford-Class Aircraft Carriers
(Source: Huntington Ingalls Industries; issued Jan 31, 2019)
NEWPORT NEWS, Va. --- For the first time in more than three decades, Huntington Ingalls Industries’ Newport News Shipbuilding division was awarded a multi-ship contract from the U.S. Navy to build two aircraft carriers. The company announced today that it received a contract modification valued at $15.2 billion for the detail design and construction of the Gerald R. Ford-class aircraft carriers Enterprise (CVN 80) and CVN 81, which has not yet been named.
This historic contract award is a significant step toward the company’s designing and building the next-generation of aircraft carriers at the best value for the nation and is a defining moment in the history of the sole builder of nuclear-powered aircraft carriers.
The Navy’s decision to partner with HII to create the best acquisition approach will save more than $4 billion across the program.
“Today’s announcement is a triumphant step toward returning to a 12-ship aircraft carrier fleet and building the 355-ship Navy our nation needs,” said Jennifer Boykin, president of Newport Shipbuilding. “Most importantly for us, it provides stability into the year 2032 for our workforce and for our supplier businesses across the United States.”
The construction of Enterprise, which began in 2017, and CVN 81 will be completed at the company’s Newport News Shipbuilding division. The ships are scheduled to be delivered in 2028 and 2032, respectively.
Buying two aircraft carriers will stimulate Newport News’ aircraft carrier supplier base of more than 2,000 suppliers in 46 states, allowing businesses to phase in work more efficiently. These benefits will help accelerate production, enabling the company to build aircraft carriers every three to four years.
To support the contract, the company is making investment in facilities and will continue its digital transformation efforts.
“This contract award is something we should celebrate, and it is also something we should never take for granted,” Boykin said. “We have the responsibility to leverage the investments we are making in our workforce, the facility and in digital shipbuilding to become smarter, better, stronger. It is more important than ever that we execute efficiently and transform our business operations so that we leave a lasting legacy of our own.”
The strategy comes as a result of extensive collaboration with the Navy to reduce cost and drive efficiencies. The approach is not new, however. The Navy achieved substantial cost savings in 1980s when it used the procurement strategy to purchase the Nimitz-class aircraft carriers USS John C. Stennis (CVN 74) and USS Harry S. Truman (CVN 75) and USS Abraham Lincoln (CVN 72) and USS George Washington (CVN 73). The four ships were built by Newport News.
This contract modification comes after previous contract awards for the advance procurement and advance fabrication of Enterprise, starting in May 2016.
“History has its eyes on Newport News Shipbuilding, and today is a great reminder that we are all part of something much greater than ourselves,” Boykin said. “I could not be more proud of our shipbuilders and excited for our future.”
Huntington Ingalls Industries is America’s largest military shipbuilding company and a provider of professional services to partners in government and industry. HII’s Newport News and Ingalls shipbuilding divisions in Virginia and Mississippi have built more ships in more ship classes than any other U.S. naval shipbuilder. Headquartered in Newport News, Virginia, HII employs more than 40,000 people operating both domestically and internationally.