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.