Navy awards dual carrier contract in move it says will save billions
By CAITLIN DOORNBOS | STARS AND STRIPES Published: February 1, 2019
The Navy has awarded a $14.9 billion construction contract for a pair of Gerald R. Ford-class aircraft carriers, according a Defense Department contract announcement.
The nuclear-powered CVN 80 and CVN 81 will be designed and built by Huntington Ingalls Industries' Newport News Shipbuilding, according to the announcement issued Thursday. Most of the work will be done in Newport News, Va., and is expected to be completed by February 2034.
The total price of the two ships is estimated to reach about $24 billion once government-furnished systems such as electromagnetic aircraft launch systems and advanced arresting gear are added, according to a USNI News report Thursday.
The contract was designed to offer "significant savings to the government," the Navy said in a statement Thursday. By committing to the construction of two carriers in a single contract, the service said it will pay $4 billion less than originally estimated to procure the ships individually.
The announcement comes following criticism over mounting costs in procuring and deploying the USS Gerald R. Ford, the first carrier of its class, which was commissioned in 2017 but is still undergoing fixes.
The Navy buys most ships in block-buy contracts, but larger vessels are typically bought individually because of their higher costs.
That concept could be changing, as some Navy officials have considered using a similar two-ship tactic to buy the next amphibious assault ships, according to the USNI News report.
Navy Secretary Richard Spencer said in the service's statement that the contract team achieved the savings by "focusing on optimizing construction activities and material procurement."
"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," he said.
Also included in the contract are costs for modifications required to integrate Mk 38 gun systems, F-35C Lightning II stealth fighters and MQ-25 Stingray Unmanned Aircraft Systems, according to the statement.
"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," the Navy said in the statement.
CVN 80 will replace the current USS Dwight D. Eisenhower, which has been in service since 1977, according to the Navy. CVN 81 will replace the 1982-commissioned USS Carl Vinson. They will be the third and fourth members of the Ford class of aircraft carriers, behind the Ford and upcoming USS John F. Kennedy.
Ford-class ships include larger flight decks, improved weapons and material-handling and a new propulsion plant design "that requires fewer personnel to operate and maintain," the Navy said in November 2009.
CVN 80 will be the ninth U.S. vessel to bear the USS Enterprise name. The last Enterprise – featured in the 1986 blockbuster film "Top Gun" – was launched in 1960 and decommissioned Feb. 3, 2017.
CVN 81's name has not yet been selected.
The Navy first announced its intention to pursue a two-in-one contract Dec. 31, but Congress needed 30 days to review the proposal before it could be awarded.
In a New Year’s Eve statement, Sen. Tim Kaine, D-Va., called the initiative a smart move.
“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," Kaine said in the statement.
The contract's anticipated savings helps keep procurement costs below Congress' imposed $12.9-billion-per-carrier price cap.
The USS Gerald R. Ford's procurement costs drew criticism in May when it breached that limit by $120 million to fix damaged propulsion components and deficient advanced munitions elevators.
A report by the Pentagon director of operational testing expressed concern for the Ford’s ability to meet its mission.
“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,” according to the report executive summary posted on the Defense Department’s Office of the Director, Operational Test and Evaluation website.
The report concluded that the Ford would probably not achieve the required level of sorties – aircraft launched and recovered – due to “unrealistic assumptions” about factors affecting its operations.
“These assumptions ignore the effects of weather, aircraft emergencies, ship maneuvers, and current air wing composition on flight operations,” according to the executive summary.
Fixes to the Ford are scheduled to be completed by July, according to a Jan. 16 Navy statement.