The US Government’s Department of Defense (DoD), in support of the US Navy shipbuilding industrial base, has announced a $50mn defense production act (DPA) title III agreement with Austal USA.
Subject to the agreement, Austal intends to use the resources to invest in developing additional capacity for steel naval vessel construction at its Mobile, Alabama, shipyard. The move will improve the Australian company’s ability to build steel-hulled warships for the US Navy.
The DPA agreement will boost domestic production through capital projects over the next two years, beginning this month. The shipbuilder didn’t provide additional details about the scope of the agreement because of ongoing discussions with the DoD, however, it is slated to do so in the coming months.
Austal said the agreement with the DoD was a function of the US’s response to COVID-19; it’s intended to increase, maintain, and protect essential domestic shipbuilding and maintenance capacity.
The company is prepared to match the DPA’s agreement provision with $50mn of its own money in a bid to increase steel construction in Mobile, which is projected to deliver long-term boons for US Navy shipbuilding, as well as furthering recovery work since the pandemic.
Austal presently has six littoral combat ships under construction, adding to the 11 it has previously delivered to the US Navy, with two additional pending construction. The company has also supplied 11 expeditionary fast transports, with two currently under construction.