The U.S. Navy is moving forward with plans for a new class of nuclear submarines and has issued a five-year contract worth up to $1.99 billion to General Dynamics Corp. for research and development work. The value of the cost-plus, fixed-fee contract is based on numerous incentives and options.

The contract covers design costs for a new submarine and continuing design work for a new common missile compartment for nuclear submarines – a project begun by the Navy with Electric Boat in 2008.

The Navy indicated its plan is to purchase 12 new submarines to replace its Ohio Class ballistic submarines. Construction would begin in 2021.

A control study on the Ohio Class replacement vessel was started in 2007, though the Navy has not yet confirmed whether the new vessel will be based on the Ohio Class or Virginia Class design, or on an entirely new submarine design.

The delivery date for the new submarine model is projected to be 2029, so a vessel based on a new design would have to be initiated within two or three years to meet such a schedule.

Also, the Navy assigned separate contracts totaling $2.5 billion to General Dynamics’ Electric Boat subsidiary and Huntington Ingalls’ Newport News Shipbuilding unit to fund construction of two Virginia Class attack submarines. These would be the last two Virginia Class subs built under the terms of a multi-year contract that stipulates no more than two subs may be produced annually.