General Dynamics NASSCO Receives Additional Eight-Ship Contract to Build T-AO 10-17

Rhea-AI Summary

General Dynamics NASSCO, a subsidiary of General Dynamics (NYSE: GD), has secured a block-buy contract from the U.S. Navy for up to eight additional John Lewis-class fleet replenishment oilers (T-AO 214 through 221). The initial ship under this new contract is valued at $780 million, with the potential total contract value exceeding $6.7 billion if all eight ships are exercised. This award brings NASSCO's share to 17 out of the Navy's 20-ship program of record, making it the longest Navy production series in NASSCO history.

The 742-feet vessels, designed to transfer fuel to U.S. Navy ships at sea, have a full load displacement of 49,850 tons and can carry 162,000 barrels of oil. NASSCO has already delivered three ships, with more currently under construction. The company's president, Dave Carver, expressed gratitude for the Navy's continued support and the opportunity to build these essential vessels.

Positive

• Secured contract for up to 8 additional ships, potentially worth over $6.7 billion
• Initial ship under new contract valued at $780 million
• Now building 17 out of Navy's 20-ship program, longest production series in NASSCO history
• Demonstrates strong, ongoing relationship with U.S. Navy
• Provides long-term revenue stream and production stability

Negative

• None.

News Market Reaction

+0.90%

1 alert

+0.90% News Effect

On the day this news was published, GD gained 0.90%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

 NASSCO is currently under contract for the first nine ships of the class, and has delivered three to date. With this award the company will build seventeen of the Navy's twenty-ship program of record.

SAN DIEGO, Sept. 13, 2024 /PRNewswire/ -- General Dynamics NASSCO, a subsidiary of General Dynamics (NYSE: GD), announced today that it has received a block-buy contract from the U.S. Navy for the construction of up to eight additional John Lewis-class fleet replenishment oilers (T-AO 214 through 221) . The tenth ship, and first under the new contract, has been awarded for $780 million. If all eight ships are ultimately exercised, and including incentives and other contract options in support of those ships, the contract value will total over $6.7 billion.

"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," said Dave Carver, president of General Dynamics NASSCO. "The NASSCO team is honored to continue working with our Navy customer and thankful for their unwavering support."

In 2016, the Navy awarded NASSCO with a contract to design and build the first six ships in the next generation of fleet oilers, the John Lewis-class. In 2022, that contract was modified to add an additional three oilers (T-AO 211 – 213). Designed to transfer fuel to U.S. Navy ships operating at sea, the 742-feet vessels have a full load displacement of 49,850 tons, capacity to carry 162,000 barrels of oil and significant amounts of dry cargo, as well as providing aviation capability while traveling at speeds up to 20 knots.

The first ship, USNS John Lewis (T-AO 205), was delivered to the U.S. Navy in July 2022. The USNS Sojourner Truth (T-AO 210) and the USNS Thurgood Marshall (T-AO 211) are currently under construction, while the USNS Lucy Stone (T-AO 209) will be christened and launched on September 21, 2024. Start of construction for the USNS Ruth Bader Ginsburg (T-AO 212) will be in October 2024.

General Dynamics NASSCO specializes in the design and construction of Navy and commercial ships and is a major provider of repair services for the U.S. Navy, with capabilities in San Diego, California; Norfolk, Virginia; Mayport, Florida; and Bremerton, Washington. More information about General Dynamics NASSCO is available at www.nassco.com.

General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services. General Dynamics employs more than 100,000 people worldwide and generated $38.5 billion in revenue in 2021. More information about General Dynamics is available at www.gd.com.

View original content to download multimedia:https://www.prnewswire.com/news-releases/general-dynamics-nassco-receives-additional-eight-ship-contract-to-build-t-ao-10-17-302248116.html

SOURCE General Dynamics NASSCO

FAQ

What is the value of the new contract General Dynamics NASSCO received for T-AO ships?

The initial ship under the new contract is valued at $780 million, with the potential total contract value exceeding $6.7 billion if all eight ships are exercised.

How many T-AO ships will General Dynamics NASSCO (GD) build in total after this contract?

With this new contract, General Dynamics NASSCO will build 17 out of the Navy's 20-ship program of record for the John Lewis-class fleet replenishment oilers.

What are the specifications of the T-AO ships being built by General Dynamics NASSCO (GD)?

The T-AO ships are 742 feet long, have a full load displacement of 49,850 tons, can carry 162,000 barrels of oil and significant dry cargo, provide aviation capability, and can travel at speeds up to 20 knots.

When did General Dynamics NASSCO (GD) deliver the first T-AO ship to the U.S. Navy?

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