The National Oceanographic and Atmospheric Administration (NOAA) awarded a $73.6 million contract to Marinette to build a new fisheries survey vessel, dubbed FSV-6, to be based in San Diego, Calif. Delivery of the 208-foot-long, 2,500-ton ship is scheduled for 2013.

The award marked a shift for NOAA from VT Halter, which built the first four FSVs of the class and is finishing up a fifth ship of a different design.

NOAA spokesman David Hall declined to discuss the award, citing Federal regulations.

The win by Marinette marked the second new ship contract in a month. On March 11 the company announced it had won a $120 million contract from the National Science Foundation to build a new 253-foot arctic research ship for the University of Fairbanks, Alaska.

The work could be critical to keeping Marinette’s workforce employed while awaiting the outcome of the U.S. Navy’s Littoral Combat Ship (LCS) downselect, expected to take place this summer. Marinette is the shipbuilder for Lockheed Martin’s LCS bid, in competition with Austal USA. Even if the Lockheed-Marinette team wins the LCS award, it might be some time before actual construction begins, a key company executive pointed out.

The new contract “fills in some gaps to help us maintain a more level work force,” said Terrance Etnyre, a retired Navy vice admiral who is Marinette’s vice president for government programs. “Even with the downselect, you won’t actually be bending steel for a year or so. This helps us maintain a more consistent work force and keep our rates down.”

Etnyre noted that among its three shipyards, Marinette Marine Corporation “has a relatively versatile capability to build different types of vessels – all-aluminum, smaller craft, LCS, specialized ships for use in other government agencies.”

Italian-based Fincantieri, which finalized its acquisition of Marinette in early 2009, is making a number of infrastructure improvements to the shipyards. The company is putting about $75 million into capital investments at Marinette, Etnyre said, and in mid-March broke ground for a 250-foot extension to the yard’s main erection building, which when complete will allow two LCS ships to be built under cover.

Etnyre noted that the NOAA award shows that “Marinette Marine is a very competitive yard, able to put together proposals that are very attractive to the customers.

“Anytime,” he added, “that a shipyard can come in to a program that’s been around for awhile, the customer has to have some confidence that the yard will be able to manage it.”

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Response Boats - Medium (RB-M) (click for slideshow)

The contract has an approximate value of $63,600,000. The new boats are part of a multi-year, Coast Guard contract requiring the construction and delivery of up to 250 Response Boats – Medium or (RB-Ms), at a total contract value of up to $600 million.

Delivery of the 30 boats is scheduled to begin in the summer of 2011. The total number of boats under contract is now at ninety-seven.

Marinette Marine will build 50% of the boats at its ACE facility in Green Bay. MMC’s Teaming Partner, Kvichak Marine Industries of Seattle, will build the other 50% of the boats at its Kent, WA facility.

Established in 1942, Marinette Marine Corporation a Fincantieri Company, with its shipyard facilities in Marinette, WI. The company is a leading shipbuilder serving the government, military and commercial customers throughout the maritime industry.

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Loren Thompson, with the Lexington Institute, said the company acquired the Gulf Coast shipyards of Ingalls and Avondale when it bought out Litton in 2001, seeking Litton’s military electronics business.

And performance has gone downhill, he said, touting the heyday years when Jerry St. Pe’ ran the Ingalls yard for Litton.

“Why would you expect a company that is at the cutting edge of modern technology in most of its businesses to be good at old-fashioned, industrial metal-bending?

“And how many companies would even be willing to deal with a customer as surly and capricious as the U.S. Navy?” Thompson asked in his think-piece published Monday.

“In 2009, shipbuilding generated less than a fifth of Northrop’s sales while yielding profit margins well below those of the bigger aerospace, electronics and information segments,” he pointed out. “Repeated, unpleasant surprises from the company’s shipbuilding operations have become a drag on investor perceptions of what should be one of the world’s most respected technology companies.”

Thompson referred to a detailed Defense News article in March that suggested Northrop Grumman consider letting go of the Avondale yard in Louisiana, citing work problems and delays, and pointing out that the head of both General Dynamics and Northrop Grumman discussed with Congress the reduction in the number of ships to be built for the Navy.

