U.S. Navy signs contract or Littoral ships

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WASHINGTON, Dec. 31 (UPI) -- The U.S. Navy has announced a contract for the design and construction of 20 coastal warships for a combined total of more than $7 billion.

According to a U.S. Navy statement, the awarded parties, Lockheed Martin and Australia's Austal operation in the United States, will each build 10 littoral war ships.

Each side will begin construction in 2011.

Lockheed, which has headquarters in Bethesda, Md., has separately signed a $491.6 million deal to construct one ship in its first task. It will work with Marinette Marine Corp. to build the ship at its Marinette, Wis., plant. The contract alone will see the plant grow from its current roster of 800 workers to more than double within the next five years.

Austal received a $465.5 million deal for one ship, although the design is slightly different. In light of the project, the company said earlier this year that it was planning to double the size of its shipyard in Mobile, Ala., adding nearly 2,000 jobs.

"The deal provides for stability and continuity of employment for many years," Austal Chief Operating Officer Joe Rella told Fox News.

Under the agreement, nine additional warships will be designed and constructed by the end of 2015, requiring, though, yearly congressional approvals and appropriations according to the Navy's Littoral Combat Ship Program requirement.

Navy officials say the ships provide a new breed of vessels that are fast, modular and designed to deploy manned and unmanned vehicles to execute combat missions. It is understood that the ships will be performing Special Operations Forces support, high-speed transit, maritime interdiction, intelligence, surveillance and anti-terrorism force protection.

"The Lockheed Martin team's Littoral Combat Ship is designed to confront rapidly changing global threats while providing a cost-effective solution in an era of tight budgets," Lockheed Martin Chairman and Chief Executive Officer Bob Stevens said in a news release. "This team's strong performance will enable the Navy to deploy a class of affordable, multi-mission combatants to address the nation's needs for decades to come."

Experts anticipate the Navy to build as many as 55 Littoral-type ships within 25-30 years. Still, program delays could lead the Navy to build fewer ships or slow the production rate.

U.S. Secretary of the Navy Ray Mabus told The Sydney Morning Herald that the contracts represented a "unique and valuable opportunity to lock in the benefits of competition and provide needed ships to our fleet in a timely and extraordinarily cost effective manner."