The US Department of Defense has awarded Austal USA with an additional ongoing maintenance and sustainment support contract for the US Navy’s Independence Class Littoral Combat Ships (LCS).
Austal will be the prime contractor for undertaking a dry docking of LCS 14 to carry out various support and sustainment activities. This award is particularly significant as it is the first time that Austal USA has acted as a prime contractor on LCS for work of this nature and points to further expansion of the support business in the US.
The Austal support business has grown at a compound annual growth rate of circa 30 per cent over the last few years, reaching a revenue level of circa $200 million in the last financial year. It is a key strategic aim of Austal to maintain this growth momentum and thereby to deliver a stable long-term income to underpin the shipbuilding business.
Austal CEO David Singleton said, "We have committed to the market that Austal will deliver a substantial and sustainable support business that over the next few years will become a material part of the groups earnings. Whilst in themselves these contracts are relatively small they can form the basis of continued and stable expansion of the support business."
Austal has delivered nine LCS vessels with a further 10 vessels on order, all of which will undergo regular maintenance and dry docking activities to maintain fleet availability during the life of the class. In the last two years, Austal has established a significant LCS support capability in San Diego where the vessels are home based. This capability is in addition to the support resources based at the shipyard in Mobile, Alabama.
Austal also has other service centres around the world. The award has been made against a previously awarded basic ordering agreement (BOA) to complete the post shakedown availability (PSA) execution for the Austal designed and built Littoral Combat Ship USS Manchester (LCS 14).
The order provides for work to be performed for the correction of government responsible trial card deficiencies, new work identified between custody transfer and the time of PSA, and incorporation of approved engineering changes that were not incorporated during the construction period, which are not otherwise in the building yard’s responsibility under the ship construction contract.
"The management team in the USA are to be congratulated at achieving this latest milestone," Singleton added.
The Austal Independence Class LCS program supports industry throughout the US. The program supports thousands of jobs directly at Austal’s facilities in Mobile, Alabama and indirectly through the contributions of the supply chain of over 900 local suppliers in 41 states. The LCS is a 127-metre, frigate sized vessel, built at Austal facilities in Mobile.
The program is in a full rate of production with several ships under construction simultaneously. The future USS Cincinnati (LCS 20) is in the process of completing sea trials and the future USS Kansas City (LCS 22) is preparing for trials. Final assembly is well underway for the future USS Oakland (LCS 24) and USS Mobile (LCS 26) and modules are under construction for LCS 28 in Austal USA’s module manufacturing facility. Construction on the future USS Canberra (LCS 30) is scheduled to begin in late January.
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Austal USA also recently received orders for two more Independence Class vessels (LCS 36 and 38), making a total of four Austal LCS ordered by the US Navy in 2018.