CAPE: Block V Virginia deal will save $1.8B

By Justin Katz / November 7, 2019 at 8:49 AM

The Pentagon's independent cost assessment office says the Navy will save $1.8 billion using a multiyear procurement contract to buy Block V Virginia-class submarines from General Dynamics Electric Boat, according to documents viewed by Inside Defense.

The cost savings estimate was sent to lawmakers Oct. 30 by Pentagon officials. It was sent with other documents that provided Congress the statutory 30-day notification prior to awarding the multibillion-dollar contract.

The dollar figure was first reported by Bloomberg.

The Navy has not awarded the Block V contract yet and in an email to Inside Defense a service spokesman declined to elaborate on the deal but said the contract will be awarded by the end of this calendar year.

The determination "was made following completion of a cost analysis conducted by the director [of] cost assessment and program evaluation . . . and the CAPE estimate of 6.8% MYP savings ($1.8 billion) supports the determination," Pentagon acquisition chief Ellen Lord wrote in the documents provided to lawmakers.

Independent offices like CAPE provide third-party assessments of the Pentagon's budgetary and programmatic projections. Navy acquisition executive Hondo Geurts and Naval Sea Systems Command chief Vice Adm. Thomas Moore also sent letters to Congress in which they repeat CAPE's figures but do not offer a separate Navy estimate.

While the Navy has not announced the contents of its deal with Electric Boat, lawmakers earlier this week confirmed the contract includes nine submarines with an option for a tenth vessel.