It increases the attack and defense of all ships built on that planet, and as far as I know it stacks with all structure bonuses.

Getting that event on a high productivity planet (700% or several smaller bonus tiles on a high PQ world) is the holy grail of invincible ship building. Especially as the Arceans, you can build ships that one-shot entire enemy fleets and never even have to defend themselves against return fire.

In my recent game (DA), i got ships build with a 50% bonus plus i had most of my ability points set to defence hp and attack as well as luck and unaversalist gov (terran).

Had a big war with Thalans - used them to up the HP of my ships to massive levels. Eventually went to was with Drengin who by that time had maximum weapons tech (as did i). So that 50% planetary bonus, all the experience and other stuff in the end was worth...... nothing! Why? because maximum weapons technology is so powerful that it makes all the defence techs irrelevant as well as hitpoints. experience and all the rest of it, all irrelevant. (Save for 1 on 1 ship combat)