General Dynamics NASSCO Awarded $6.8B Navy Contract for 8 Replenishment Oilers

A General Dynamics (NYSE: GD) subsidiary has secured a $6.75 billion block-buy contract from the U.S. Navy to design and build up to eight T-AO 205 John Lewis-class fleet replenishment oiler ships.

The Department of Defense said Friday Naval Sea Systems Command expects General Dynamics NASSCO to perform contract work in California, Louisiana, Michigan, Massachusetts, Pennsylvania, Texas, Virginia, Wisconsin, Mexico and other locations through January 2035.

According to General Dynamics, the Navy has obligated $780 million to facilitate the construction of the 10th oiler, T-AO 214, under the new contract.

“We are pleased to continue building these ships, with seventeen of the Navy’s twenty-ship program of record now on contract. This will make the T-AO program the longest Navy production series in NASSCO history,” Dave Carver, president of General Dynamics NASSCO, said in a statement published Friday.

Block Buy Contract

The Navy expects to generate $491 million in savings through the block-buy approach.

“This T-AO block buy delivers on the Department of Navy’s commitment to get more players on the field while growing near-term capability and capacity,” said Nickolas Guertin, assistant secretary of the Navy for research, development and acquisition.

“This multi-billion dollar award reflects innovation to build and sustain our maritime dominance and allows for critical investment and sustainment of our shipbuilding industrial base,” added Guertin.

First 9 Ships Under Contract

NASSCO is under contract with the Navy to build the first nine ships of the John Lewis-class. In 2016, the General Dynamics business received a contract to construct the first six replenishment oilers. In 2022, it secured a contract modification to build three more oilers, T-AO 211 to 213.

NASSCO delivered the first ship, USNS John Lewis (T-AO 205), to the Navy in July 2022.

Two ships—the USNS Sojourner Truth (T-AO 210) and the USNS Thurgood Marshall (T-AO 211)—are in construction.

The General Dynamics subsidiary will christen and launch the USNS Lucy Stone (T-AO 209) ship on Sept. 21, and plans to begin construction work on USNS Ruth Bader Ginsburg (T-AO 212) in October.

The T-AO fleet serves as the Navy’s main fuel pipeline from resupply ports to naval ships, replenishing petroleum products, fleet freight, dry cargo, mail and personnel to combatants and support forces.