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Tuesday, Mar 19, 2024
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Nassco Has Designs On Big Navy Contract

San Diego-based General Dynamics Nassco has jumped into the competition to build a series of refueling ships — as many as 17 — for the U.S. Navy.

Company President Fred Harris also confirmed that the Barrio Logan shipyard plans to hire about 1,000 people over the next 12-14 months.

Recent commercial shipbuilding wins contributed to a situation where Nassco is preparing to expand. The General Dynamics business unit said in late May that it received a contract from American Petroleum Tankers to build four product tankers. The deal includes options to build four more.

The shipyard announced in December that it finalized a contract to build two container ships for TOTE Inc. Those ships will be powered by liquefied natural gas.

Meanwhile, work continues on the military side.

Harris said that President Barack Obama’s fiscal 2014 budget request, now making its way through Congress, has funding for a fourth mobile landing platform ship.

Nassco has already delivered the lead ship of the class, the USNS Montford Point. Two other ships are under construction.

Harris said that the majority of the new hires would be trade workers. The company declined to say how many employees it would have when the hiring was complete.

Mulling an Oiler

With the start of the third quarter, the company took a small step toward what could be a very large project.

The Navy asked three builders to rough out designs for a new ship called a fleet replenishment oiler, or T-AO(X).

The Navy’s existing oilers, including the 678-foot-long Henry J. Kaiser class, are getting old. The service said it wants to use its new class of oilers in conjunction with its fleet of T-AKE military cargo ships. Nassco designed the T-AKE and built 14 of the ships between 2001 and 2012.

The Navy envisions the oilers would provide fuel and cargo to fighting ships. In addition, the Navy said its new oiler could accompany a T-AKE as a “station ship,” providing fuel to a carrier strike group or an amphibious ready group while it was on station.

Nassco’s competitors on the oiler project will be Huntington Ingalls Industries and VT Halter Marine, both of Pascagoula, Miss.

Nassco Has the Advantage

Retired shipbuilding industry executive Tim Colton said it was “inevitable” that Nassco would be asked to submit preliminary designs for the oiler. “It’s their program to lose.”

Colton made his comments in his Maritime Memos blog.

He also said that the inclusion of VT Halter “raises the very real possibility that we might actually get something affordable.”

The Naval Sea Systems Command, or Navsea, presented the three builders with preliminary design contracts that will not exceed $1.7 million. The studies are expected to take six to 10 months. The contracts include options to study related topics such as ship integration and inert gas systems.

“These studies are an important step for Nassco to compete for and hopefully win the T-AO(X) design and construction contracts,” said Kevin Mooney, Nassco’s vice president of programs.

“We are well positioned to perform well on the studies contracts due to our extensive experience in designing/building Navy auxiliary ships and commercial tankers, and our proven record of incorporating cost savings features into our ships.”

The government has asked for an affordable ship design. It also said it’s mulling a purchase of 17.

A program of 17 ships would be worth billions of dollars.

Nassco and the government agreed on a price of $1.3 billion for three mobile landing platform ships — the Montford Point and two of its sister ships. Nassco and the Navy worked to keep costs low on that particular program.

The Navy wants to put the lead ship of the T-AO(X) class in its fiscal 2016 budget and take delivery in 2020, according to the contract announcement.

The oiler contract should be a good one to watch over the next five years, Colton opined. The maritime blogger noted that Norway has taken a less expensive route by having its oilers built in South Korea.

The U.S. Department of Defense buys American when it comes to ships.

Buying American also matters in commercial shipping — under certain circumstances.

The federal Jones Act states that ships traveling between U.S. ports must have been built in a U.S. shipyard.

That is the reason that TOTE went with Nassco for container ships that will travel the route between Jacksonville, Fla. and San Juan, Puerto Rico.

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