Morning Briefing - February 11, 2019
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February 11, 2019

BWXT Says $2.1B in Naval Reactor Contracts Coming

By ExchangeMonitor

BWX Technologies expects to finalize some $2 billion in nuclear naval nuclear propulsion contracts in the first quarter of 2019, the Lynchburg, Va., company announced Monday before financial markets opened.

BWX Technologies’ Nuclear Operations Group and Nuclear Fuel Services “reached price agreements” on Naval Nuclear Propulsion Program contracts worth a combined $2.1 billion, with options, according to a press release. The Nuclear Operations Group award is for nuclear reactor components, while the other award is for nuclear fuel. The company did not quantify the value and performance periods for the contracts’ base and option years.

Most of the $2.1 billion in contract awards are expected in the current quarter, with the remaining anticipated in 2020.

The reactor work will support the U.S. Navy’s Virginia-class attack submarines and future Columbia-class ballistic-missile submarines, BWX Technologies wrote. Congress approved and funded procurement of two more Virginia-class subs in the 2019 fiscal year that ends Sept. 30. The Navy has ordered the vessels, which General Dynamics Electric Boat and Huntington Ingalls Industries now build together, since 1998. The Navy had 13 Virginia-class subs as of 2017.

Construction on the first of 12 planned Columbia-class submarines, to be built by General Dynamics Electric Boat alone, is slated to start in 2021, according to the Navy. The vessel would go into service in 2031, the Navy has said.

The Nuclear Operations Group’s reactor components award is worth an estimated $1.7 billion, with options, according to BWXT. The Nuclear Operations Group will perform the work mostly in: Lynchburg, Va; Barberton and Euclid, Ohio; and Mount Vernon, Ind. 

Work under the fuel contracts makes up the balance of the anticipated award, and includes: production and delivery of fuel for naval reactors; and development work for future naval reactors programs. That work will based at Nuclear Fuel Services in Erwin, Tenn., BWXT said.

BWX Technologies has a virtual monopoly on nuclear reactors for Navy vessels. The company had yet to release its annual earnings report for 2019, at deadline Monday for Weapons Complex Morning Briefing. The Navy and the Department of Energy’s National Nuclear Security Administration jointly run the nuclear naval reactors program.