Northrop Grumman also is in the process of changing out management and its performance metrics, Thompson said in an interview Wednesday. “In the old days, it was interested in growing revenue. Now it’s interested in growing profits, and Ingalls requires a lot of investment.”

Thompson said the thought of Northrop Grumman leaving shipbuilding isn’t the same thing as losing Ingalls. Ingalls is the biggest and most modern shipyard in the United States building military ships, he said.

“Ingalls is not going away. It’s possible Northrop Grumman will, but Ingalls is not.” he said. “The Navy needs it.”

via Analyst questions Northrop Grumman’s role as shipbuilder.

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Rear Adm. Bill Landay, the Navy’s Program Executive Officer for Ships, said figuring the prices for the ships is a convoluted process because some of the materials used for the ships were purchased under earlier ship contracts that were then canceled.

Price has become a major factor in the LCS program, which aims to buy a total of 55 small, fast and modular warships. Two companies, Lockheed Martin and General Dynamics, are offering competing designs, and in 2010 the Navy plans to choose one of the designs as the basis for the class.

Each company has produced one ship so far. The first Lockheed ship, the Freedom (LCS 1), was commissioned in November. Landay said he hopes GD’s first ship, the Independence (LCS 2), is delivered before the end of this year.

Last spring, each company received an order to build a second ship the Fort Worth (LCS 3) from Lockheed, and the Coronado (LCS 4) from GD. But the prices for those ships were kept secret a restriction, Navy officials said, laid on by Pentagon rules governing the acquisition of ships from competing sources.

But on Sept. 17 the Navy dropped its plan to put both designs into production and announced it would choose only one design. That, Landay acknowledged, means the prices for ships 3 and 4 no longer need be kept secret.

A cheap price was one of the major attributes of the LCS program when the first construction contracts were awarded in 2004. Then, each ship was to cost $220 million, a relatively low cost for a U.S. Navy surface warship. But each of the first two ships suffered severe cost growth due to a variety of factors. Documents submitted with the 2010 Navy budget request put the current price tag for the Freedom at $637 million, while the still-incomplete Independence is listed at $704 million.

The Navy has repeatedly stressed to its shipbuilders the need to keep a lid on costs. In 2007, after the service admitted costs had jumped on LCS 1, the Navy canceled the first LCS 3 and LCS 4 from each shipbuilder due to excessive cost growth. Congress imposed a cost cap of $460 million per ship beginning in 2010, and the Navy, while not divulging quotes received this summer from each shipbuilder for further ships, indicated neither company could meet that goal.

Landay, meeting with reporters at Naval Sea Systems Command’s (NAVSEA) headquarters in the Washington Navy Yard, stressed the Navy’s continuing efforts to keep the lid on cost growth in its ship construction programs. Nearly all the ships now under contract, he said, are being built under fixed-price contracts rather than cost-plus arrangements.

Soon, Landay said, the high-tech DDG 1000 destroyers will be the only new ships under cost-plus contracts. If a ship design is considered high risk, contains more technical challenges, or is the first of a new class, cost-plus agreements will continue to be used, but fixed-price, he said, will be the preferred scheme.

It’s not nirvana, Landay said, but it shows we are making good progress.

Landay also noted that over the past year, NAVSEA has added 67 new employees to the PEO Ships staff, making sure the offices are adequately manned. Improvements in waterfront presence have been made to on-site supervision in the shipyards, carried out by Supervisor of Shipbuilding (SupShips) offices.

Another key improvement, Landay said, was a revolving gate process, where different Navy officials and offices continually review programs under construction. The process has been extraordinarily useful to us, Landay said, allowing NAVSEA an avenue to go back to Navy leadership and say we should rethink this before proceeding any further.

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The vessel is a little more than 10 percent finished and is moving on schedule and on budget, according to officials from both companies. That comes a day after the Navy announced it would speed up making a decision on whether to go with the Lockheed Martin design or one from General Dynamics.

Both Marinette Marine Corp. and Lockheed are confident in their design and ability to produce the ships for the Navy on time and on budget, they said at a news conference Thursday afternoon.

