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By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
The Navy has awarded two key contracts related to its future amphibious operations and replenishment capabilities that if fully exercised could be worth a combined $6.3 billion.
The first contract was awarded to General Dynamics NASSCO for the detail design and construction of six T-AO 205 Class Fleet Replenishment Oilers. The contract amount is $640,206,756 for the lead ship in 2016 and, if appropriated, includes options for five follow-on ships between FY 2018 and FY 2022. The contract is part of the Navy’s John Lewis (TAO-205) class oiler shipbuilding program to build a new class of up 17 fleet oilers for the Navy.
The second contract was awarded to Huntington Ingalls for the planning of the LHA 8 amphibious assault ship. The $272,467,161 contract includes the Advanced Engineering and Procurement of Long Lead Time Material with options for detail design and construction and the associated support efforts.
The contracts were awarded following a limited competition involving just NASSCO and Huntington Ingalls, the only two shipbuilders with the capability to build both ship types, where one would be awarded the first six TAO-205s and the other the LHA 8s.
The Navy said that should all options be exercised the cumulative value of the contracts would amount to $3,156,828,444 and $3,133,852,637 to NASSCO and Ingalls, respectively.
“This strategy reinforces the Navy’s commitment to a culture of affordability that emphasizes competition while maintaining our critical shipbuilding industrial base,” said Jay Stefany, executive director for Amphibious, Auxiliary and Sealift Programs in Program Executive Office Ships. “The approach provides best value to the taxpayers, supports our industry partners and provides the foundation for future warfighting capabilities.”
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