WASHINGTON — Months of negotiations came to an end this week with the US Navy's announcement late Friday of nearly $4.3 billion in contracts to build the new nuclear-powered aircraft carrier John F. Kennedy (CVN 79).
Huntington Ingalls Inc., parent corporation of Newport News Shipbuilding, received a $3.353 billion fixed-price-incentive-firm target contract for all remaining detail design and construction (DD&C) efforts on the carrier.
The shipbuilders also received a $941,175,219 cost-plus-incentive-fee modification to a previously-awarded contract for labor to complete the ship's component and steel fabrication, selected construction unit assemblies, and all remaining direct material.
The DD&C contract is the primary building contract for the ship, although many other contracts are involved in the carrier's construction. The contract award has been delayed for some time – the 2011 budget request scheduled it for December 2012, while the 2014 request listed it for September 2013.
But it's not unusual for DD&C contracts to be delayed. Not only are they quite complex, but sometimes both sides want to await developments to see how certain issues play out before committing to contract. In the meantime, a variety of contract instruments have been available to keep construction work moving along.
The Kennedy is the second ship in the Gerald R. Ford (CVN 78) class, representing the first new carrier design since the 1960s. The Ford is fitting out at Newport News, and is expected to be delivered and commissioned in 2016.
The Kennedy will be followed by a third ship, Enterprise (CVN 80).
Rear Adm. Thomas Moore, program executive officer for aircraft carriers at the Naval Sea Systems Command, noted Friday's contract award, calling it a significant milestone in the carrier program.
"This DD&C contract is the result of a dedicated effort over the past three years by our government-industry team to drive affordability into CVN 79," Moore said in a statement. "With a stable design, mature requirements and an improved build process we will reduce construction hours [over the Ford] by 18 percent, lower the cost to build the ship by almost $1 billion in real terms compared to CVN 78 and meet the cost cap. Importantly, this contract also represents the first step in an ongoing process that will continue to reduce the cost of future ships of the class starting with CVN 80."
Mike Shawcross, vice president at Newport News for the John F. Kennedy program, cited the significance of the DD&C contract in a statement.
"These awards are important, not only for the shipbuilders at Newport News Shipbuilding, but for the thousands of suppliers nationwide who provide the steel, pipe, cable, paint and equipment that goes into this cutting-edge defense platform – and for the sailors who will sail her," he said.
"We look forward to continuing to implement lessons learned from the first-of-the-class ship, Gerald R. Ford, in the construction of Kennedy and delivering the next great carrier to the Navy."
Newport News Shipbuilding noted that steel was first cut for the Kennedy in December 2010.
"Since then, more than 450 of the ship's 1,100 structural units have been constructed under a construction preparation contract that will be used to start erecting the ship's hull," the company said in the statement.
A keel-laying ceremony for the Kennedy is scheduled for Aug. 22.
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