The Department of Defense is asking Congress to authorize a potential $17.7B block-buy contract for two Columbia-class ballistic missile submarines, Defense News reported Wednesday.
The U.S. Navy and General Dynamics (NYSE: GD) have been in talks over the terms of a two-ship procurement and the proposed block buy, if approved, would provide the company a steady flow of shipyard work as the industrial base faces the economic impact of the coronavirus pandemic.
The Navy wants to build 12 submarines under the Columbia-class program to replace its aging fleet of 14 Ohio-class submarines. The cost of the first Columbia-class vessel is estimated at $14B, while the second is projected at $9.3B, according to the president’s budget.
Capt. Danny Hernandez, a spokesman for the office of the assistant secretary of the Navy for research, development and acquisition, said the Columbia-class submarine program is on track and the service considers it as its top acquisition priority.
"Per the Navy’s Budget Submission, the Navy plans to award a contract modification for construction of the first two Columbia-Class ships as a priced option in FY20,” Hernandez said. "Formal option exercise and SSBN 826 construction start are planned for October 2020, following required Congressional authorizations and appropriation of funds.”
The move seeks to allow the Navy to block buy SSBN 826 and SSBN 827 Columbia-class submarines to provide “industrial base stability, production efficiencies, and cost savings when compared to an annual procurement with options cost estimate,” according to the service’s legislative proposal obtained by the publication.