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US SIGNS CARRIER DEAL WITH NORTHROP

US SIGNS CARRIER DEAL WITH NORTHROP – CVF WITHIN BUDGET?

21 May 04. The u.s. Navy and Northrop Grumman Newport News (NGNN) have successfully negotiated the construction preparation (CP) contract for CVN 21, the next generation aircraft carrier. CVN 21 will be the centerpiece of tomorrow’s carrier strike groups and a contributor to the future expeditionary strike force as envisioned in “Sea Power 21.”

Advance procurement and advance construction of components and associated design efforts in support of the anticipated Fiscal 2007 ship procurement for CVN 21 are provided for under the contract.

CVN 21 CP contract is a three-year, cost type contract for advanced
procurement of material, design and engineering, and advance construction of CVN 21.

The total value of the contract is $182,454,576 cost-plus-fixed-fee contract ,includes a fee earnable to $161.9m, with performance incentives for CVN 21 design effort; long lead time material and non-nuclear advance construction; and system development, engineering services, and feasibility studies for the Future Aircraft Carrier Program. Newport News Shipbuilding will provide all CVN
21 services and material in preparation for ship construction planned to commence in FY07. Work will be performed at Newport News, Va. (87 percent) and Groton, Conn. (13 percent), and is expected to be completed by December 2006. Contract funds will not expire at the end of the current fiscal year. This contract was not competitively procured. The Naval Sea Systems Command, Washington, D.C. is the contracting activity (N00024-04-C-2118).

Speaking about the contract, John Young, assistant secretary of the
Navy for research, development and acquisition said, “The contract agreement reached by the Navy and the Northrop Grumman Newport News (NGNN) team is an important step in the course charted for development of the next generation aircraft carrier. This contract provides for the continued design and development of the next generation aircraft carrier, as well as incentives for NGNN and the Navy team to work together to develop and manage the design of the CVN 21. The contract structure has a portfolio of incentives that focuses on obtaining the most innovative ship design that will meet the program’s performance goals, while emphasizing timely delivery and control of all costs – material, labor, facilities, overhead and construction. This CP contract is a win-win for both the Navy and NGNN and is a significant accomplishment for the CVN 21 program. The contract establishes key metrics for NGNN and the Navy and provides the tools necessary for the Navy to work with NGNN to manage the design of CVN 21.”

Comment: The size of this figure approx £700m which is based on mainly consultant fees and no hull manufacture or equipment must send question marks as to the DPA’s wisdom in rejecting BE Systems’ claim that the current budget of £2.8bn for two aircraft carriers for the CVF is way off the mark and explains BAE’s reluctance to Prime the contract which, looking at these figures, would blow another hole in its already weakened balance sheet. Thales told BATTLESPACE last night that the final specification or budget has not been set and the tonnage could rise to nearer 60,000 tonnes which would further escalate the price.

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