On Friday, General Dynamics (NYSE:GD) confirmed that its Electric Boat subsidiary has been awarded three contracts from the Department of Defense, totaling $4.6 billion in value, to design a new nuclear-powered ballistic missile submarine for the Navy and also continue work on five new Virginia-class fast attack submarines.
The first contract commissions research and development work from Electric Boat into the design of a new ballistic missile submarine to replace the Ohio-class. Construction is slated to begin in 2021. In addition, Electric Boat will continue work on development of a common missile compartment to be used on the existing Ohio-class boats, and also on the British Royal Navy's Successor-class subs. The total value of this contract is $2 billion.
The second contract, for $2.5 billion, funds construction work on two Virginia-class attack subs, the USS South Dakota and USS Delaware, on whose construction Electric Boat is collaborating with Huntington Ingalls (NYSE:HII) subsidiary Newport News Shipbuilding.
The third contract announced, for $308 million, funds the purchase of "long lead-time materials" needed to be procured for the eventual construction of three additional Virginia-class subs.
General Dynamics shares sank 0.6% after the news, closing at $71.07 Friday.
Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics and Huntington Ingalls Industries. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.