Huntington Poised for $4 Billion U.S. Naval Carrier Order

The U.S. Navy intends to award Huntington Ingalls Industries Inc. (HII) a contract early next year, potentially for more than $4 billion, to build the second of a new class of aircraft carriers. “The Navy is still negotiating with the company to reach a fair and reasonable price, and we hope to do that as soon as possible,” Commander Thurraya Kent, a spokeswoman for the service, said in an e-mail. “Early 2015 is still” the intended contract award date, she said this week. The ship, the USS John F. Kennedy, is the second of three planned in the new carrier class. While Congress has ordered that the Kennedy’s cost be capped at $11.5 billion, the first ship, the USS Gerald R. Ford, is projected to cost $12.9 billion when completed and fully equipped, 22 percent more than estimated five years ago. A Government Accountability Office report on Nov. 20 said the Ford’s cost may increase even more and that planned savings for the Kennedy assume labor efficiencies never achieved in building an aircraft carrier. According to Huntington Ingalls, the new class of carriers has a redesigned command center and flight deck, can launch and recover 25 percent more aircraft than existing Nimitz-class carriers can and should save a projected $4 billion in ownership costs over its 50-year lifespan. Newport News, Virginia-based Huntington Ingalls gets 94 percent of its revenue from the U.S. Navy, according to Bloomberg Intelligence. The Navy already is grappling with how to pay for a shipbuilding plan that anticipates the three-carrier Ford class, as well as $22.6 billion for at least 32 Littoral Combat Ships and a 12-vessel nuclear submarine fleet to replace the Ohio-class submarine, which may prove most expensive of all. The contract to begin the Kennedy’s detailed design and construction originally was to be awarded to Huntington Ingalls in September 2013. Instead, the Navy extended an existing $296 million “construction preparation” contract without disclosing details on the reasons for the delay.