Sub Deal Tops $30 Billion in April Contracts

Sub Deal Tops $30 Billion in April Contracts

General Dynamics Corp. received the U.S. Defense Department’s biggest contract last month, a behemoth of a deal valued at almost $18 billion for more nuclear attack submarines.

The Falls Church, Virginia-based company’s Electric Boat unit will build 10 Virginia-class submarines during the five-year period through fiscal 2018, according to the Pentagon’s April 28 announcement of the multi-year agreement. Most of the work will take place in Newport News, Virginia; Groton, Connecticut; and Quonset Point, Rhode Island.

Rear Adm. David Johnson, who manages the service’s submarine acquisition programs, described it as “the largest shipbuilding contract in U.S. Navy history.”


The deal topped a list of more than 240 awards announced in April, with a combined potential value of $30.4 billion, according to a Military​.com analysis of the Pentagon’s daily contract announcements.

While the monthly total amounts to a 13-percent decline from the previous month, it reflects a 60-percent increase from the same month a year ago. The figures don’t reflect what is actually spent, or obligated, because many deals are only partially funded at first.

Overall, defense contracting is sliding amid automatic budget cuts known as sequestration. Since the Oct. 1 start of the government’s fiscal year through April, the Pentagon’s outlays in procurement and research and development accounts totaled $103 billion — a 3-percent decrease from the same period a year earlier, according to the monthly financial assessment prepared by the Treasury Department’s Financial Management Service.

A group of companies including General Dynamics and Harris Corp. won the second-largest defense contract last month, a potentially $1 billion deal with the Army to supply troops with digital radios, according to the April 9 announcement.

Another group of firms including Leidos Holdings Inc., which was spun off last year from the government services contractor SAIC Inc., won the third-largest military contract in April, an agreement worth as much as $950 million with the Air Force to oversee the construction of military family housing, according to the April 15 announcement.

Under these kinds of arrangements, known as multiple-award contracts, companies win seats on the contract, then compete against each other for individual orders.

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Our subs are the anvil and our carrier battle groups (i.e. air wings and surface strike groups) are the hammer :-)

These sorts of info-tainment “articles” are essentially just press releases devoid of substantive analysis or critical scrutiny.

Has the unit procurement cost of Virginia class subs gone up or down under this contract? Net of government-furnished equipment., or not? Go shout at the wind. Doing so will be more usetul and informative than the article itself.

“A group of companies including General Dynamics and Harris Corp. won the second-largest defense contract last month, a potentially $1 billion deal with the Army to supply troops with digital radios”

Not a single mention of the long history of previous disasters in Army radio contracting, nor any thought given to what might be likely to go wrong with this latest arrangement.

Definitely could have done some editorializing.

The cist has gone down, both because of continuing efficiencies realzed from a mature build process, and the improvements in the block III design which make the build process less expensive and more efficient.

Speaking of Leidos:
http://​www​.defenseindustrydaily​.com/​u​s​-​s​o​c​o​m​s​-​ccm

Looks like new fast boats.

You’re missing the point of the article. The message is that the US is maintaining the capability to build submarines AND more importantly maintaining the prime contractor and all major subcontractors and their workforce. With the decrease in defense spending the largest defense contractor and it’s supporting businesses across the US will remain employed. THAT is the message.

“Rear Adm. David Johnson, who manages the service’s submarine acquisition programs, described it as “the largest shipbuilding contract in U.S. Navy history.”.….…“10 Virginia-class submarines during the five-year period through fiscal 2018″ .….…. .this guy’s an ADM?

DBF Vet…if you add the workforce of EB-Groton, EB-Quonset Pt. & that portion of what was NPNSB that were constructing the 688 & 726 class boats compared to today, you’d be lucky to hit 25%! THAT is the message. As far as “subcontractors” 3rd tier ones are GONE!!! In 1988 there were 25K workers just at EB-Groton!

I assumed that he’s referring to the dollar amount rather than the quantity of ships.

