Huntington Ingalls Wins Aircraft Carrier Deals

aircraft carrier

By Reuters 2015-06-05 19:36:28

Huntington Ingalls Industries Inc won two contracts worth a combined $4.3 billion to complete design work and construction of the USS John F. Kennedy aircraft carrier on Friday. The Pentagon announced the news in its daily digest of major contracts.

The first contract, a fixed-price deal with an incentive fee, was worth $3.4 billion for design and construction work on the new warship, and runs through June 2022.

A second contract, a cost-plus contract with an incentive fee, was worth $941 million and is a modification of a previously awarded contract. Together the two deals will cover all remaining design and construction of the new ship, CVN 79.

Rear Admiral Thomas Moore, program executive officer for aircraft carriers, said the contract reflected three years of tough negotiations with the company to ensure the new carrier met a congressional cost cap of $11.5 billion.

"With a stable design, mature requirements and an improved build process, we will reduce construction hours by 18 percent, lower the cost to build the ship by almost $1 billion in real terms compared to CVN 78 and meet the cost cap," Moore said.

He said the Navy would continue to drive costs down with the next ship in the class, CVN 80.

Huntington Ingalls said the contracts would help provide stability for shipbuilders at its Newport News Shipbuilding unit, but also for thousands of suppliers around the country.

Huntington Ingalls received its first contract for the carrier in fiscal 2007 to start buying materials that take a long time to procure.

The first steel was cut in December 2010, with more than 450 of the ship's 1,100 structural units constructed since then that will be used to start erecting the ship's hull.

The ship's keel-laying ceremony is scheduled for August 22.

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