General Dynamics gets $4 billion underwater boost

General Dynamics gets $4 billion underwater boost

General Dynamics got the Christmas bonus many others in the defense sector missed. The defense firm’s shipbuilding sector received three contracts worth $4.6 billion over the holiday season to develop the next ballistic missile submarine and continue building Virginia-class submarines.

The financial boost comes at a time that the rest of the defense sector is bracing for cuts. General Dynamics will join the rest of the defense industry as its massive firm reaches out beyond submarines, but this should serve as a cushion to absorb those blows.

The Navy awarded General Dynamics’ Electric Boat Division a $1.85 billion contract for the development of the Ohio-Class Replacement Program. Navy leaders hope to build 12 new ballistic missile submarines out of the program to replace the 14 existing Ohio-class submarines.

The $1.85 billion will obviously not cover the entire development, but it’s a boost for a program that Navy officials have listed as its top priority.

Navy acquisition officials worked a series of incentives into the cost-plus-fixed-fee contract. They were included by Naval Sea Systems Command to motivate General Dynamics in a sector they don’t face much competition.

“The Navy established a structured series of incentives to motivate General Dynamics Electric Boat and the government to further innovation to lower non-recurring engineering costs, construction costs, and operation and support costs,” said Capt. William Brougham, NAVSEA’s Ohio Replacement program manager, in a statement.

Navy officials do not expect next generation Ohio-class submarines to conduct their first mission until 2031. Long lead modernization programs like the Ohio-Class Replacement have left some analysts worried they could be delayed by the coming sequestration cuts. General Dynamics executives said the contract shows the level of the Navy’s commitment.

“These awards provide the stability to the submarine industrial base that will allow us to achieve even greater cost reduction through improved efficiencies in support of the Navy’s submarine force-level requirements,” said  Kevin J. Poitras, General Dynamics’ Electric Boat president, in a statement.

The largest of the three contracts General Dynamics received was a $2.5 billion contract to build the 17th and 18th Virginia-class submarines for the Navy. General Dynamics’ Electric Boat works with Newport News Shipbuilding in construction of the South Dakota (SSN-790) and Delaware (SSN-791) submarines.

The last of three contracts is one for $308 million to purchase long lead-time materials for the fourth production block of the Virginia class submarine.

Pentagon officials pushed to get these contracts cleared ahead of the fiscal cliff deadline of Jan. 2. Doing so protected the contracts from the possible sequestration cuts. The decision on those cuts was punted to March by Congress, which many defense analysts fear make them more realistic since they will be roped into the debt ceiling debates.

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the navy is going to follow the highly successful LCS model for their next boomer design

–it’ll have a single GIANT gas turbine engine so that it can do 50 knots underwater (that’s called “ludicrous speed” to you landlubbers)
–it”ll be constructed of aluminum so that it’s lightweight
–it’ll have a huge open space for modules: sonar module, periscope module, whale detector module, humanitarian assistance module, star in the next hookie hollywood movie module etc
–it’ll be armed with a singe 57 mm gun while it’s weapons are being “developed“
–it’ll be so highly automated that it takes voice commands
–it’ll have a crew of 20 and be commanded by a vice-admiral
–and we’ll build 55 of them, but all of different designs

The Navy found a winner with General Dynamics and submarine construction. They’ve been on or under budget on every Virginia so far and every copy gets a couple million cheaper. Hope they can repeat success on the next design.


Virgina class has been very successful. Just make a missle section for the ship for the ballistic missle class.

Under budget and early. The Minnesota is sitting at the dock getting ready for sea trials. The John Warner is in the hanger right next to the Delaware. They are rolling.

Not sure if the VA hull is big enough for what the navy wants SSBN-X to be (as usual, the Navy bloats the specs). At its heart it should hide well, defend itself well and carry a significant nuclear punch.

In practice it’ll probably mount standard Trident III but may have to be future proof for Trident IV if it comes, and in an era of projected budget cuts there may be less SSBN-X than Ohios. Can VA design without serious modification meet those challenges?

We will plan for it to mount some kind of missile weapon, and then…never field the missile!


“Navy acquisition officials worked a series of incentives into the cost-plus-fixed-fee contract. They were included by Naval Sea Systems Command to motivate General Dynamics in a sector they don’t face much competition.”

Dfens, where are you? Surely, you cannot resist this delicious bait ball!

And that is the kind of success that should be rewarded! I fully believe that US companies, managers and workers can do exactly this kind of quality work if the government applies some rewards for it.

And this does not count Sequestration coming into effect may take longer to field a new sub than this writer thinks.

Navy acquisition officials worked a series of incentives into the cost-plus-fixed-fee contract.
Cost plus? Thats a relic of WW2 and should’ve been stopped decades ago. But then again, if you’re a lover of corporate welfare for profitable companies then you gotta love cost-plus…

Yet these boats have been cheaper and cheaper and delivered ahead of schedule as others have also pointed out.

The problem is the Politicans, the navy brass and what is expected. If the LCS, DDG-1K and others had been handled as well we wouldnt be so bad off.

Cost plus can be beneficial to the gov, depending on how the “plus” portion of the equation is implemented. Typically, the plus portion (which is the only portion that the company profits on) is based on performance parameters set up by the customer (government). With award fees based on whatever performance parameters the customer thinks are most important (cost, schedule, design performance) the financial incentive is for the manufacturer to produce a quality product, under budget, before schedule.

Cost plus is not a relic of WW2, and is not going away. How else are you going to entice a corporation to invest billions of their own money into a program that you may decide to cancel as soon as the next administration comes in?

Mostly because much of the R&D had been paid for on the back of the Seawolf, and as much recap and economizing as possible was done at its expense.

I’m not sure if its a reliable case study for the rest of navy procurement.

Acknowledging your sarcastic intent, but still: Not aluminum. Too weak, and too dangerous (Al can catch fire, and putting H-2–0 on it releases hydrogen — bang.)
Light weight is not an asset for a sub, it has to sink. Speed is not much of an asset either, it makes too much noise. Most subs are already rather speedy under water (classified of course). They already have nuclear fueled steam turbines (steam being a gas). They don’t have any mounted guns, and don’t need them. Torpedoes and Tomahawk missiles are plenty of firepower.


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