Huntington Ingalls Inc. (NYSE:HII) has been awarded a $44.1 million contract modification by the U.S. Department of War to support additional work on the USS John C. Stennis aircraft carrier refueling overhaul.
The modification is structured as a cost-plus-incentive-fee change to contract N00024-21-C-2106. It covers supplemental work associated with the CVN 74 Refueling Complex Overhaul and carries a special incentive tied to schedule performance. Company personnel will carry out the work at Huntington Ingalls' Newport News Shipbuilding facility in Newport News, Virginia.
The Navy anticipates that the augmented work will be finished by October 2026. The Naval Sea Systems Command in Washington, D.C., is identified as the contracting activity responsible for the project.
At the time of award, the Department of War will obligate $15 million in fiscal 2026 shipbuilding and conversion funds to the contract modification. Those obligated funds are set to expire at the end of the current fiscal year.
Huntington Ingalls operates Newport News Shipbuilding, noted in the contract notice as one of two shipyards in the United States with the capability to build nuclear-powered aircraft carriers. The awarded modification augments an existing contract and introduces a schedule-based incentive intended to influence timing and delivery of supplemental overhaul tasks.
Summary
This contract modification adds $44.1 million in funding to an existing CVN 74 Refueling Complex Overhaul contract, introduces a schedule performance incentive, and obligates $15 million in fiscal 2026 shipbuilding and conversion funds that will expire at the end of the current fiscal year. The work is to be performed at Newport News Shipbuilding and is expected to conclude by October 2026.
Key points
- Huntington Ingalls received a $44.1 million cost-plus-incentive-fee modification for supplemental work on the USS John C. Stennis refueling overhaul.
- The modification includes a special incentive for schedule performance and will be executed at Newport News Shipbuilding in Virginia.
- The Department of War will obligate $15 million in fiscal 2026 shipbuilding and conversion funds at award; those funds will expire at the end of the current fiscal year.
Risks and uncertainties
- Timing risk: Completion is targeted for October 2026, and meeting that date may be affected by factors not described in the contract notice.
- Funding expiration: The $15 million in fiscal 2026 shipbuilding and conversion funds obligated at award will expire at the end of the current fiscal year, creating a finite window for use of those funds.
- Schedule incentive dependency: The modification’s special incentive for schedule performance ties part of contractor compensation to timing, which may affect project delivery dynamics.
Sectors affected
- Defense and shipbuilding: Direct impact through Navy procurement and carrier overhaul work.
- Industrial contractors and suppliers: Indirect implications for firms providing goods and services to the Newport News Shipbuilding facility.
- Public finance and federal contracting: Use and expiration of allocated shipbuilding and conversion funds relate to budget execution.