The Stevens Battery was another pre-war armored warship, (though it was never completed due to cost overruns and loss of interest]

The Union Government received news of the creation/modification of the ironclad CSS Virginia and reacted by setting up the Ironclad Board and appropriating $1.5 million on Apr 7 1861. Ref

Congress passed a bill on Aug. 7, 1861, directing the Secretary of the Navy, Gideon Welles, to appoint a board to investigate plans for ironclads and to appropriate $1.5 million for their construction

The development of naval guns and the crimean war had demonstrated that wood alone would not suffice for armor, and the news of the CSS Virginia spurred urgency.

The navy advertised openly for proposals for iron or iron clad steam vessels of war with a shallow draft, to be received by Apr 15.

They received 17 proposals, and selected three of them - the armored sloop Galena, and the more traditional New Ironsides in addition to the Monitor

all three ironclad ships differed substantially in design and with varying degrees of risk. The USS Monitor was the most innovative design by virtue of its low freeboard, shallow-draft iron hull, and total dependence on steam power. The riskiest element of its design was its rotating gun turret, something that had not previously been built or tested by any navy. Its designer John Ericsson’s guarantee of delivery in 100 days proved to be decisive in choosing this design despite the risk involved. The second ship, the wooden-hulled USS Galena's most novel feature was her armor of interlocking iron rails but the New Ironsides design was much influenced by the French ironclad, the ‘Gloire’ and was the most conservative design of the three.

The Galena had a traditional hull, broadside battery, a sailing rig, and the armored panels. The board asked Bushnell to verify the seaworthiness of his design. He asked Ericsson to validate it. Ericsson was not in naval favor since the steam sloop "The Princeton" , built in partnership with Cornelius DeLamater almost killed President Tyler and other senior cabinet members in an 1844 explosion. However Ericsson took the opportunity to show Bushnell his design. Bushnell was taken by it and they were able to find backers and even have Lincoln review it. It became the 17th proposal, and the 3rd ship picked. Ref 3. However, the terms of the contract were decidedly not in favor of the builders. The speed of construction was a decisive factor, and Ericsson would modify his design to help expedite it (eg to allow for more layers of thinner metal armor)

Thus it became the first of the 3 to be completed and go to war.

Incidentally, the USS Michigan was designed by Samuel Hartt (who died in 1860, before the navy called for ironclads. Samuel Hartt's father owned the shipyard where the USS Constitution was built. One of Samuel Hartt's sons, Edward Hartt, would be involved in the construction of the Monitor, and would build other tinclads too.