General Dynamics Electric Boat has been awarded a $60 million U.S. Navy contract modification that funds continued design efforts to make Virginia-class submarines more affordable. Electric Boat is a wholly owned subsidiary of General Dynamics (NYSE: GD). Initially awarded in 2008, the overall contract – known as Block III – calls for the procurement of eight submarines through FY 13, and has a potential value of $14 billion. The last Block III ship is scheduled for delivery in 2019. Under the terms of the modification, Electric Boat will continue to develop and implement cost-reduction design changes, an effort called Design For Affordability (DFA). This work will enable the Virginia-class program to reduce acquisition costs by 20 percent in time for the FY 12 submarines. The most significant design change implemented in Block III is the modification of the submarine’s bow, replacing the sonar sphere with a large aperture bow array and the 12 vertical-launch missile tubes with two Virginia Payload Tubes, each carrying six missiles. This redesign will save more than $40 million per ship, beginning with the submarine North Dakota (SSN-784). The DFA effort is supported by Electric Boat’s engineering and design organization, which comprises more than 3,000 employees. Possessing proven technical capabilities, these employees are engaged in all facets of the submarine life cycle from concept formulation and design through construction, maintenance and modernization, and eventually to inactivation and disposal.
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