This post has been updated to include additional information from the Navy.

The Navy awarded a $795-million contract to Fincantieri to begin building a new class of guided-missile frigates, in the first new major shipbuilding program the service has started in more than a decade, the Navy announced today.

Fincantieri beat out what was originally four other competitors, who were asked by the Navy to take a mature parent design and evolve it to meet the Navy’s needs for potential high-end warfare. Fincantieri, which will build its frigate at its Marinette Marine shipyard in Wisconsin, based its FFG(X) design on the FREMM multi-mission frigate already operated by the French and Italian navies.

The detail design and construction contract covers one ship in the current Fiscal Year 2020 and options for as many as nine more ships, for a total value of $5.58 billion if all options are exercised.

“The Navy’s Guided-Missile Frigate (FFG(X)) will be an important part of our future fleet,” Chief of Naval Operations, Adm. Mike Gilday said in a Navy statement.

“FFG(X) is the evolution of the Navy’s Small Surface Combatant with increased lethality, survivability, and improved capability to support the National Defense Strategy across the full range of military operations. It will no doubt help us conduct distributed maritime operations more effectively, and improve our ability to fight both in contested blue-water and littoral environments.”

“I am very proud of the hard work from the requirements, acquisition, and shipbuilder teams that participated in the full and open competition, enabling the Navy to make this important decision today,” James Geurts, assistant secretary of the Navy for research, development and acquisition, said in the statement.

“Throughout this process, the government team and our industry partners have all executed with a sense of urgency and discipline, delivering this contract award three months ahead of schedule. The team’s intense focus on cost, acquisition, and technical rigor, enabled the government to deliver the best value for our taxpayers as we deliver a highly capable next generation frigate to our warfighters.”

“When we began this journey nearly two years ago it was with the belief that there was a place for new ideas, new platforms and new partners in an already talented U.S. shipbuilding industry,” Fincantieri Marine Group CEO Dario Deste said in a statement. “Today’s announcement validates that thinking.”

The Navy has spoken about its frigate program as the model of how it would like to approach ship acquisition in the future. By bringing together a FFG Requirements Evaluation Team (RET) that included the acquisition community, resource sponsors, the budget community, fleet representatives, technologists in and out of government and both shipbuilders and others in industry, the Navy was able to figure out early on how it might balance capability with cost. The service has said this approach shaved six years off the program, compared to what it might have looked like under more traditional approaches.

Navy leadership in 2017 determined that a new frigate program was needed beyond what could be modified on the Littoral Combat Ship program, which had been the sole small combatant in future fleet plans. The frigate would be more lethal and survivable than an LCS, they said, and the service stood up the FFG RET. Based on the RET’s work, the service approved top-level requirements in October 2017 and kicked off a conceptual design phase that spanned 16 months and included five industry teams. With confidence that industry would be able to meet the requirements, the Navy then validated its capability development document in February 2019, and the request for proposals for the detail design and construction contract was released in June.

The Navy also sped up the process and reduced risk to the program by relying heavily on government-furnished equipment, ensuring the frigate would use existing systems already fielded on other surface combatants in the fleet. These systems include an Enterprise Air Surveillance Radar (EASR), Baseline 10 Aegis Combat System, Mk 41 Vertical Launch System, and other communications and defensive systems with hot production lines and proven performance in the fleet. This not only speeds up the frigate design and construction effort but also has benefits for the cost of procuring these as GFE, maintaining a common inventory of spare parts and training sailors to operate the same system across multiple ship classes.

“Many of the things that tend to trip up lead ships, we took proactive steps and lessons learned to retire the risk there. Every lead ship is hard, I’m not denying that, but I think we set ourselves up really well for success on this program,” Program Executive Officer for Unmanned and Small Combatants Rear Adm. Casey Moton told reporters in a Thursday evening press briefing on the contract award.

Geurts, the Navy acquisition chief, said during the media call that “all this was done with an intense focus on cost, acquisition and technical rigor so that we got the best value for our warfighter and the taxpayer.” He added that the ability to rapidly improve the production line to bring the cost per ship down was part of the selection criteria, and “I think you’re going to see an aggressive cost curve, particularly on the shipbuilder side.”

There will be some opportunity to lower costs on the GFE side, too, he said. On the radar, for instance, the frigate’s EASR will be based on the SPY-6 Air and Missile Defense Radar that Raytheon designed for the Flight III Arleigh Burke destroyer configuration. Geurts said that both programs could benefit as Raytheon’s production line matures to support both radars.

“Our goal in the Navy again is to maximize commonality of these combat systems software and hardware across the fleet. That helps us not only from a cost perspective but helps us in training, maintenance, sustainability,” he said, adding that it will also mean timely updates to capability in the future as defense contractors upgrade the Aegis Combat System or the Surface Electronic Warfare Improvement Program (SEWIP), for example.

