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Shipyard: Contract certainty reduces sub costs

Sunday - 7/6/2014, 4:37pm  ET

BROCK VERGAKIS
Associated Press

NEWPORT NEWS, Va. (AP) -- Company officials at Newport News Shipbuilding say the Navy will be getting ten submarines for the price of nine under their latest contract order.

Newport News Shipbuilding and its Groton, Connecticut-based partner General Dynamics Electric Boat were awarded the largest single contract in Navy history this spring.

The companies received a $17.6 billion contract to build 10 Virginia-class submarines. The companies are already building two submarines a year, but officials say having the certainty that comes with ordering 10 submarines at once allows them to drive down costs. That's accomplished by placing bulk orders from their suppliers at reduced costs and speeding up construction, which cuts labor costs.


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