The U.S. Navy is channeling nearly $1 billion into rebuilding its submarine manufacturing base, betting that automated production lines and supply chain overhauls can close a widening gap between the submarines it needs and the ones shipyards can actually deliver. The investment pairs a massive federal contract awarded in September 2024 with a new factory in Alabama that opened in early 2026, together forming the most aggressive push in years to fix chronic production delays in the Virginia- and Columbia-class submarine programs.
A $950 Million Contract to Rebuild the Supply Chain
The Naval Sea Systems Command, known as NAVSEA, awarded a cost-plus-fixed-fee contract worth $950,744,520 to BlueForge Alliance in September 2024. Designated contract N00024-24-C-2135, the deal covers planning, resourcing, coordinating, and uplifting the U.S. Submarine Industrial Base along with Foreign Military Sales requirements. NAVSEA in Washington served as the contracting activity.
The contract structure itself tells a story about the Navy’s priorities. A cost-plus-fixed-fee arrangement means the government absorbs most cost risk while guaranteeing the contractor a set profit margin. That structure is typically reserved for programs where the Pentagon wants speed and flexibility more than it wants to pin down a firm price. For a nearly billion-dollar deal focused on industrial capacity rather than a specific weapons system, the choice signals that the Navy views submarine production bottlenecks as a problem worth paying a premium to solve quickly.
BlueForge Alliance operates as a consortium focused on submarine supply chain health. The organization’s role under this contract is not to build submarines directly but to identify weak links in the hundreds of suppliers that feed parts and materials to the two main submarine shipyards. That distinction matters because the production delays plaguing both the Virginia and Columbia programs stem less from problems at the final assembly yards and more from shortages of skilled labor, raw materials, and precision components at lower tiers of the supply network.
Under the contract, BlueForge is expected to map out where capacity is most constrained, from castings and forgings to electronics and high-specification steel, and then help those suppliers expand. That can include arranging financing, coordinating workforce training, or helping small firms navigate Navy quality requirements that would otherwise be too complex or expensive to tackle alone. In effect, the Navy is outsourcing the job of industrial base architect to a dedicated intermediary that can move faster than traditional acquisition channels.
Why Submarine Production Keeps Falling Behind
The Navy has struggled for years to hit its target of building two Virginia-class attack submarines per year. The Columbia-class ballistic missile submarine program, which is meant to replace the aging Ohio-class fleet carrying nuclear deterrent missiles, faces its own schedule pressure. Both programs compete for many of the same specialized suppliers, welders, and manufacturing facilities, creating a bottleneck that neither program can escape on its own.
The core tension is straightforward. The submarine industrial base shrank dramatically after the Cold War as orders dropped and skilled tradespeople retired or moved to other industries. Rebuilding that capacity takes years, and the Navy cannot simply order more submarines and expect them to appear faster. Factories need retooling. Workers need training that can take a decade to produce a fully qualified nuclear submarine welder. And the supply chain, which stretches across dozens of states, includes small businesses that lack the capital to expand on their own.
This is why the BlueForge contract focuses on coordination and uplift rather than direct construction. The Navy is essentially paying to rebuild the industrial ecosystem that makes submarine production possible. Without that foundation, adding money to the top-line shipbuilding budget produces diminishing returns because the yards cannot build faster than their suppliers can deliver. The new contract is an acknowledgment that the bottleneck is systemic, not localized.
Hadrian’s Alabama Factory Targets Precision Parts
While BlueForge works on the broader supply chain, one company is already putting automated manufacturing into practice for submarine components. Hadrian opened an advanced manufacturing facility in Cherokee, Alabama, on March 20, 2026. Known as Factory 4, the plant is a highly automated manufacturing facility designed to mass-produce components for both Columbia- and Virginia-class submarines.
The choice of Cherokee, a small town in northwest Alabama, reflects a deliberate strategy. Locating automated production in lower-cost regions allows companies to reduce overhead while tapping into a workforce that may not have access to traditional defense industry jobs in shipyard cities like Newport News, Virginia, or Groton, Connecticut. Automation also addresses the skilled labor shortage differently than traditional hiring campaigns. Instead of searching for experienced machinists who are already in short supply, highly automated plants can produce precision parts with fewer workers who need less specialized training.
Factory 4 represents a different approach to the same problem the BlueForge contract targets. Where BlueForge aims to strengthen existing suppliers, Hadrian is adding entirely new production capacity built from the ground up around modern automation. By standardizing processes and relying on software-driven machining, the facility is designed to deliver consistent parts at scale, with rapid changeovers between different submarine components. Both approaches are necessary because the deficit is large enough that fixing old capacity alone will not close the gap.
Automation as an Answer to Labor Shortages
The bet on automation across both the BlueForge contract and facilities like Factory 4 reflects a hard reality: the defense industrial workforce is aging, and replacements are not arriving fast enough. Submarine construction requires some of the most demanding manufacturing work in existence. Hull sections must be welded to tight tolerances. Piping systems for nuclear reactors demand near-perfect quality control. And every component must meet military specifications that far exceed commercial standards.
Automated machining centers can produce many of these components faster and with more consistent quality than manual processes. They do not eliminate the need for skilled workers, but they change the ratio. A factory with advanced CNC machines, robotic material handling, and automated inspection systems might need a fraction of the operators a traditional shop would require. For an industry that cannot find enough qualified workers at any price, that shift is not optional, it is a survival strategy.
Automation also offers a way to “bank” expertise in software and machine programming rather than solely in individual workers. Once a process for a critical part is validated, it can be replicated across machines and facilities with fewer variables than a purely manual approach. That consistency is particularly valuable for submarine programs, where quality escapes can have severe safety and schedule consequences.
The risk, however, is that automation investments take time to pay off. New factories need months of qualification testing before the Navy will accept their parts for use in nuclear submarines. Supply chain integration requires coordination between new automated suppliers and legacy systems at the shipyards. And cost-plus contracts, while they encourage speed, can also lead to cost growth if oversight is not tight. The Navy will have to manage these efforts closely to ensure that the promised capacity actually materializes on the timelines the fleet requires.
What Most Coverage Gets Wrong
Much of the discussion around submarine production treats the problem as purely a money issue: if Congress appropriates more funding, the thinking goes, shipyards will simply hire more people and buy more equipment. The reality is more complicated. The constraints facing the Virginia- and Columbia-class programs are rooted in time, talent, and industrial physics as much as in budget lines.
Money cannot instantly create a master welder or a seasoned nuclear engineer. It cannot conjure a new forging press out of thin air or compress the years-long process of qualifying a new supplier for critical submarine components. The BlueForge contract and Hadrian’s Alabama factory are attempts to confront those structural limits directly by rebuilding the underlying industrial base rather than just feeding more dollars into existing bottlenecks.
That makes this nearly $1 billion push less about headline-grabbing ship counts and more about the unglamorous work of capacity building: mapping supplier networks, financing equipment upgrades, training a new generation of skilled workers, and wiring automated factories into a defense ecosystem that was never designed for them. If these efforts succeed, the payoff will show up gradually, in fewer schedule slips, more predictable deliveries, and a submarine fleet that grows at something closer to the Navy’s stated plans. If they fall short, no amount of last-minute funding will be enough to close the gap.
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*This article was researched with the help of AI, with human editors creating the final content.
