AUSTAL USA TO PRIME LCS BID

Austal USA and Bath Iron Works (BIW) have agreed to revoke their current teaming arrangement. This strategic decision allows Austal USA to act as Prime Contractor in the upcoming bid for 10 US Navy Littoral Combat Ships (LCS). The US Navy is expected to award the contract for two LCSs, including options for an additional eight vessels, by the end of US FY10. In the event that Austal USA is awarded the FY10 contract, potentially worth up to US$4.8 billion, it will continue to act as Prime Contractor for future LCS bids. General Dynamics Advanced Information Systems, which is currently the systems integrator in the program, will now subcontract to Austal USA, as it currently does in the Joint High Speed Vessel (JHSV) program, providing open architecture systems that deliver better, faster and more affordable capability. In reaction to Austal’s decision to act as prime contractor for its future in the LCS program, Joe Rella, Austal USA President and Chief Operating Officer, commented, “Working with BIW, whom we hold in the highest regard as one of the best surface naval shipbuilders in the world, has enabled us to achieve a level of maturity and experience to be a Prime Shipbuilder of US Naval Combatants, and we are ready to take on this new leadership role in the LCS program.” The US Navy has also determined that an additional five-ship contract, to be awarded in FY12, shall not be awarded to the same contractor as the 10-ship contract. Therefore, revoking the current agreement will allow BIW to bid as the second source LCS shipbuilder. BIW will continue to act as Prime Contractor for Austal’s second LCS, Coronado (LCS 4), which is currently under construction at Austal USA and due for completion in 2012. The Austal-designed and built Littoral Combat Ship, USS Independence (LCS 2), officially joined the operating forces of the United States Navy at an historic commissioning ceremony held near Austal’s Mobile, Alabama facility on January 18, 2010. The 127-meter all-aluminium vessel is capable of being outfitted with reconfigurable payloads (Mission Packages) which can be changed quickly to support mine countermeasure, anti-submarine and surface warfare missions. The lightweight and fuel efficient vessel has a maximum speed of more than 45 knots. As Prime contractor, Austal was awarded the construction contract for the first 103-meter Joint High Speed Vessel (JHSV), the US Department of Defense’s next generation multi-use platform, in November 2008, with options for nine additional vessels expected to be exercised between FY09 and FY13. Austal received authorization from the Navy to start construction on JHSV 1 in December 2009 after completing the rigorous design in a 12-month period. On January 28, 2010, Austal was instructed by the Navy to move forward with the construction contract for the second and third JHSVs, as part of a total 10-ship program potentially worth over US$1.6 billion. Austal is teamed with General Dynamics Advanced Information Systems who will design, integrate, and test the ship’s electronic systems, including an Open Architecture Computing Infrastructure, internal and external communications, electronic navigation, aviation, and armament systems.