US Awards General Dynamics, Northrop Grumman $14-Billion Submarine Deal

US Awards General Dynamics, Northrop Grumman $14-Billion Submarine Deal (NSI News Source Info) WASHINGTON - December 23, 2008: The U.S. Navy awarded a $14 billion contract to General Dynamics Corp and Northrop Grumman Corp for eight Virginia-class submarines, the Pentagon announced on Monday. The multiyear contract will mean the production of one submarine in 2009, one in 2010 and two submarines in each of the following three years, the government said. The production schedule and design changes shaved 20 percent off the acquisition costs, and give contractors more stability in their business outlooks, the Navy said. General Dynamics, based in Falls Church, Virginia, is the lead contractor on the nuclear-powered submarines, but construction is shared equally with Northrop, which is based in Los Angeles. "It brings stability to the submarine program, to our work force and to the shipbuilding supplier industrial base for the next decade," Matt Mulherin, general manager of Northrop's shipyard in Newport News, Virginia, said in a statement. General Dynamics does its submarine work at its Electric Boat shipyard in Groton, Connecticut The vessels are designed for a range of missions such as anti-submarine and surface ship warfare, delivering special operation forces, intelligence and surveillance. "By providing money over a period of several years, it becomes easier for the contractor to plan ahead and cut the cost of each vessel," said Loren Thompson, defense analyst with the Lexington Institute in Virginia. He said the multiyear contract would help reassure shipyard workers in New England and Virginia "that their jobs will exist five years from today." Ronald O'Rourke, analyst with the nonpartisan Congressional Research Service, said the Navy already had 10 of the new attack submarines in service or under construction, and the new orders would bring the total to 18. Overall, the Navy has said it plans to build 30 of the Virginia-class submarines.