Fincantieri Marinette Marine wins $795M contract for Navy frigate program

Fincantieri FFG(X) Design based on the FREMM. (Fincantieri Image)
Fincantieri FFG(X) Design based on the FREMM. (Fincantieri Image)(WLUC)
Published: Apr. 30, 2020 at 5:59 PM EDT
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The Navy awarded a $795-million contract to Fincantieri to begin building a new class of guided-missile frigates, in the first new major shipbuilding program the service has started in more than a decade, the Navy announced Thursday.

Fincantieri beat out what was originally four other competitors, who were asked by the Navy to take a mature parent design and evolve it to meet the Navy’s needs for potential high-end warfare. Fincantieri, which will build its frigate at its Marinette Marine shipyard in Wisconsin, based its FFG(X) design on the FREMM multi-mission frigate already operated by the French and Italian navies.

The detail design and construction contract covers one ship in the current Fiscal Year 2020 and options for as many as nine more ships, for a total value of $5.58 billion if all options are exercised.

“The Navy’s Guided-Missile Frigate (FFG(X)) will be an important part of our future fleet,” Chief of Naval Operations, Adm. Mike Gilday said in a Navy statement. “FFG(X) is the evolution of the Navy’s Small Surface Combatant with increased lethality, survivability, and improved capability to support the National Defense Strategy across the full range of military operations. It will no doubt help us conduct distributed maritime operations more effectively, and improve our ability to fight both in contested blue-water and littoral environments.”

“I am very proud of the hard work from the requirements, acquisition, and shipbuilder teams that participated in the full and open competition, enabling the Navy to make this important decision today,” James Geurts, assistant secretary of the Navy for research, development and acquisition, said in the statement. “Throughout this process, the government team and our industry partners have all executed with a sense of urgency and discipline, delivering this contract award three months ahead of schedule. The team’s intense focus on cost, acquisition, and technical rigor, enabled the government to deliver the best value for our taxpayers as we deliver a highly capable next generation frigate to our warfighters.”

The Navy has spoken about its frigate program as the model of how it would like to approach ship acquisition in the future. By bringing together a FFG Requirements Evaluation Team (RET) that included the acquisition community, resource sponsors, the budget community, fleet representatives, technologists in and out of government and both shipbuilders and others in industry, the Navy was able to figure out early on how it might balance capability with cost. The service has said this approach shaved six years off the program, compared to what it might have looked like under more traditional approaches.

Navy leadership in 2017 determined that a new frigate program was needed beyond what could be modified on the Littoral Combat Ship program, which had been the sole small combatant in future fleet plans. The frigate would be more lethal and survivable than an LCS, they said, and the service stood up the FFG RET. Based on the RET’s work, the service approved top-level requirements in October 2017 and kicked off a conceptual design phase that spanned 16 months and included five industry teams. With confidence that industry would be able to meet the requirements, the Navy then validated its capability development document in February 2019, and the request for proposals for the detail design and construction contract was released in June.

The Navy also sped up the process and reduced risk to the program by relying heavily on government-furnished equipment, ensuring the frigate would use existing systems already fielded on other surface combatants in the fleet. These systems include an Enterprise Air Surveillance Radar (EASR), Baseline 10 Aegis Combat System, Mk 41 Vertical Launch System, and other communications and defensive systems with hot production lines and proven performance in the fleet. This not only speeds up the frigate design and construction effort but also has benefits for the cost of procuring these as GFE, maintaining a common inventory of spare parts and training sailors to operate the same system across multiple ship classes.

Going forward, the detail design phase will begin immediately, and construction will begin no later than April 2022. The first ship of the class – still yet to be named, despite an effort by outgoing Acting Secretary of the Navy Thomas Modly to name the frigates the Agility class – will deliver by April 2026 and reach initial operational capability by September 2030. The lead ship will cost $1.281 billion, with $795 million of that covering the shipbuilder’s detail design and construction costs and the rest covering the GFE, including the combat systems, radar, launchers, command and control systems, decoys and more.

For the rest of the class, the total ship cost – contractor costs and GFE – has dropped. The Navy previously said it was aiming for an average cost of ships 2 through 20 of $800 million in constant year 2018 dollars, with a requirement to stay below $950 million in CY 2018 dollars. Now the service has the average follow-on cost pegged at $781 million.

In selecting between the four remaining competitors – Fincantieri and its FREMM design; Austal USA, which builds the Independence-class LCSs; General Dynamics Bath Iron Works and Navantia, who builds the F100-class frigates for the Spanish Navy; Huntington Ingalls Industries, who has not revealed details of its bid – the Navy was balancing cost with non-cost factors to get to a best value. Design and design maturity were weighted equal to performance and the ability of the ship to meet the Navy’s warfighting needs as outlined in the National Defense Strategy and other documents. Schedule, production approach and facilities were weighted lower, with data rights being the lowest-weighted non-cost factor. The Navy was not looking for a straight price shoot-out but instead wanted the companies to compete for the best capability for the best value. Lockheed Martin, who builds the Freedom-variant LCS at Fincantieri’s shipyard in Wisconsin, had been part of the group of five in the conceptual design phase but dropped out of the competition.