White House Seeks an Additional $2B for FY24 Virginia-Class Attack Subs

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Rendering of Block V Virginia-class submarine with Virginia Payload Module. General Dynamics Electric Boat Image

The White House is asking Congress for $1.95 billion to make up for a price gap for two submarines already funded as part of the congressional Fiscal Year 2024 budget, USNI News has learned.
The request was included in a list of anomalies the White House asked Congress to support in the event the government is funded by a continuing resolution past the end of the fiscal year on Sept. 30.

“Language is needed to appropriate $1.95 billion to the Shipbuilding and Conversion, Navy account of the Department of Defense (DOD) for expenses necessary for procurement of two Virginia-class submarines. Without the anomaly, DOD would have insufficient funding to sign contracts for the submarines during the period of the CR,” reads the notification, first reported by Politico.

The Fiscal Year 2024 defense funding bill set aside $7.13 billion for the two Block V Virginia-class boats. Including FY 2023 advanced procurement funds, the total appropriated by Congress for the two attack submarines – SSN-812 and SSN 813 – is $9.4 billion, according to the program summary. The additional add from the White House, if approved by Congress, would bring the total for the two boats to $11.35 billion. One of the two boats is a specialized special operations forces and seabed warfare and was projected to cost much more than a standard Block V Virginia boat, USNI News previously reported.

Two sources familiar with the ongoing negotiations between the Navy and General Dynamics Electric Boat told USNI News the service’s initial Fiscal Year 2024 budget request for the two attack submarines was based on older cost estimates that did not consider post-pandemic inflation. The two submarines were added as unpriced options that were not part of the more favorable 2019 multiyear deal pricing for Block V attack boats, USNI News understands.

Advanced procurement for the two boats was delayed by more than a year due to a separate dispute between the Navy and EB over who would shoulder the risk if a missile detonated aboard while the boats were under construction or repair. The issue was settled in early 2023 and the Navy issued a long-lead contract for the two boats in May 2023.

When the shipyard and the service began negotiating the option over the last several months, the Navy found its projected costs for the boats were significantly short, the two sources confirmed to USNI News.

A spokesman for General Dynamics declined to comment on the White House budget request or the ongoing negotiations. A Navy spokesperson referred USNI News to the Office of the Secretary of Defense. The OSD spokesperson acknowledged a request for comment from USNI News but did not immediately provide a statement.

Hints of the cost differential were included as part of the Senate Fiscal Year 2025 defense appropriations bill that called for an “emergency” injection of $1 billion into the Fiscal Year 2024 Virginia boats, USNI News previously reported.

The ballooning cost for the last Block V boat and the specialized seabed warfare boat comes ahead of an anticipated multi-year contract for the Block VI Virginia attack boats and pricing that will have to take into account the post-pandemic inflation pricing.

The Block VIs are the second set of Virginia-class attack boats that will include the Virginia Payload Module. The Navy awarded EB a $1.3 billion long-lead contract for the first Block VI boat last month, USNI News reporte d.