The U.S. Navy and the private sector have partnered to expand the production capacity of the U.S. submarine industrial base as part of efforts to strengthen the country’s maritime dominance and national security.
Contract Award to Austal USA
Austal USA said Monday it secured a potential $152 million contract from the Navy to invest in infrastructure to support the service branch’s goal of delivering one Columbia-class and two Virginia-class submarines each year.
Under the contract, Austal USA will receive funding to invest as a partner in a private investment fund – the United Submarine Alliance Qualified Opportunity Fund – that seeks to broaden the U.S. submarine industrial base’s manufacturing capacity by improving ancillary facilities and infrastructure.
“This contract from the U.S. Navy to expand production capacity further strengthens the role Austal has cemented in the US submarine industrial base,” said Austal CEO Paddy Gregg.
The Department of Defense said Friday contract work will occur in Mobile, Alabama, through September 2026.
Naval Sea Systems Command will obligate the full contract amount using the National Sea Base Deterrence funds for the fiscal year 2024.
The award came a week after Austal USA secured a $450 million contract from General Dynamics Electric Boat to expand its U.S. shipyard’s submarine module production capacity.
USA Fund
According to the Navy, the USA Qualified Opportunity Fund has purchased the assets of the 355-acre Alabama Shipyard in Mobile with the aim of developing an additional 75 percent of the site to back submarine production, industrial capacity and workforce training.
“Today’s announcement underscores our commitment to finding innovative and creative solutions to accelerate submarine production and is emblematic of my Maritime Statecraft initiative that seeks to incentivize expansion of our national shipbuilding capacity by engaging new, forward-leaning stakeholders and leveraging the power of public and private investment,” said Carlos Del Toro, secretary of the Navy.
“This announcement answers my call for investment into small-to-medium size shipyards, both active and dormant, that were previously the backbone of our Nation’s maritime power, and I look forward to continuing to work with industry on future initiatives to strengthen our maritime industrial base,” the 2024 Wash100 awardee added.
According to the company, the USA Fund will own the acquired facilities.
The Navy expects the project to generate about 3,000 new jobs while maintaining current employment at the site.
