General Dynamics Receives $1.35 Billion Contract Modification For Virginia-class Submarine Procurement
GROTON, Conn. – The U.S. Navy today awarded General Dynamics Electric Boat a $1.35 billion contract modification that provides funding for the construction of the eighth Virginia-class submarine and advance procurement for the ninth and 10th ships of the class. Electric Boat is a wholly owned subsidiary of General Dynamics (NYSE: GD).
The award modifies an August 2003 contract for the construction of six Virginia-class submarines at a rate of one per year from FY 03 through FY 08; the total value of the contract is $8.4 billion. Altogether, Electric Boat and its construction teammate, Northrop Grumman, have received contracts to build 10 ships of the class. The lead ship, USS Virginia (SSN-774), was delivered to the Navy in October 2004.
Today’s contract modification has been factored into the company’s workload projections since the initial contract was announced in 2003. It is not unplanned work. For that reason, it will not affect the number of layoffs the company will make over the next two years.
The contract modification provides $1.1 billion for construction of SSN-781, $208 million in advance procurement for SSN-782 and $40 million for SSN-783.
Fifteen percent of the work will be performed at Electric Boat’s Groton shipyard; 15 percent at its Quonset Point, R.I., facility; 30 percent at Northrop Grumman in Newport News, Va.; and 40 percent at various sites throughout the U.S. Work under the overall contract is scheduled for completion in 2014 when SSN-783 is delivered.
General Dynamics, headquartered in Falls Church, Virginia, employs approximately 72,200 people worldwide and had 2005 revenue of $21.2 billion. The company is a market leader in mission-critical information systems and technologies; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and business aviation.
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Any "forward-looking statements" contained in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
General Dynamics Corporation (ticker: GD, exchange: NYSE)
News Release - Monday, January 30, 2006
Press Contact: (860) 433-8556
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