February 21, 2018
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Analyst: Bath Iron Works is well positioned for $15 billion frigate contract

Weston Jones | AP | BDN
Weston Jones | AP | BDN
In this Oct. 5, 2016, photo released by the U.S. Navy, the Spanish Navy frigate Alvaro de Bazan, right, cruises alongside the destroyer USS Carney, left, off the coast of Rota, Spain, in the Mediterranean Sea. Bath Iron Works in Bath, Maine, said in November 2017 it is partnering with the Spanish builder of the Alvaro de Bazan on a new design for up to 20 frigates for the U.S. Navy.
By Beth Brogan, BDN Staff
Updated:

BATH, Maine — As the U.S. Navy looks to reactivate the guided-missile frigate program to help it near its stated goal of a 355-ship force, Bath Iron Works will work with Spanish ship designer Navantia to submit a concept design on a new frigate currently known as FFG(X).

Bath Iron Works and Navantia will collaborate to submit a design to meet a Dec. 18 deadline, president Dirk Lesko confirmed last week. The frigate could be based on Navantia’s Aegis Frigate, according to multiple sources.

BIW, which held the lead ship construction contract for the Oliver Hazard Perry class of guided missile frigates, delivered 24 of the vessels between 1973 and 1988. The Maine shipyard is well-positioned to bid for the contract of 20 new frigates, which will be awarded to a single builder, according to a Congressional Research Service report.

“The ship is closer to a ‘tried and true’ acquisition for the Navy with requirements that BIW should be very comfortable with,” Jay Korman, senior Navy analyst with the Washington, D.C.-based consulting firm The Avascent Group, said Monday. “On top of that, BIW has been involved with the design of both older legacy frigates as well as the more recent Littoral Combat Ship and its derivative, and by modifying an existing design, BIW will be able to retire some cost and risk for the Navy. Combined, all this should make BIW competitive for the program.”

But Korman warned that with both lower cost major and mid-tier yards expected to bid, “this won’t be a cakewalk for BIW,” and the company will have to control costs to win the contract.

The Navy has added the FFG(X) program to its fiscal year 2018 budget submission, proposing to procure one each in fiscal years 2020 and 2021, and then two per year from 2022 to 2030, according to a Nov. 9 report from the Congressional Research Service.

The overall contract will be worth about $15 billion, a defense analyst told CNBC. According to the report, the Navy requests that each frigate cost no more than $950 million.

The frigates will be built based on an existing ship design rather than a new design, and will include no new technologies or systems, according to the report. They will be smaller, less capable and less expensive than destroyers or cruisers but larger and more expensive than littoral combat chips.

They are envisioned as multimission ships capable of conducting anti-air warfare, anti-surface warfare, anti-submarine warfare and electromagnetic maneuver warfare operations.

The Navy expects to award up to five conceptual design contracts in fiscal year 2018, with a detailed design and construction contract in 2020.

But the report raises the question of the importance of the work for two shipyards expected to bid, Fincantieri/Marinette Marine of Marinette, Wisconsin, and Austal USA of Mobile, Alabama, both which build the littoral combat ship and both of which employ 1,000 people in manufacturing.

Lockheed Martin and Huntington Ingalls are also expected to bid for the contracts.

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Correction: An earlier headline incorrectly stated the value of the frigate contract.


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