HII: Unmanned contract awards delayed until next year

By Audrey Decker  / November 4, 2021

Contract awards for "critical" unmanned programs will likely be delayed until next year, according to a senior Huntington Ingalls Industries executive.

"Delays in contract awards in our unmanned business for critical new programs remains a watch item. We are expecting this to be resolved by the end of this year, but it appears that these awards are not likely until early to mid-2022," said HII Chief Operating Officer Chris Kastner during the company's earnings call today.

Two programs HII builds for the Navy, the Medium Unmanned Undersea Vehicle and the Large Displacement UUV, were funded in the fiscal year 2021 budget but their contract awards have been pushed into FY-22.

While the company anticipates contract awards for their unmanned programs, HII continues to focus on its destroyer business.

Mike Petters, HII president and chief executive officer, said the company hopes that the Navy will continue to procure Arleigh Burke Flight III destroyers until the timeline of the next destroyer class DDG(X) is ready.

According to a Congressional Research Service report released in September, the Navy wants to procure its first DDG(X) in FY-28.

"We will certainly advocate and believe that the best-proven course ahead will be to continue to build Flight IIIs until that the design is mature and ready to go into production on that," Petters said today during the earnings call.

"I think it would be a mistake for there to be any sort of curtailment in the destroyer program, anticipating some kind of maturation path," Petters said.

Navy Secretary Carlos Del Toro said today the service will pursue a multiyear destroyer procurement to support a stable workforce at both HII and Bath Iron Works.

The Navy requested just one DDG-51 destroyer in its FY-22 budget request, but listed a second destroyer as its top unfunded priority.

"We are pleased that the four defense oversight committees show strong support for shipbuilding. To include, adding a second Arleigh Burke class destroyer, which is a top Navy priority for fiscal year 2022. The appropriations bills also include language and support of a DDG-51 follow-on multiyear procurement contract in FY-23," Petters said.

HII has completed acceptance trials for the guided-missile destroyer Frank E. Petersen Jr. (DDG-121) and expects to deliver the ship to the Navy by the end of this year, Kastner said.

In addition, DDG-123 and DDG-125 remain on track to complete sea trials next year, he added.

Kastner remained confident with the company's "handshake agreement" to buy three LPD-class amphibious transport docks and one LHA-class helicopter assault vessel.

"We still believe that a bundled acquisition of these critically important ships is the most cost-effective method of procurement and are pleased that the Navy and Congress have protected the ship schedules with a contract for long-lead materials on LHA-9, coupled with continued support for LPD-23 and 33," Kastner said.