News Summary
The U.S. Navy has awarded a significant contract to Newport News Shipbuilding to construct two more Virginia-class submarines. This marks a crucial advancement in enhancing the Navy’s fleet amidst evolving global threats. Senator Tim Kaine applauded the award for its positive economic impact on Virginia’s shipbuilders. The contract upgrade aligns with strategic goals for national security and aims to achieve a 313-ship fleet by 2025, despite current estimates falling short.
Newport News, Virginia – The U.S. Navy has awarded a contract to Newport News Shipbuilding for the construction of two additional Virginia-class submarines, marking a significant step in strengthening the Navy’s fleet. This announcement was made jointly by Huntington Ingalls Industries (HII) and the U.S. Navy.
These submarines will be the 11th and 12th fast-attack submarines under the Block V contract. The contract modification showcases the Navy’s commitment to enhancing its warfighting capabilities, particularly in the face of evolving global threats.
Jason Ward, vice president of submarine construction at Newport News Shipbuilding, expressed gratitude for the collaborative efforts that contributed to securing this contract. In support of this venture, U.S. Senator Tim Kaine celebrated the award as a testament to the dedication and hard work of Virginia’s shipbuilders, emphasizing the positive impact on the local economy.
The funding for these submarines was made possible through legislation passed last year, indicating a sustained priority for naval construction initiatives. To date, Newport News Shipbuilding, in partnership with General Dynamics Electric Boat, has successfully built and delivered a total of 24 Virginia-class submarines, which play a critical role in national security.
Risk Management and Fleet Plans
The contract modification comes amid a reassessment of shipbuilding contracts due to recognized shortfalls in the industry. Secretary of the Navy John C. Phelan addressed the need for renegotiating contracts to improve risk-sharing between the Navy and shipbuilding companies, reiterating that delays and budget overruns in warship construction and maintenance are considered unacceptable.
According to the Navy’s fiscal plan, it aims to achieve a fleet of 313 ships by 2025, though current projections predict a shortfall, expecting only 287 ships to be operational. This reality underscores the pressing need for efficient and effective shipbuilding processes to ensure that the Navy maintains its operational readiness.
Financial Performance and Revenue Insights
In recent financial disclosures, HII reported a 2.5% decline in first-quarter revenues for 2025 compared to the same quarter in the previous year. The drop in revenue has been attributed to lower volumes at Newport News Shipbuilding, Ingalls Shipbuilding, and Mission Technologies.
During the first quarter of 2025, new contract awards for HII reached $2.1 billion, contributing to an overall backlog of approximately $48 billion. Specifically, Newport News Shipbuilding generated revenues of $1.4 billion, reflecting a decline of 2.6% from the prior year. However, the operating income for the segment saw an increase to $85 million, up by $3 million year-over-year. The operating margin for this segment improved to 6.1%, a rise from 5.7% in the previous year, driven by contract incentives linked to the Virginia-class submarine program.
Future of Virginia-Class Submarines
Virginia-class submarines are designed primarily for anti-submarine warfare and intelligence gathering missions. They are intended to replace the aging Los Angeles-class submarines over the next few decades, with the current estimated unit cost for the new submarines sitting at around $4.3 billion each. The Navy’s long-term plan involves constructing a total of 66 Virginia-class vessels, ensuring sustained operational capacity and modernization of its submarine forces.
This latest contract reflects ongoing efforts by the U.S. Navy to maintain its competitive edge through advanced maritime capabilities while addressing industry challenges in shipbuilding and project management.
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- 13 News Now
- American Machinist
- HII News
- Janes
- GlobeNewswire
- Wikipedia: Virginia-class submarine
- Google Search: US Navy submarine contracts
- Google Scholar: Virginia-class submarines
- Encyclopedia Britannica: Virginia-class submarine
- Google News: Huntington Ingalls Industries
