WASHINGTON — The Navy today announced it has awarded General Dynamics NASSCO a contract worth up to $6.7 billion for the construction of up to eight John Lewis-class fleet oilers, a block buy deal the service anticipates will save $491 million.
Tom Rivers, executive director for amphibious, auxiliary and sealift for program executive office ships, told reporters the contract also extends an ongoing shipbuilding capability preservation agreement the Navy has with NASSCO meant to incentivize shipbuilders to seek out commercial work.
“The way this works is … if NASCO is successful in getting the commercial work, the Navy will share some of the burden cost of overhead,” he told reporters shortly after the contract announcement was published. “What happens is NASSCO becomes more competitive, and then the Navy, by bringing in additional commercial work, reduces our overhead, so our costs will go down.”
He added that the statute dates back to the 1990s and has been in use with NASSCO for several years now, but the new contract extends the agreement into the mid-2030s.
The service in 2016 awarded General Dynamics NASSCO a $3.2 billion contract for the design and construction of the first six ships of the John Lewis-class fleet oilers. Subsequently in 2022, the Navy bought two additional ships and then a third in 2023. With the addition of today’s contract, the service will have agreements for up to 17 of the planned 20 ships in the class.
Replenishment oilers carry jet fuel, diesel fuel and lubricating oil, and small quantities of fresh and frozen provisions, stores, potable water and other items, according to a Navy description of the Kaiser class, the legacy class of ships the newer vessels will replace.
NASSCO is the San Diego-based shipbuilding arm of General Dynamics and is a staple Navy shipbuilder for various support and auxiliary vessels such as the John Lewis-class oilers and the expeditionary sea bases, as well as a ship repair yard.
“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. “The NASSCO team is honored to continue working with our Navy customer and thankful for their unwavering support.”
The Navy’s current class of replenishment oiler ships were first constructed and launched in the 1980s by Avondale Shipyards, an independent shipyard that was acquired by several larger firms over the years but ultimately closed in 2014.