Going forward, the detail design phase will begin immediately, and construction will begin no later than April 2022. The first ship of the class – still yet to be named, despite an effort by outgoing Acting Secretary of the Navy Thomas Modly to name the frigates the Agility class – will deliver by 2026 and reach initial operational capability by 2030. The lead ship will cost $1.281 billion, with $795 million of that covering the shipbuilder’s detail design and construction costs and the rest covering the GFE, including the combat systems, radar, launchers, command and control systems, decoys and more.

For the rest of the class, the total ship cost – contractor costs and GFE – has dropped. The Navy previously said it was aiming for an average cost of ships 2 through 20 of $800 million in constant year 2018 dollars, with a requirement to stay below $950 million in CY 2018 dollars. Now the service has the average follow-on cost pegged at $781 million in constant year dollars.

Geurts said the Navy has not committed to an acquisition strategy for frigates beyond these first 10. Shipbuilding and acquisition plans call for a class of 20, but the Navy is increasingly interested in a small combatant that will be more capable than today’s LCSs and can relieve destroyers of many of their missions around the globe, serve as convoy escorts, and provide more high-end presence in more places as part of the distributed maritime operations concept. Once the final of these first 10 frigates is awarded, likely in FY 2025, the Navy could award another 10 to Fincantieri, or it could choose to bring in a second yard to build the same ship and increase the frigate’s footprint in the fleet even faster. Under the contract, the Navy has rights to the technical data package for the ship and could compete the program down the road.

In selecting between the four remaining competitors – Fincantieri and its FREMM design; Austal USA, which builds the Independence-class LCSs; General Dynamics Bath Iron Works and Navantia, who builds the F100-class frigates for the Spanish Navy; Huntington Ingalls Industries, who has not revealed details of its bid – the Navy was balancing cost with non-cost factors to get to a best value. Design and design maturity were weighted equal to performance and the ability of the ship to meet the Navy’s warfighting needs as outlined in the National Defense Strategy and other documents. Schedule, production approach and facilities were weighted lower, with data rights being the lowest-weighted non-cost factor. The Navy was not looking for a straight price shoot-out but instead wanted the companies to compete for the best capability for the best value. Lockheed Martin, who builds the Freedom-variant LCS at Fincantieri’s shipyard in Wisconsin, had been part of the group of five in the conceptual design phase but dropped out of the competition.

Fincantieri previously told USNI News that the company had spent about $180 million to upgrade its Wisconsin yard and planned to spend another $80 to $100 million if it won the competition so that it could reach a two-a-year production rate. If the Navy chose to build three or four a year, as some have suggested, a second yard would likely have to be brought into the program.

It is unclear what will happen at the other yards that did not win the competition. Bath Iron Works is wrapping up its work on the Zumwalt-class destroyer program but is one of two yards that build the Arleigh Burke-class destroyers and has a healthy backlog of work on DDGs. Ingalls Shipbuilding has the other half of the DDG program, as well as amphibious ships. Austal USA, though, is nearing the end of its contracted work on the LCS program and its Spearhead-class expeditionary fast transport (EPF) ships. The company has been trying to pitch the EPF to serve as an ambulance ship or other auxiliary, but the Navy is still early in deciding what it wants its common auxiliary hull, called CHAMP, to look like.

Bath Iron Works said in a statement that “BIW’s FFG(X) team — including Raytheon, Navantia and our supplier base — produced an exceptional concept design and put forward the best bid possible. We look forward to the Navy’s debrief to us. We will continue to focus our energy on meeting the needs of the U.S. Navy by delivering Lyndon B. Johnson (DDG 1002) and the 11 Arleigh Burke-class destroyers we currently have under contract. The DDG-51 is a proven design that has shown its ability to evolve and deliver increased capabilities to the fleet. We look forward to seeing our workforce prove that they can deliver these ships on schedule and oversee the maintenance and modernization of destroyers currently deployed in the fleet.”

What is clear, though, is the role the frigate will play in the surface navy. Vice Adm. Jim Kilby, the deputy chief of naval operations for warfighting requirements and capabilities (OPNAV N9), said during the media call that the FREMM-based frigate design had significant margin to grow as the threat picture evolves in the coming years and the Navy matures new technologies to deal with those threats.

The frigate must be able to accommodate one manned helicopter and one unmanned air vehicle, he said, but the margin built into the design will allow the frigate to operate the full range of manned and unmanned vertical lift aviation, to support the wide range of missions the frigate will be expected to conduct. He also noted that the ship currently has vertical launch missile tubes as part of its defense package, but the ship has the space and power to take on laser weapons in the future to provide point defense, freeing up those VLS tubes for offensive weaponry instead.

“This frigate, though it’s classified as a small surface combatant, really falls nicely in between our small surface combatants and our large surface combatants, and I see it doing multiple things,” Kilby said.

“This is going to be a real workhorse for the United States Navy supporting distributed maritime operations in the future. So we are super excited about this ship, and I can’t think of a better asset to a strike group or strike group commander to give them the flexibility to do what we need to do in the future.”