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How General Dynamics could break into the amphibious ship market

Jim Bach

May 3, 2016

Both shipbuilders are effectively set in stone. General Dynamics' NASSCO shipyards in San Diego have always built oiler and other auxiliary ships while Huntington Ingalls’ shipyards in Pascagoula, Mississippi, have always had a lock on amphibious platforms. This process will "light a fire under both these shipbuilders,” with the prospect of potentially shaking up the status quo, said Bryan Clark, a senior fellow at the Center for Strategic and Budgetary Assessments, a D.C.-based defense think tank. "They both feel like, ‘It’s not a done deal, I can’t guarantee that so I need to sharpen my pencils, come up with ways to save money, try to make my bid as attractive as possible,’” Clark added. “I think what the Navy is trying to do is to force both sides to really take a hard look at their bids and not just rest on their laurels and assume they’re going to get it because they’ve done every other ship of that type.” That being said, Clark doesn’t expect any surprises. General Dynamics uses automation to build oiler ships in an assembly line-like process, largely borrowed from partner Daewoo Shipbuilding and Marine Engineering of South Korea, Clark said. Huntington Ingalls’ ships are more complex and require certain components to be handmade, installed and tested. Either shipbuilder would have trouble conjuring up an attractive bid to play to their competitors' level.

...But there is a “wrinkle” in the current contracting regime, Clark said, in that the Navy is looking to award the LX(R) design work based on the labor hours expected from the first two ships. For example, if it takes significantly more labor hours for Huntington Ingalls to build the LHA-8 than it does for General Dynamics to build the oiler, the Navy will award the design contract so that among the three awards, the man hours are distributed evenly.

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