Mien Furher, we need more U-Boats.…. China is expanding its fleet. Japan wants to build aircraft carriers. Vietnam wants a fleet. Russia wants to try their hands at it again.….…It is going to be a crowed ocean again.…

LOL high tech right there.….not

Talosian: OK lets try it your way: 30 billion in contracts that will buy 10 Va class over 5 years is “the largest shipbuilding contract in U.S. Navy history.”, not even for the Submarine Service!!! …the ORP is greater in $$ amount: $48 billion, (projected, yeah right) & # of boats 12 vs 10. I think “torque wrench” above nails it. I love the line “Most of the work will take place in Newport News, Virginia; Groton, Connecticut; and Quonset Point, Rhode Island” where else have we done submarine construction in the last 35 years???? This RADM isn’t the sharpest knife in the drawer.…..

Isn’t Japan our ally, Chris?

No, actually he is pretty sharp. He as been intimately involved withthe VA class program for almost a decade (back when he was CDR Johnson).

Since ORP isn’t actually building, I am not sure that it is a valid counterpoint.

But I think he really meant ” in recent history”. In then-year dollars, I bet the LA and Ohio contracts were bigger…

Note that he was probably being literal about “contract” rather than program. They may not have put 10 boats on one contract for a long, inflationary, time.

I’m well was, USAF…But I adore those sneaky SUBS.

KC, yes at this time they are.….. The point is, all the Asian countries are or at least want to increase their naval forces… All are interested in the oil reserves in the China Sea… All are claiming same.… And it includes countries like New Zealand and Australia. Now include the likes of Pakistan and India, as well as South and North Korea. And the chances for military confrontation, especially accidental increases… None will come out on top.… Diplomatic solution is the only answer. Instead od expending money on an arms race, they should combine their technology and funding to mutually develop the oil fields. However, the historical animosities and mistrusts between those countries, will preclude logic and commonsense. And so Mein Furher, we will react by building more U-Boats. And the oceans will become crowded.….Remember, “We won’t fire one, unless they fire one.… “Fire One” accidents and miscommunications.

“they should combine their technology and funding to mutually develop the oil fields”

Which will lead to an arms race of oil well depletion as each seeks to maximize a finite resource for their own gain. The only people who win are the firms who do the actual drilling.

Nice “Bedford Incident” reference.

Thanks William. That’s the point I intended to make in my apparently unprecise response above.

Perhaps, but at least you are buying time foe technology to develop alternative energy.…. No matter what, because of all the convoluted treaties and military agreements. The U.S. will be drawn into military action.…… Mankind marches on.….

Thanks, now I might have to come up with one from, “On the Beach”. But it looks like in this situation, Australia won’t be the last country standing.

William…I got the original point, got through Calculus III. Torque wrench has it nailed. These “off the cuff” statements are poorly written, & when TECHNICALLY analyzed, fall apart…just admit, they RADM should have said it differently. He was “over-enthusiastic” about the contract award, which will no doubt have a 10–15% cost over-run, and the Navy STILL adhere’s to this assine modular construction methodology between all three facilities.…get rid of that stupidity & you would save millions.….but then the Navy is facing NO cuts in the next 5 years, so just continue on spending $$ why not??, be happy, until that thing called “Murphy’s Law” smacks you in the face.….…

Chris: I think 4 the next 20 years the US can count on the ROK, Japan, Taiwan, NZ & Oz to be our allies to the “end” The PI, VN, Singapore, Malaysia.….yeah maybe, but I wouldn’t count on them when push comes to shove.….…NORK…Ha…leave them to the ROK’s + the 2nd I.D. & USAF.….& as far as the much vaunted Chinese, well in ’79 the VN mauled them pretty bad, & still kept the Chinese backed Khmer Rouge out of Cambodia 2 this day. A small favor Chris, when u post drop the Mein Furher part, some people might find that offensive. When I was stationed in W. Germany that kinda stuff was illegal to even post.….….peace

Hey Blight:
I think that would be a great idea that would lift the whole region out of poverty, but then the VN don’t like the Chinese, The Malaysians (being the largest Islamic nation) aren’t trusted by Chinese, the Chinese as Trump (no fan of) say’s “cheat, steal & infringe on copyrights” on every contract they can. So while a noble gesture, I just don’t see it happening.…..peace

KC you know me under “895” , it is only used as a reference to Dr. Strangelove.….. And my friend it is getting really Strange in more ways than one.

What is it you don’t agree with Colonel??

Don’t forget O’Toole’s corollary to Murphy’s Law: “Murphy was an optimist!!”

How much we borrowed from China to built this?

We keep buying Chinese products so they can afford to build their war-machines, then we have to reciprocate by spending more. Maybe we just need to learn to buy American and keep our money at home.

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