General Dynamics Electric Boat awarded a $987 million contract modification for long lead time material and construction costs for submarine production

Rhea-AI Summary

General Dynamics Electric Boat (NYSE: GD) has secured a $987 million contract modification for submarine production support. The modification covers Component Development, Class Lead Yard Support, and Submarine Industrial Base supplier development enhancements. The work will be distributed across three locations: 70% in Groton, Connecticut, 15% in Newport News, Virginia, and 15% in Quonset Point, Rhode Island, with completion expected by 2031. The contract aims to accelerate submarine delivery and enhance shipyard output. General Dynamics Electric Boat, which employs over 24,000 people, specializes in designing, building, repairing, and modernizing nuclear submarines for the U.S. Navy. The parent company, General Dynamics, is a global aerospace and defense corporation that generated $47.7 billion in revenue in 2024 and employs more than 110,000 people worldwide.

Positive

• Secured substantial $987 million contract modification for submarine production
• Strong government support from Navy, Congress, and administration for submarine program
• Diverse work distribution across three strategic locations
• Contract supports acceleration of submarine delivery capabilities

Negative

• Long project timeline extending to 2031 may expose to execution risks
• Heavy dependence on government contracts and funding

Insights

Defense Industry Analyst

GD's $987M contract modification strengthens submarine production capacity and accelerates delivery timeline through 2031.

This $987 million contract modification awarded to General Dynamics Electric Boat represents a substantial financial commitment that will directly support the company's submarine production capabilities. The funding specifically targets three critical areas: Component Development, Class Lead Yard Support (CLYS), and Submarine Industrial Base (SIB) supplier development enhancements.

The contract modification builds upon previously awarded work, demonstrating continued confidence from the U.S. Navy in Electric Boat's submarine production expertise. The explicit mention of accelerating submarine delivery by company president Mark Rayha indicates this funding addresses production timeline priorities for the Navy.

Particularly noteworthy is the focus on supplier development enhancements. This element reflects recognition of supply chain challenges within the submarine industrial base and represents a strategic investment in resolving potential production bottlenecks. These improvements are essential for achieving the stated goal of increased output.

The work distribution across three locations - Groton (70%), Newport News (15%), and Quonset Point (15%) - showcases the complex industrial footprint required for modern submarine production. The contract's extended timeline through 2031 provides significant revenue visibility and production stability for General Dynamics over the next six years.

In context of General Dynamics' overall operations, this contract helps sustain work for a portion of Electric Boat's 24,000 employees. While the $987 million figure represents approximately 2% of GD's 2024 annual revenue of $47.7 billion, the strategic importance of maintaining submarine production capabilities extends beyond the immediate financial impact, reinforcing the company's position as a critical naval defense contractor.

GROTON, Conn., June 18, 2025 /PRNewswire/ -- General Dynamics Electric Boat, a business unit of General Dynamics (NYSE: GD), announced today it has been awarded a $987 million contract modification to a previously awarded contract supporting submarine production. This modification is for additional Component Development, Class Lead Yard Support (CLYS), and Submarine Industrial Base (SIB) supplier development enhancements, as detailed in the U.S. Department of Defense contract award.

"This contract modification funds important shipyard and supply chain work essential to achieving the necessary growth in output and supports our efforts to accelerate submarine delivery," said Mark Rayha, president of General Dynamics Electric Boat. "The ongoing support for the shipyards and our supply base from the Navy, Congress and the administration is appreciated and necessary for us to meet the Navy's current and future demand for submarines."

Work will be performed in Groton, Connecticut (70%); Newport News, Virginia (15%); and Quonset Point, Rhode Island (15%) and is expected to be completed by 2031.

General Dynamics Electric Boat designs, builds, repairs and modernizes nuclear submarines for the U.S. Navy. Headquartered in Groton, Connecticut, it employs more than 24,000 people. More information about General Dynamics Electric Boat is available at www.gdeb.com.

Headquartered in Reston, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services. General Dynamics employs more than 110,000 people worldwide and generated $47.7 billion in revenue in 2024. More information is available at www.gd.com.

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SOURCE General Dynamics

FAQ

What is the value of General Dynamics' (GD) new submarine contract modification?

General Dynamics Electric Boat received a $987 million contract modification for submarine production support and development.

Where will the work for GD's submarine contract be performed?

The work will be performed in three locations: 70% in Groton, Connecticut; 15% in Newport News, Virginia; and 15% in Quonset Point, Rhode Island.

When is the completion date for General Dynamics' submarine contract work?

The contract work is expected to be completed by 2031.

How many employees does General Dynamics Electric Boat have?

General Dynamics Electric Boat employs more than 24,000 people.

What was General Dynamics' revenue in 2024?

General Dynamics generated $47.7 billion in revenue in 2024.