The Office of the Secretary of Defense approved an agreement in December between the Navy and Huntington Ingalls Industries [HII] to buy two
Gerald R. Ford-class aircraft carriers at once, CVN-80 and 81.
CVN-80 is the future USS Enterprise while CVN-81 is not yet named. They will be the third and fourth Ford-class carriers.
The Navy expects savings of upward of $4 billion total, significantly higher than previous estimates. These savings accrue compared to buying the two vessels separately.
Previously, Assistant Secretary of the Navy for Research, Development and Acquisition (ASN-RDA) James Geurts told congressional panels the service expects savings over $2.5 billion (Defense Daily, Nov. 27).
Separately, in April, Jennifer Boykin, president of HII’s Newport News Shipbuilding (NNS) division, told reporters the company sees up to $1.6 billion in savings in commercially furnished equipment alone (Defense Daily, April 10)..
In a statement on Jan. 2, Rep. Joe Courtney (D-Conn.), incoming chairman of the House Armed Services Seapower Subcommittee, confirmed this agreement “to build two future Ford-class carriers as a package will save nearly $4 billion.”
The Navy sent a certification of the deal to Congress on Dec. 31, in accordance with provisions in the FY 2018 National Defense Authorization Act (NDAA). The NDAA authorized the Navy to procure CVN-81 as an addition to the contract covering CVN-80 but the Department had to first send the congressional defense committees as certification the deal results in ‘significant savings” compared to expected annual costs (Defense Daily, July 24).
The NDAA prevents the Navy from awarding a new contract for the program for 30 days after sending Congress the certification.
Capt. Danny Hernandez, a Navy spokesman, confirmed “the Navy has reached a price agreement with Huntington Ingalls Industries – Newport News Shipbuilding (HII-NNS) for a two-CVN buy of CVN 80/81. Further information will be available upon contract award.”
In November, Geurts warned the level of savings would “start to erode” if the deal was not approved by around the new year, since CVN-80 is already on contract and HII has already started construction on it (Defense Daily, Nov. 27).
HII spokesperson Beci Brenton said in a statement Wednesday HII was glad to reach an agreement with the Navy.
Brenton said the deal is “a significant step toward building these ships more affordably. Although there is more work to be done it is important to note that the multi-ship purchase of aircraft carriers helps stabilize the Newport News Shipbuilding workforce, enables the purchase of material in quantity, and permits a fragile supplier base of more than 2,000 in 46 states to phase work more efficiently.”
Similarly, members of Congress welcomed the decision.
Sen. Tim Kaine (D-Va.), a member of the Senate Armed Services Committee, said he was “thrilled the Navy has decided to pursue a block buy for aircraft carriers, something I’ve been advocating to save billions in taxpayer dollars and offer more certainty to the Hampton Roads defense community.”