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The US Navy is expected to award a two-aircraft carrier contract to Newport News Shipbuilding, after the US Department of Defense formally notified the Congress on December 31st.
This would note the first dual-aircraft carrier contract since the 1980s.
The Navy has been priming to undertake the move since March 2018, claiming that it could potentially save as much as $2.5 billion in the deal, recently stating that the deal could save even more than that. Newport News Shipbuilding was also open and willing to conclude the deal, but the Pentagon took until December 31st to present the letter to the lawmakers.
The Pentagon sent a certification letter to Congress that outlines the contracting strategy and how much time and money it would allow the Navy to save on hulls the Enterprise (CVN-80) and the yet unnamed CVN-81. An unnamed Congress staffer was cited by USNI News claiming that the dual-carrier contract could save about $4 billion.
The Navy could potentially award the contract by the end of January 2019.
USNI News cited a Navy spokesman, who claimed that “the Navy has reached a price agreement with Huntington Ingalls Industries’ Newport News Shipbuilding for a two-carrier buy of CVN-80 and 81. Further information will be available upon contract award.”
Under the National Defense Authorization Act of Fiscal Year 2019, Congress agreed that the Navy may enter into the CVN-80 and 81 contracts, as long as the US Secretary of Defense certifies the award of the contract at least 30 days in advance that “the use of such a contract will result in significant savings compared to the total anticipated costs of carrying out the program through annual contracts,” in addition to there being enough funding in the budget, to allow for the purchase of both hulls, that the design is stable and there is no excessive technical risk, and that the contract will be fixed-price and not endless get more expensive similarly to the F-35 fighter jet.
Sen. Tim Kaine (D-Va.), a Senate Armed Services Committee member and a proponent of the two-carrier buy from the Virginia-based Newport News Shipbuilding yard, said in a Dec. 31 statement that “I’m thrilled the Navy has decided to pursue a block buy for aircraft carriers, something I’ve been advocating to save billions in taxpayer dollars and offer more certainty to the Hampton Roads defense community. This smart move will save taxpayer dollars and help ensure the shipyards can maintain a skilled workforce to get the job done. Newport News builds the finest carriers in the world, and I know they are ready to handle this increase in work as we make progress toward the Navy’s goal of a 355-ship fleet.”
Newport News Shipbuilding has not yet released a statement on the potential contract award. But, in March, Mark Petters, president of Huntington Ingalls Shipbuilding, said that “we believe the most effective way to reduce cost of aircraft carriers is to take a multi-ship purchase approach and build them every three to four years. Buying two ships at once stabilizes the Newport News Shipbuilding workforce and their national supplier base, allows us to buy materials in quantity, and phase work more efficiently.”
