Investing.com - The U.S. Department of War awarded General Dynamics (NYSE: GD) Electric Boat Corp. a $1.27 billion cost-plus-fixed-fee modification to an existing contract for lead yard support and development studies related to Virginia-class submarines.

The Groton, Connecticut-based company received the modification to contract N00024-20-C-2120. The contract includes options that could increase the total value to $2.49 billion if exercised.

Work under the contract will take place primarily in Groton, Connecticut (91%), with additional work in Newport News, Virginia (8%), Newport, Rhode Island (less than 1%), and Quonset Point, Rhode Island (less than 1%). The project is scheduled for completion by April 2027.

The Navy will fund the contract using fiscal 2026 research, development, test and evaluation funds totaling $139.99 million (64%), along with shipbuilding and conversion funds from fiscal years 2019 through 2026. The funding also includes $46.98 million from fiscal 2023 shipbuilding funds (22%) and $10.71 million from fiscal 2022 shipbuilding funds (5%).

Of the total funds obligated at the time of award, $1.09 million will expire at the end of the current fiscal year. Naval Sea Systems Command in Washington, D.C., serves as the contracting activity.

Separately, General Dynamics Mission Systems Inc. received a $60.81 million cost-plus-fixed-fee modification to support Independence-variant Littoral Combat Ships. The Pittsfield, Massachusetts-based unit will provide design agent services and lifecycle sustainment services, with work expected to be completed by March 2027 in San Diego, California.