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September 28, 2018

In $9B award, BIW to build four DDG 51 destroyers, Huntington Ingalls to build six

Courtesy / Bath Iron Works Bath Iron Works christened the Navy guided-missile destroyer, Thomas Hudner, on April 1, 2017, in a public ceremony at the Bath shipyard. The Bath shipyard, which is owned by General Dynamics Corp., was awarded Thursday a contract valued at $3.9 billion to build four Arleigh Burke-class destroyers for the U.S. Navy.

The U.S. Navy awarded Bath Iron Works a contract valued at $3.9 billion for the construction of four Arleigh Burke-class destroyers.

It also awarded Huntington Ingalls Industries in Pascagoula, Miss., a six-destroyer contract valued at $5.1 billion.

BIW, a business unit of General Dynamics (NYSE: GD), is the lead shipyard in the Navy’s Arleigh Burke DDG-51 destroyer program.

Both shipyards were awarded fixed-price-incentive firm target contracts, according to Navy press release.  BIW’s four-ship contract is for fiscal years 2019-2022, while Ingalls’ six-ship contract is for fiscal years 2018-22, the Navy stated.

“The Navy saved $700 million for these 10 ships by using multiyear procurement contracts rather than a single year contracting approach,” James F. Geurts, assistant secretary of the Navy for research, development and acquisition, said in the release. “We also have options for an additional five DDG-51s to enable us to continue to accelerate delivery of the outstanding DDG-51 Flight III capabilities to our naval force. We executed this competition on a quick timeline that reflects the urgency in which the Navy and our industry partners are operating to ensure we meet the demands of the National Defense Strategy."

Four DDG 51 destroyers are now in production at the Bath shipyard: Daniel Inouye (DDG 118), Carl M. Levin (DDG 120), John Basilone (DDG 122) and Harvey C. Barnum (DDG 124) with two more in backlog, Louis H. Wilson Jr. (DDG 126) and Patrick Gallagher (DDG 127). BIW also is building the third Zumwalt-class destroyer, Lyndon B. Johnson (DDG-1002).

“We are pleased with the opportunity for Bath Iron Works to continue our participation in the DDG 51 Program and to deliver much needed capability to our US. Navy customer,” said BIW President Dirk Lesko.

Lesko said Maine’s congressional delegation was instrumental in supporting passage of legislation that enabled this contract award.

The contract includes potential options for additional ships, including one that will be awarded in fiscal year 2019, U.S. Sens. Susan Collins, R-Maine, and Angus King, I-Maine, and U.S. Reps. Chellie Pingree, D Maine District 1, and Bruce Poliquin, R-Maine District 2, said in a joint news release.

Collins is a senior member of the Senate Defense Appropriations Subcommittee, King is a member of the Senate Armed Services Committee and Pingree is a member of the House Appropriations Committee.

Earlier this month, Collins and King both advocated for the passage of the Fiscal Year 2019 Defense Appropriations bill, which included funding for three Arleigh Burke-class destroyers in fiscal year 2019, while also including $250 million in advanced procurement funding for an additional destroyer in fiscal year 2020.

The legislation passed the Senate and House and is headed to President Trump’s desk to be signed into law.

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