BIW destroyer contract hinges on price
Bath Iron Works and the Navy are having trouble reaching an agreement over pricing and other terms of contracts to build the next two DDG 1000 class destroyers, letters between Secretary of the Navy Ray Mabus and U.S. Rep. Chellie Pingree reveal.
In an letter to Pingree, Mabus said BIW and the Navy "remain significantly apart" in details related to setting contracts for the second and third ships in the DDG 1000 class, according to The Times Record. He said BIW's current proposal is higher than the cost estimate the Navy budgeted for the three ships in the new line of destroyers, and that both the Navy and BIW have been directed to find ways to reduce costs.
Mabus was responding to Pingree's letter, which expressed concerns that contract delays would result in timing problems for the shipyard as the Navy prepares to restart the previous destroyer program, DDG 51. In 2009, the Navy decided that BIW will build all three DDG 1000 ships, while Ingalls Shipyard in Mississippi will begin work on the restarted DDG 51 line. BIW is in line to build the third DDG 51 ship and will compete with Ingalls in a bid for the fourth. Pingree told the paper she wanted to ensure delays with the DDG 1000 contracts would not affect BIW's ability to transition to DDG 51 work and it keep the current work force employed.
BIW is currently building the first ship in the DDG 1000 line, which has a price tag of $1.8 billion, and though the shipyard has received some funding for advance work on DDG 1001 and DDG 1002, negotiations for full contracts are still ongoing. Many analysts predicted the contracts would be finalized more than a year ago, according to the paper.
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