Bloomberg News

Delay on Huntington Carrier Contract to Save Money, McCain Says

September 13, 2013

The Navy’s decision to delay the award of a contract to start construction on the USS John F. Kennedy will save money by giving the service “more time to assess technical challenges” in a new class of aircraft carriers, Senator John McCain said.

“I support the Navy’s decision this week to defer the award of a construction contract for Kennedy,” McCain, an Arizona Republican, said today in an e-mailed statement. “This decision will ultimately save taxpayer dollars.”

The Navy will delay by as long as a year a contract for at least $4 billion to Huntington Ingalls Industries Inc. (HII:US) to start construction on the Kennedy, Bloomberg reported yesterday, citing U.S. officials who asked not to be identified because the postponement hasn’t been announced.

The Kennedy is the second of three ships planned in the new carrier class. The first, the USS Gerald R. Ford, is the the costliest warship ever built and is projected to cost $12.8 billion when completed and fully equipped -- 22 percent more than estimated five years ago.

In his statement, McCain criticized Navy contracts in which “critical component technologies are developed and tested at the same time they are procured and installed.” The senator, a member of the Armed Service Committee, said he had “voiced my deep concern that the Navy was rushing” to award a contract for the Kennedy “before the costs of the first ship had stabilized.”

‘Lessons Learned’

Commander Thurraya Kent, a Navy spokeswoman, said in an e-mailed statement that until concluding negotiations with Huntington Ingalls on the contract, the Navy intends to extend funding on a smaller construction-preparation contract to “avoid a costly production break.” The Navy awarded that $296 million contract to the shipbuilder last year.

Beci Brenton, a spokeswoman for Newport News, Virginia-based Huntington Ingalls, said in an e-mailed statement that the extension “provides time for the Navy and industry team to implement lessons learned” from the Ford construction, to “identify any government requirement reductions, and increase the maturity of government technologies in order to stay within a challenging budget.”

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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Companies Mentioned

  • HII
    (Huntington Ingalls Industries Inc)
    • $105.88 USD
    • -1.71
    • -1.62%
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