DDG 51 Multiyear Procurement Contract Awarded
The Navy awarded two contracts for the DDG 51 fiscal years (FY) 2013-2017 multiyear procurement (MYP) for DDG 51 Arleigh Burke-class destroyers June 3.
General Dynamics Bath Iron Works (BIW) is being awarded a $2,843,385,450 fixed-price incentive firm target (FPIF) contract for the design and construction of four DDG 51 class ships, one in FY 2013 and one each in FY 2015-2017. This award also includes a contract option for a fifth ship.
Huntington Ingalls Industries (HII) is being awarded a $3,331,476,001 fixed-price-incentive firm target (FPIF) contract for the design and construction of five DDG 51 class ships, one each in FY 2013-2017.
These multiyear procurement awards are for a total of nine ships, with an option for a tenth ship. The Navy's objective is to procure the tenth ship as part of the planned FY 2013-2017 MYP. The Navy will work with Congress to resolve funding shortfalls resulting from sequestration reductions before contracting for the 10th ship.
"These contract awards represent great value to the taxpayer and will ensure our warfighters have the ships and systems they need to prevail in any situation," said Secretary of the Navy Ray Mabus. "By leveraging competition in the DDG 51 class shipbuilding program, these shipbuilders will continue their proud histories in delivering these highly capable ships to the fleet while meeting critical operational requirements for integrated air and missile defense capability."
A competitive allocation strategy used in the DDG 51 class shipbuilding program since 1996, known as profit related to offers, or PRO, uses FPIF contracts to ensure reasonable prices while maintaining the industrial base. Congressional approval for the use of MYP contracts facilitated program budget savings of more than $1.5 billion while enabling the shipbuilders and equipment manufacturers to more efficiently plan future workloads.
"I am proud of the success of the DDG 51 program and appreciate Congress' continued support and approval of the Navy's multiyear procurement request," said Mabus. "This award enables stability in our industrial base and ensures the Navy and the nation get the most efficient and affordable build plan for these destroyers."
The destroyers are being procured in a Flight IIA configuration, relying on a stable and mature infrastructure while increasing the ship's air and missile defense capabilities through spiral upgrades to the weapons and sensor suites.
The Navy plans to introduce the first DDG 51 Flight III on the second ship in FY 2016. Once Flight III requirements are approved, the new baseline will be implemented as an engineering change proposal. It is anticipated that the Flight III design will replace the Aegis AN/SPY-1D radar with the Air and Missile Defense Radar (AMDR) and provide for more electrical power and cooling capacity, providing the next generation of integrated air and missile defense and joint battle space awareness.