BATH — Defense analysts suspect the Navy’s decision last week not to award a $5.58 billion contract for up to 10 guided-missile frigates to Bath Iron Works was due to cost and the Bath shipyard’s full schedule.
Analysts say Italian shipbuilding company Fincantieri was awarded the contract because it presented a design it can build at a lower cost than BIW pitched. The Bath shipyard also has contracts to build 11 Arleigh Burke-class destroyers for the Navy over the next decade, which works against the company when bidding for contracts because it’s less desperate for the work.
“BIW was one of the few frigate contenders with a full order book,” said Craig Hooper, a national security consultant who has written about Naval affairs for a number of publications, including his blog NextNavy. “It’s somewhat hard for a shipyard that is already locked into a large backlog of business — that was probably optimized to the existing capability of the shipyard — to offer great terms to the government customer.”
The frigate contract is for detailed design and construction of the lead ship, with an option for nine more. Fincantieri will build its frigate at its Marinette Marine shipyard in Wisconsin, the Navy announced last week. The first ship ordered in 2020 is expected to cost $1.28 billion, according to a report from the Congressional Research Service.
David Hench, BIW spokesman, said the company couldn’t comment on questions regarding its business strategy, but stated the shipyard “will continue to focus our energy on meeting the needs of the U.S. Navy by delivery Lyndon B. Johnson (DDG1002) and the 11 Arleigh Burke-class destroyers we currently have under contract. The DDG-51 is a proven design that has shown its ability to evolve and deliver increased capabilities to the fleet.”
The most recent class of frigates used by the Navy was the Oliver Hazard Perry class, of which 51 were built and later decommissioned between 1994 and 2015. BIW was among the shipyards that built that class. The Oliver Hazard Perry frigates were about 455 feet long and around 4,000 tons, whereas Arleigh Burke-class destroyers are about 510 feet long and weigh in at roughly 9,300 tons.
With the frigate contract out of the picture, Arleigh Burkes are the only type of ship BIW will build for the next decade, with the exception of the third and final Zumwalt class destroyer currently under construction in Bath. While its focus on Arleigh Burkes makes the company a “one-trick pony,” according to Jay Korman, a Navy analyst with Avascent Group in Washington, he added the shipyard is still in a comfortable position.
“While this [frigate] program was classified as a must-win for BIW, it wasn’t existential,” said Korman. “Win or lose, BIW still has an enviable position in the marketplace. The Navy expects to procure large, surface combatants, and BIW is in that.
“[Fincantieri] may have been desperate enough for the work that they offered a really good price to the government customer,” Hooper added.
Wisconsin legislators wrote a letter to President Donald Trump in early March, encouraging him to direct the frigate construction contract to the Marinette shipyard in Wisconsin. The letter painted Fincantieri Marinette Marine as a vital economic engine in northeastern Wisconsin, the Associated Press reported. The frigate contract would generate another 1,000 jobs for the region, the letter said. If the Navy hands the contract to someone else, however, Fincantieri could end up closing its shipyard, the lawmakers warned.
But Korman said there’s still hope for BIW to get a slice of the frigate deal.
“If the current provider stumbles, they can invite other companies to help build ships with their blueprint,” said Korman. “This story hasn’t been fully written yet, but Fincantieri will have to stumble. All they have to do is perform and the other companies could get locked out.”
Loren Thompson, chief operating officer of the Virginia-based Lexington Institute, a nonprofit focused on security issues, said he anticipates the Navy will continue procuring Arleigh Burke-class destroyers for years to come. This puts BIW in a favorable position, but he stressed the company needs to ensure it remains competitive on price because it doesn’t have a monopoly on making the destroyer. Mississippi-based Huntington Ingalls also builds Arleigh Burkes for the Navy.
“We know Bath Iron Works has a reputation of building high-quality ships and having a first-class management team,” said Thompson. “It needs to hold onto the skills and discipline that made it great, but offer those things to the Navy at a price that can’t be beat.”
During a confirmation hearing with the Senate Armed Services Committee on Thursday, Sen. Angus King asked Adm. Kenneth Braithwaite, President Trump’s nominee for Navy Secretary, if he would consider another multi-year contract for multiple Arleigh Burkes in 2023.
“Absolutely, Senator,” said Braithwaite. “(The Arleigh Burkes) is the backbone (of the Navy) and something we have relied upon as the department for the power projection that platform provides.”
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