Source: United States Senator for Maine Angus King
Watch Senator King’s remarks HERE, and download broadcast quality video HERE
WASHINGTON, D.C. – As Congress begins to shape the 2023 National Defense Authorization Act (NDAA), Senator Angus King (I-Maine), a member of the Senate Armed Services Committee, stressed the importance of multi-year defense contracts that will stabilize the long-term planning at Bath Iron Works (BIW) and Portsmouth Naval Shipyard (PNSY). In a hearing of the Senate Armed Services Committee, Senator King asked Ellen Lord – former Under Secretary of Defense for Acquisition and Sustainment – to explain the importance of multi-year agreements, how they save taxpayer money, and why they’re necessary for a strong national defense and communities across our country.
In the 2022 NDAA, King secured language urging long-term funding for destroyers beginning in fiscal year 2023 to support the shipbuilding industrial base and expansion of the Navy battle force to congressionally mandated levels.
Senator King has long championed multi-year procurement, and has repeatedly highlighted the necessity of these long-term contracts to Maine employers like BIW and PNSY.
“It seems to me that with the industrial base, one of the important things is not necessarily what the government buys but how it buys it. For example, multi-year procurement. Secretary Lord, I believe that multi-year procurement is something that we can do around here that would vastly support and encourage investment and maintain the industrial base,” said Senator King. “You used the term ‘lumpy.’ I love that term. If we do things in a lumpy way, industry can’t respond because you can’t turn these large facilities off and on.”
“That’s correct and in fact, if there’s a multi-year contract, it drives certainty. It allows the industry partner to put their internal research and development, as well as capital investments, into the area in which the government is buying. It allows employees to say that this is a good place to work because I know that the job will be here for at least 5 years, or whatever it might be with options. It also saves the government an enormous amount of money because the cost and time to renegotiate these contracts is non-trivial,” agreed Ms. Lord. “You want to get all the terms and conditions upfront and then have options there, but there’s going to be less and less inclination to do those multi-years if inflation is running rampant and no one knows how to predict it and industry can’t recoup losses they might have.”
“The industry isn’t going to make those investments that they need to make in the capital unless they have some ensured stream of income,” concluded Senator King.
As a member of the Senate Armed Services Committee and the Seapower Subcommittee, Senator King has long championed multi-year procurement, and has repeatedly highlighted the necessity of these long-term contracts to Maine employers like BIW and PNSY. In the 2022 NDAA, King secured language urging long-term funding for destroyers beginning in fiscal year 2023 to support the shipbuilding industrial base and expansion of the Navy battle force to congressionally mandated levels. In the 2022 NDAA, he also secured $3.7 billion for the procurement of 2 DDG-51 Arleigh Burke-class destroyers in fiscal year 2022, which Bath Iron Works (BIW) can compete to build and $125 million to fund long lead material for a third FY23 DDG-51.