The Navy has selected two contracting firms to manufacture 55 vessels for its $37.4 billion Littoral Combat Ships program, Federal News Radio reports.
The program has placed Lockheed Martin Corp. and the Australia-based firm Austal in a head-to-head competition to see who can produce the highest quality vessels at a lower cost.
Both companies won potential six-year Navy contracts to produce the small combat ships for use along shallow coastlines and open seas.
Lockheed’s contract totals around $4.1 billion and Austal’s contracts total $3.8 billion.
Kevin Brancato, a defense analyst with Bloomberg Government, told Federal News Radio the Navy’s new contract approach is ideal for requests similar to the LCS because many contracting firms possess the ability to design and manufacture smaller ships, arms, or equipment.
Brancato said the Navy would have less success when procuring larger ships and equipment like destroyers, aircraft carriers and submarines because only a few contractors have the resources to produce and manufacture them.