The news conference came a day after the Navy said it will select either Lockheed Martin Corp. or General Dynamics Corp., but not both, to build a fleet of small, speedy Littoral Combat Ships.

“It’s an opportunity and a risk at the same time,” said Joe North, Lockheed Martin’s director of the LCS program. “Our challenge and our goal is to go win it. It was always a tenet of the program that they would select one potentially and it’s just been accelerated.”

Marinette Marine Corp. is in the process of building another LCS (LCS-3), the Fort Worth, after delivering the Marinette-built LCS-1, USS Freedom, to the Navy late last year.

The Fort Worth is scheduled for delivery to the U.S. Navy in 2012.

Richard McCreary, Marinette Marine Corp’s president and chief executive officer, said the yard has already built and delivered one vessel to the Navy and the other is moving along smoothly. He said they have taken lessons from the construction of LCS-1 and applied them to LCS-3 to lower costs and streamline the construction process.

“We know exactly … what we are building and have a very good sense of cost,” he said. “We feel very confident that we can be very aggressive on the program. The question is which ship better fits the Navy’s mission.”

The LCS is made up of 44 modular assemblies that eventually form the ship. Crews at Marinette just finished installing a pair of gas-turbine engines in an assembled section of the hull this week. The work is hailed as one of the milestones of the construction process.

Marinette Marine could see as many as 24 or 25 ships built at its facility if the contract is approved. The total impact of the Navy’s decision this week including where the ships would be built isn’t yet clear and won’t be for several months while company officials await a new government request for proposal.

McCreary said the economic impact of each ship is about $450 million to the area, according to a survey they commissioned with Lockheed to catch the eye of area legislators.

Each ship adds about 1,500 jobs over the three years it takes to build and could raise employment at Marinette Marine to as high as 2,200 to 2,500 from the current figure of about 1,000, he said.

“Each one… has a major effect in the community,” McCreary said. “When we start talking about multiple ships, that’s huge.”

As part of its new strategy, Navy acquisition chief Sean Stackley and Vice Admiral Barry McCullough said, only one defense contractor will be picked in fiscal 2010, not two as initially planned, due to rising costs.

Lockheed Martin, based in Bethesda, MD, and General Dynamics, based in Falls Church, VA, have been building separate and very different models of the ships.

The Navy said it canceled its previous competition to buy three ships in fiscal 2010 due to affordability concerns. In total, the Navy wants a fleet of 55. The program is also subject to a cost cap of $460 million on each new ship, starting in the new fiscal year.

Source: Marinette Marine Positioned for Large Navy Contract

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MATV | Oshkosh Defense Awarded Additional MATVs (click for larger image/slideshow)

This is the third award under the delivery order first awarded in June 2009. To date, TACOM LCMC has ordered a total of 4,296 MATVs from Oshkosh. The aggregate amount of the three awards is valued at $2.3 billion.

“Oshkosh is committed to meeting our customer’s urgent need for this highly mobile vehicle and helping our Armed Forces serving in Afghanistan to better operate on the country’s challenging terrain,” said Robert G. Bohn, Oshkosh Corporation chairman and chief executive officer. “We have delivered more than 100 MATVs through August, meeting our planned delivery requirements, and we continue to increase vehicle output at our manufacturing facilities to remain on schedule and meet our customer’s requirements.”

Oshkosh expects to meet the government’s accelerated delivery schedule without impacting other programs, with production ramping up to 1,000 vehicles a month in December, and continuing at that level through the end of March 2010. The company is leveraging its pre-contract MATV production and engineering efforts, robust manufacturing capabilities, a highly skilled workforce, and decades of experience in producing more than 67,000 military-class vehicles.

The Oshkosh MATV’s superior mobility, which includes a 70 percent off-road profile capability, is achieved through the incorporation of the Oshkosh TAK-4® independent suspension system. The system is featured on more than 10,000 Medium Tactical Vehicle Replacements (MTVR) used by the U.S. Marine Corps and Navy Seabees, and is being retrofitted on more than 2,000 legacy MRAPs for improved mobility in Afghanistan. The TAK-4 system, which has undergone more than 400,000 miles of government testing, also is used on the Army’s next-generation Palletized Load System (PLS) and the Marine Corps’ Logistics Vehicle System Replacement (LVSR).

