The multi-year deal to buy 15 nuclear submarines for the U.S. Navy that has been delayed by negotiations over ballooning costs of labor and material could be wrapped up by the end of the year, HII officials said during a Thursday earnings call.
The negotiations between the Navy and submarine builders HII Newport News Shipbuilding and General Dynamics Electric Boat are for the 10 Block VI Virginia-class attack boats and five Columbia-class nuclear ballistic missile submarines, Chris Kastner said during HII’s latest quarterly earnings call.
“The team’s working very hard to get that done before the end of the year,” Kastner said. “The Navy’s working on how that works with the shutdown and potential [continuing resolution] to make sure that we can get the ships awarded.”
Shipbuilding funding and the contract negotiation has continued during the government shutdown, according to Kastner.
In combination with the Reconciliation Act and the overall defense budget request, the Pentagon planned for $1.5 billion in advanced procurement for Fiscal Year 2024 for the first Block VI boat — the future Potomac SSN-814. In FY 2025, Congress appropriated $3.6 billion for Potomac, as well as $3.7 billion for advanced procurement for boats in fiscal years 2026 and 2027.
Like the Block V boats, the Block VIs will be the second set of Virginia-class attack submarines to feature the Virginia Payload Module (VPM), which will meet the Navy’s requirement for a large-scale land strike missile platform after the Ohio-class guided-missile submarines retire. The service estimates it needs 20 VPM boats to make up for the retired Ohio-class submarines.
The Columbia Build II program would buy the next five boomers starting with the third in the class, the future Groton (SSBN-828), for an estimated $10.54 billion, according to the Navy’s Fiscal Year 2026 budget submission. The class of 12 could cost an estimated $128 billion.
The pending deals for funding Potomac and Groton followed a complex funding scheme that set aside money not only for new boats via a continuing resolution that also funded an increase in worker salaries and added money to maintain the submarine supplier base.
In April, the Navy awarded Electric Boat and Newport News $18.5 billion in contracts for the last two Block V boats, the future Baltimore (SSN-212) and Atlanta (SSN-813), in addition to money to raise wages for workers.
“Having completed the negotiations for the significant award of two submarines earlier this year, our teams have pivoted to negotiations of Block VI and the next Columbia award and are working towards having agreements in place late this year,” Kastner said.
In addition to submarine work, Kastner said the delayed Ford-class carrier John F. Kennedy (CVN-79) would begin sea trials this year, and Ingalls Shipbuilding’s second Flight III Arleigh Burke guided-missile destroyer Ted Stevens (DDG-128) has completed builders’ trials. Stevens is slated to deliver to the fleet in 2026.
About the Author
