AN UPDATE ON U.S. NAVY SHIP AND EQUIPMENT PROCUREMENT
By Dr. James R. McCaul, President
IMA Associates, Inc.
The U.S. Navy continues to be the
major driver of business for ship-
yards and marine equipment sup-
pliers in the United States. A status
report for shipbuilding programs
and a summary of the FY 1990/91
Navy ship procurement budget is
provide below.
STATUS OF
MAJOR PROGRAMS
Exhibit 1 shows naval ships on
order as of 1 December 1988. Since
then contracts for an additional
eight ships have been awarded:
three DDG-51s (Arleigh Burke
Class destroyers) to Bath Iron
Works, one SSN-21 (Seawolf Class
attack submarine) and one SSN-688
(Los Angeles Class attack submar-
ine) to General Dynamics-Electric
Boat, one SSN-688 to Newport
News Shipbuilding and two DDG-
51s to Ingalls Shipbuilding.
Cost growth—The Navy now
estimates that 22 of 38 current
fixed-price-incentive contracts will
exceed contract target costs by a
total of $3.2 billion. This is substan-
tially greater than the $2 billion cost
growth figure estimated last year for
these 22 contracts. The Navy ex-
pects to absorb approximately $1.4
billion of the cost growth. This
leaves $1.8 billion presumably to be
absorbed by the industry.
SSN-21 (Seawolf Class at-
tack submarine)—The construc-
tion contract for the lead ship was
awarded to GD-Electric Boat in
January 1989. A program of 30 ships
is planned. Newport News and GD-
Electric Boat will compete for fu-
ture work.
SSN 688 (Los Angeles Class
attack submarine)—A total of
63 SSN-688 Class submarines have
been ordered by the Navy. GD-
Electric Boat has received 34 of
these awards. Newport News has
been awarded 29 SSN-688s. Forty
units have been delivered. The re-
maining units will be delivered by
the mid-1990s. The two awards last
December could mark the end of the
program—though at this time two
additional ships are included in the
FY 1990 budget to complete the
program.
CVN (Nimitz Class aircraft
carriers)—Construction of four
nuclear aircraft carriers is in prog-
ress at Newport News. The USS
Abraham Lincoln (CVN-72) de-
livery is scheduled for October 1989.
CVNs 74 and 75 are scheduled for
delivery in December 1995 and June
1998, respectively.
CG 47 (Ticonderoga Class
cruiser)—The last of the 27 ship
Aegis cruisers were funded in FY
1988. Thirteen have been delivered
and the remaining 14 are in various
stages of construction at Ingalls and
Bath Iron Works. The last ship of
this class is scheduled for delivery in
1994.
DDG-51 (Arleigh Burke
Class destroyer)—Funding for
eight DDG-51 Aegis destroyers has
been provided. Bath, the lead ship-
builder for this class, has been
awarded contracts for five Aegis de-
stroyers. Ingalls has received awards
for three ships. The lead ship is
scheduled for delivery in 1991.
LSD-41—Nine LSD-41 landing
ship docks have been funded. Lock-
heed built and delivered the first
three ships. The remaining six ships
are contracted to Avondale. Avon-
dale's last contract (a cargo variant)
includes options for four additional
ships.
LHD-1 (Wasp Class amphi-
bious assault ship)—Litton has
been awarded contracts for four
ships in this class. The USS Wasp
(LHD-1) was delivered in March
1989. LHDs 2, 3 and 4 are scheduled
for delivery in April 1992, January
1993, and March 1994, respectively.
Additional ships in this class are to
be competitively procured in three
ship lots starting FY 1992.
LCAC—Fifteen air cushion land-
ing craft were awarded last Decem-
ber to Textron Marine Systems and
Avondale Gulf Marine. These
awards bring the number of craft
under contract to TMS to 36 units.
Twelve units are under contract to
Avondale. A project is underway to
perform detailed design of Arctic
configured LCACs.
MCM—Eleven mine counter-
measure ships have been funded.
Peterson Builders has received con-
tracts for eight units. Three units
have been awarded to Marinette
Marine. Three units remain to be
funded to complete the program ob-
jective.
MHC—Contracts for two coastal
minehunters have been awarded to
Intermarine USA. Open competi-
tion for the third ship will be con-
ducted to select a second source
builder. Intermarine and the second
source will compete for the remain-
(continued)
May, 1989 33
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