Oshkosh Defense teamed with Plasan North America to provide an advanced armor solution for the M-ATV. Plasan also developed the armor system used on more than 5,000 legacy MRAPs and thousands of Oshkosh Armored Cab MTVRs already in theater.

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“The Freedom class LCS is the most affordable surface combatant in the current shipbuilding plan in the last four decades – only six years from concept to the fleet, half the time,” said Dan Schultz, vice president and general manager of Lockheed Martin’s Integrated Defense Technologies business.

“The Lockheed Martin team is committed to the U.S. Navy’s LCS program and we are ready to begin work on the next ship. LCS fills a critical need in the Navy’s vision for building its transformational fleet and we are pleased to continue our partnership with the Navy on this revolutionary program.”

The nation’s first LCS, USS Freedom, was also built at Marinette Marine. USS Freedom was commissioned by the Navy on November 8, 2008, following successful sea trials in August and delivery in September.

“I am very proud of the Lockheed Martin team’s delivery of USS Freedom to the Navy and LCS 1′s performance since delivery,” added Schultz.

“This ship provides unmatched capability expanding the dominance of the U.S. fleet now and in the years to come.”

The Lockheed Martin team design for LCS is a survivable, semi-planing steel monohull that provides outstanding maneuverability with proven sea-keeping characteristics and innovative design features to support launch and recovery operations of manned and unmanned vehicles.

Reaching speeds well over 40 knots, the ship is a networked surface combatant with operational flexibility to execute focused missions such as mine warfare, anti-submarine warfare, surface warfare and the potential for a wide range of additional missions, including maritime interdiction and humanitarian/disaster relief.

The Lockheed Martin-led team includes naval architect Gibbs and Cox, ship builders Marinette Marine and Bollinger Shipyards, as well as best-of-industry domestic and international teammates to provide a flexible, low-risk warfighting solution.

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The order was placed with Lockheed Martin Corp., the lead contractor in a team that is seeking to supply the new littoral combat ships to the Navy. Littoral combat ships (LCS) are networked, agile, and high-speed surface warships with capabilities optimized for shallow-water missions.

The award was announced by U.S. Congressmen Bart Stupak (D-Menominee, Mich.) and Steve Kagen (D-Appleton). A dollar value for the contract will not disclosed by the Navy, but Congress has approved $1.02 billion for the Navy to purchase two littoral combat ships for fiscal year 2009.

Marinette Marine operates the shipyard where a team of contractors, led by Lockheed Martin, had built the USS Freedom, the lead littoral combat ship constructed for the competitive contract. A second LCS — the USS Independence — was ordered from a team led by General Dynamics. The new ship to be built in Marinette — the USS Fort Worth — will be the third LCS overall.

The award of the LCS-3 contract is a huge economic boost not just to Marinette Marine and the surrounding communities, but also to the 40 companies across Northern Michigan who provide parts and services for the project, Stupak said in a statement. This contract will help sustain the local workforce and will further strengthen Marinette Marine’s position as an integral part of the LCS program, hopefully leading to more contracts and more jobs down the road.

Marinette Marine warned in January that 200 workers may have to be laid off in March, pending issuance of the LCS contract, but a Navy contract awarded in early March for acquisition of materials for the construction of another LCS preserved those jobs.

Source: Navy Orders Second Littoral Combat Ship from Marinette Marine

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Aerospace and defense giant Lockheed Martin, (NYSE:LMT) has agreed to be a minority investor in the proposed acquisition.

Manitowoc Marine Group is a full-service shipbuilding, ship repair, and ship conversion organization that operates facilities in Sturgeon Bay, WI, Marinette, WI, and Cleveland, OH.

Serving a broad base of commercial, military, and government customers that operate vessels both on and off the Great Lakes, MMG employs a workforce of 1,587 at its Bay ship building, Marinette Marine, and Cleveland ship repair operations.

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