Electric Boat loses out on contract worth up to $385M
600 employees would have done work on overhaul of USS Boise
Groton — Electric Boat lost out on a contract worth up to $385.6 million to overhaul the USS Boise, which has sat pierside in Virginia since May 31, 2016, due to a backlog at the Navy’s public shipyards.
The Navy awarded the $59.7 million planning contract on Oct. 16 to Newport News Shipbuilding, with planning starting immediately. If all options are exercised, the contract could be valued at $385.6 million.
EB submitted a bid for the work on the Boise, a Los Angeles-class attack submarine based in Norfolk, Va., and is “disappointed” that the package wasn’t accepted, spokeswoman Liz Power said.
“We look forward to a debrief with the Navy, where we will discuss our proposal and how we can better position EB for consideration for future maintenance and modernization work, which gives our workforce the opportunity to maintain and sharpen their skills,” Power said in an emailed statement.
EB officials have said that getting these large maintenance jobs is crucial to sustaining its workforce during valleys in its work, which is cyclical in nature. An estimated 600 EB employees would have worked on the Boise.
The Boise’s dive certification expired in June 2016 due to required maintenance not being performed. The loss of its dive certification means the submarine cannot submerge.
The submarine initially was scheduled to go in for an overhaul in September 2016 at the Norfolk Naval Shipyard, one of the Navy’s public shipyards. But in July 2016, the Navy decided to push back the overhaul due to backlogs at the public shipyards, which would have meant the Boise would have been out of service until June 2019.
Instead, on March 17 the Navy issued a solicitation to the two private shipyards that build U.S. submarines — EB and Newport News — for the overhaul work. By shifting the work to a private yard, 21 months of lost sea time was restored, according to the Navy.
Earlier in the year, U.S. Sens. Richard Blumenthal and Chris Murphy, both D-Conn., urged the Navy to accelerate the awarding of the contract. Blumenthal said at the time that as much as $30 million could be saved by EB doing the work, and that it could be done faster because the company already had workers in place and trained to do the job.
EB is finishing up the overhaul of the USS Montpelier, the largest and most complex maintenance and modernization in the company’s history. The overhaul was scheduled to be completed in February 2018, but EB now says it expects to be done in May 2018. Several hundred EB employees are working on the Montpelier. The Navy awarded the $46.4 million contract to EB in 2015. That contract has a potential value of $259.6 million if all options are exercised.
Blumenthal, in a written statement on Tuesday, said the Navy “made a disappointing decision that fails to seize the opportunity to alleviate the hiring valley ahead for Electric Boat as it prepares for the Virginia and Columbia Class boats.”
Murphy said in a separate statement Tuesday, “Unfortunately, EB doesn’t win every contract they bid on, but their future is incredibly bright as the surge in Columbia and Virginia-class submarine production continues.”
EB will be doing the majority of the work building the new fleet of 12 ballistic missile submarines, known as the Columbia class. The company also is expected to stay busy building Virginia-class attack submarines, which it builds together with Newport News as part of a teaming agreement, with each company alternating delivery.
Meanwhile, there’s talk in Congress of ramping up the production of attack submarines even more.
The Boise is expected to remain pierside at the naval base in Norfolk until June 2018, when it will go to the shipyard at Newport News. Work is not expected to start until January 2019 and is supposed to be completed by 2021.