EMALS builder agrees to fixed-price deal

[unhappycamper]

A conceptual rendering of ($16.5 to $40 billion dollar) CVN 78, the first of a new generation carrier design for the Navy.



EMALS builder agrees to fixed-price deal
By Lance M. Bacon - Staff writer
Posted : Monday Jul 19, 2010 6:22:26 EDT

A defense contractor is laying its reputation — and potentially hundreds of millions of dollars — on the line as the Navy prepares a test of critical technologies integral to future aircraft carriers.

General Atomics on July 13 took the highly unusual step of signing a $676.2 million fixed-price contract for the production of advanced arresting gear and the electromagnetic aircraft launch system, or EMALS, for the Gerald R. Ford class of aircraft carriers.

“There had been some doubt whether we could provide this technology on time. This was our way of saying, ‘Yes we can,’” said General Atomics spokeswoman Nancy Hitchcox.

Essentially, the deal means General Atomics must cover the cost if either program falls behind schedule or goes over budget. Service officials told Navy Times that the launch testing is still on schedule for the fall.

Delays and cost overruns in the EMALS project have drawn much scrutiny in Congress. During a special hearing before the House Armed Services Committee’s seapower panel last year, Rep. Gene Taylor, D-Miss., said the program is “so essential to the carrier that if it does not work, the nation has paid billions of dollars for an unusable ship.”

[zipplewrath]

1. I'd love to see that contract

I wonder if the extracted anything for offering such a deal. My first thought has to do with more autonomy in executing the contract such that the government is severely restricted in their ability to make changes, even small ones, to the requirements, schedule, or quantity. I've seen smaller versions of fixed price contracts where if the government was late in any of their commitments, the contract value could soar.