Bath Iron Works (BIW) and Northrop Grumman Ship Systems (NGSS) are being awarded fixed price incentive multiyear contracts worth a combined total of approximately $5 billion for construction of 10 DDG 51-class Aegis Destroyers.
BIW, a unit of General Dynamics (GD), is being awarded a $3,170,973,112 modification to contract for six ships that will be distributed between fiscal 2002-2005, one in fiscal 2002, one in fiscal 2003, two in fiscal 2004, and two in fiscal 2005. The addition of the multiyear ships increases the number of ships under that contract from one ship, DDG 102, to seven ships total. The work will be performed in Bath, Maine.
NGSS, formerly Ingalls Shipbuilding, Inc. is being awarded a $1,968,269,674 for four DDG 51-class ships, one in fiscal 2002, one in fiscal 2003, one in fiscal 2004, and one in fiscal 2005. Work will be performed in Pascagoula, Miss.
Two of the multiyear ships awarded to BIW in fiscal 2004 and fiscal 2005 are in accordance with the memorandum of understanding (MOU), "Concerning the Reallocation of LPD-17 And DDG-51 Ship Construction Workload," signed and announced by GD, NGSS and the Navy in June 2000. The MOU outlines the terms and conditions for transferring the construction of four LPD 17-class amphibious transport dock ships from BIW to NGSS owned-Ingalls and Avondale shipyards in exchange for construction of four additional DDG 51-class destroyers or equivalent workload at BIW.
Speaking about the award, Navy Secretary Gordon England said, "The award of the DDG 51 multiyear contract today is not only a significant milestone for one of the Navy's most successful acquisition programs, but also the cornerstone for the completion of the DDG 51 and LPD 17 workload exchange agreement. The DDG multiyear contract and the workload exchange agreement will save the taxpayers more than $500M through the life of these two programs and provide for increased workload stability at Bath, Ingalls and Avondale shipyards. This award is a testament to the teamwork, professionalism and value created by our industry and government team. The agreement is also a testament to our partnership with Congress, as a number of key members have been instrumental in shaping and approving the swap and multiyear agreements."