The Navy has added $231,488,876 to a Textron Systems contract to build two more Ship to Shore Connector Landing Craft Air Cushion (LCAC-100)-class hovercraft, extending a production line that has run out of New Orleans since the underlying contract was first awarded in 2023.
Background
The Navy's LCAC-100 program replaces the service's aging fleet of LCAC hovercraft, which move Marines, vehicles and equipment from amphibious ships to the beach across water, mud flats, ice and other terrain that stops conventional landing craft. The original hovercraft fleet entered service in the 1980s, and the Navy has spent the past several years transitioning to the LCAC-100 variant, which carries updated engines, electronics and a redesigned craft structure intended to extend service life and reduce maintenance burden.
Textron Systems Corp., headquartered in New Orleans, Louisiana, has served as the Navy's shipbuilder for the LCAC-100 program under a contract originally awarded in 2023. The Aug. 17, 2026 action is a modification to that base contract, N00024-23-C-2452, rather than a new competitive award, meaning it adds craft to an existing production line rather than opening a new solicitation.
Because the modification builds on an already-competed base contract, the Navy did not solicit new bids for the two additional craft. That is a common structure on multi-year shipbuilding programs, where the service locks in a single builder for the life of a production run and then exercises options or issues modifications as budgets and fleet requirements allow, rather than re-competing each increment of hulls. It also means Textron's pricing, technical baseline and quality standards for the craft carry forward from the original 2023 award rather than being renegotiated from scratch.
Key Details
Naval Sea Systems Command in Washington, D.C., is the contracting activity for the modification, which is structured as a fixed-price incentive (firm-target) contract. That pricing structure sets a target cost and profit for the work but allows Textron's final payment to shift based on how actual costs compare to the target, splitting cost overruns or underruns between the Navy and the contractor rather than fixing the price outright as a standard firm-fixed-price contract would.
The Aug. 17, 2026 modification was one of seven Navy contract actions included in that day's Pentagon daily contracts release, appearing alongside unrelated awards to Lockheed Martin Corp., CACI Inc. - Federal and other firms for programs unconnected to the LCAC-100 line. That volume is typical for the daily release, which routinely bundles multiple, unrelated service-branch contract actions into a single announcement rather than issuing them individually.
The $231,488,876 modification funds construction of two additional LCAC-100-class craft. The bulk of the work, 62%, is performed in New Orleans, Louisiana, where Textron Systems is based. Another 14% of the work is spread across other, unspecified locations. The remainder is split among eight additional named sites: Camden, New Jersey (8%); Cincinnati, Ohio (6%); Gloucester, United Kingdom (4%); Harahan, Louisiana (2%); and four sites at 1% each — Hunt Valley, Maryland; Portsmouth, Virginia; Huntington Beach, California; and Chanhassen, Minnesota.
The Navy funded the modification in full at the time of award using Fiscal 2026 shipbuilding and conversion funds, which do not expire, so the money is not subject to a year-end use-it-or-lose-it deadline. Fully funding an order at award, rather than spreading obligations across multiple fiscal years, gives Textron budget certainty for the full two-craft order from the outset rather than requiring the Navy to add incremental funding as work proceeds. The Navy set an estimated completion date of May 24, 2032, giving Textron roughly six years to deliver both craft.
What It Means for Contractors
The modification confirms that Textron Systems' base LCAC-100 contract remains an active vehicle for follow-on hovercraft orders rather than a fixed-quantity buy that closed out after its initial award. Contractors watching the program should expect the Navy to continue exercising the base contract for additional craft as fleet requirements evolve, rather than opening a new competition for each increment. Because the base contract already survived a competitive process in 2023, the Navy can add craft through modifications like this one whenever shipbuilding funds and fleet requirements align, without the lead time a fresh solicitation would require.
The nine-site work breakdown is a reminder that LCAC-100 production is not confined to Textron's New Orleans yard. Suppliers of engines, electronics and structural components in Ohio, New Jersey, Maryland, Virginia, California, Minnesota and the United Kingdom are already integrated into the supply chain, and companies with relevant manufacturing capability in those regions may find subcontracting opportunities as Textron scales up to meet the additional two-craft order.
The full obligation of Fiscal 2026 shipbuilding funds at the time of award also matters for planning purposes. Because the Navy did not spread funding across multiple fiscal years, Textron and its subcontractors have budget certainty for the entire two-craft order from day one, rather than facing incremental funding that could otherwise lag behind production milestones. Contractors bidding into Navy shipbuilding work more broadly should note that fully funded, non-expiring obligations of this kind reduce the risk that a program stalls mid-production for lack of appropriated money.
The fixed-price incentive structure, rather than a straight firm-fixed-price arrangement, also indicates the Navy is willing to share cost risk with Textron on this increment. Contractors pursuing similar shipbuilding work should expect NAVSEA to continue favoring incentive-type pricing on production runs where cost estimates carry some uncertainty, rather than defaulting to firm-fixed-price terms across the board.
With an estimated completion date of May 24, 2032, the modification also signals a multi-year production tail for LCAC-100 craft, giving suppliers a longer planning horizon for parts and labor tied to the program than a shorter-term delivery order would. Contractors who track amphibious warfare procurement should treat this modification as evidence that the LCAC-100 line remains funded and active well past its original 2023 award, rather than winding down toward a fixed end quantity. That distinction matters for firms deciding whether to invest in tooling, staffing or facility upgrades tied to Navy hovercraft work, since a program with a defined production tail through 2032 offers a different risk calculus than one nearing its final deliveries.
