US Navy Places Largest Order in History: $77B for Submarines
On Wednesday, the Pentagon awarded a combined $77 billion to U.S. submarine builders General Dynamics Electric Boat and Huntington Ingalls Industries for the construction of 14 new hulls, a massive and long-awaited infusion of cash for the submarine industrial base. The award is the largest newbuild order of any kind ever placed, equal to roughly three times the annual order volume of the world's largest shipbuilder, CSSC.
The award covers five Columbia-class nuclear ballistic missile subs and nine Block VI Virginia-class attack subs. At $10 billion each, the Columbia-class subs are a once-in-a-generation investment for the Navy, and are a cannot-fail requirement for the replacement of the aging Ohio-class SSBNs. The Navy now has seven Columbias under contract with Electric Boat, including two under construction.
The order for nine Virginia-class subs gives HII and Electric Boat visibility into the attack-sub orderbook through FY2029. This satisfies a longstanding concern for shipbuilders - the question of when orders will be placed, and whether there could be delays in finalizing them. It also sends a signal to potential shipyard employees that the government is committed to the program and that today's new jobs will last for years to come - an essential factor, as labor shortages are a key bottleneck for all U.S. naval shipbuilding programs.
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While there are two yards building the mission-critical submarines, they work together on each vessel by completing different component sections. For Columbia, final assembly happens at Electric Boat.
"By securing the continuous production of both the Columbia and Virginia classes, we ensure we will continue to deliver the world’s most lethal, survivable and resilient combat platform to our global Combatant Commanders, while providing long-term stability to our shipbuilding industrial base," said Vice Adm. Robert Gaucher, the director of Submarine Programs. "This historic investment underscores the Department's continued commitment to undersea superiority and the recapitalization of our nuclear triad."
