Bath Iron Works could land contract for additional Arleigh Burke-class destroyer

Posted June 09, 2014, at 5:56 p.m.

BATH, Maine — The fact that the Marine Corps usually gets what it wants bodes well for Bath Iron Works’ chances of winning a contract to build another DDG-51 destroyer, a leading defense industry analyst said Monday.

Naval industry analyst Jay Korman of The Avascent Group said Monday that a new amphibious transport is a priority for the Marine Corps.

“The Marine Corps is known for getting a lot of what they want,” he said. “I’d say there’s a better-than-even shot at [the Marine Corps] getting the ship.”

If they do, Maine’s congressional delegation and BIW officials believe it would trigger a 12-year-old agreement between BIW and a competitor that would spur the Navy to award BIW a contract for another Arleigh Burke-class destroyer in addition to the five slated for construction at the Maine shipyard.

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Still, Korman said the price will be an obstacle. The amphibious transport vessel carries a price tag of about $1.8 billion, according to DefenseNews, while the DDG-51 costs about $1 billion.

“The Navy could find the money, but, especially if they have to find the money in addition to another DDG-51, we’re talking a lot of money,” he said.

A 2002 memorandum of understanding among the Navy, BIW and Northrop Grumman, then the lead yard for the San Antonio-class amphibious transport dock ship ( LPD-17), transferred four LPD-17s scheduled to be built at BIW to Northrop Grumman-owned Ingalls and Avondale shipyards in exchange for four DDG-51 destroyers contracted to Northrop Grumman.

The move was designed to save money and improve workload stability at the three yards, the Navy said at the time.

In 2011, Northrop Grumman spun off its shipbuilding business into Huntington Ingalls Industries Inc. Huntington Ingalls is slated to build 11 LPD-17s.

The memorandum of understanding states that a fourth DDG-51 class ship “or equivalent workload” would be awarded to BIW preceding any award of a 12th amphibious transport vessel.

In June 2013, the Navy awarded BIW contracts for four DDG-51s, while Huntington Ingalls landed contracts for five. In March, the Navy awarded a fifth ship to BIW.

According to a statement issued by BIW on Monday, the Navy could award BIW one of the DDG-51’s already slated to be built at Huntington Ingalls or as a new appropriation in the 2015 budget. That allocation must precede or be concurrent with the award of any contract for a new Marine Corps amphibious transport vessel to Huntington Ingalls.

The Marine Corps has expressed support for restarting the LPD-17 line, and in March, 20 former U.S. Marine Corps generals wrote to Congress supporting extending the LPD-17 class beyond the Navy’s plan of 11 ships, the U.S. Naval Institute reported.

In late May of this year, the House passed the fiscal year 2015 National Defense Authorization Act bill, including authorization for another LPD ship and two additional DDG-51s. The Senate also passed the bill out of committee, including up to $650 million for construction of the San Antonio-class amphibious ship.

Responding to a request from members of the Maine congressional delegation, the Department of Defense in May confirmed that the 2002 memorandum of understanding “remains in full force and effect, and requires the Navy to award a DDG-51 class ship, or equivalent workload, to BIW if the Navy awards the [Marine Corps’ amphibious transport vessel] to HII.”

“We believe the 2002 [agreement] is still in effect, the ‘four LPDs for four DDG-51s’ terms from the original agreement are still binding, and we are currently at ‘three for three,’” BIW spokesman Matt Wickenheiser said in an email Monday. “We are neither for nor against [awarding a contract for a new amphibious transport vessel], but we would expect to be awarded a DDG-51 prior to the award of [a new amphibious transport vessel], if it is appropriated — under the terms of the 2002 agreement.

Scott Ogden, spokesman for Sen. Angus King, said Monday that King would continue discussions with the Navy on the issue and continue to watch the situation closely.

“It is Sen. King’s belief — which has been confirmed by the Navy — that the 2002 [agreement], reaffirmed by the parties in 2009, is still in effect and that, per that understanding, the award of an additional LPD requires the Navy to award an additional DDG-51 destroyer to Bath Iron Works,” Ogden said in an email to the Bangor Daily News.

“The 2002 agreement is pretty clear that if the Navy signs a contract for another LPD with Ingalls, they need to order another DDG-51 from BIW. And if Congress is going to pass legislation that leads to another LPD being built, everyone should be clear that agreement will have to be honored,” said U.S. Rep. Chellie Pingree, D-Maine.


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