Pentagon Accelerates Funding of General Dynamics Submarines

On Friday, the U.S. Department of Defense announced it has awarded General Dynamics' (NYSE: GD  ) Electric Boat Corp. subsidiary a $208.6 million "undefinitized" contract modification to a previously awarded contract. The funds are to be used to purchase long-lead-time materials needed for construction of three Virginia-class nuclear fast attack submarines:

  • SSN 793, the second attack sub to be procured in 2014, and a sub that was previously scheduled for procurement no sooner than 2015.
  • SSN 794 and SSN 795, now both scheduled for procurement in 2015.

Note that the procurement years stated refer to when Congress will officially procure money to pay for the subs, and not the years they will enter service.

Purchasing of the materials in question is expected to be complete by December 2013, but dates for the actual construction of the submarines have not yet been established.

Shares of General Dynamics closed at $78.33, down 0.4% in Friday trading, ahead of this contract's announcement.


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