General Dynamics‘ (NYSE: GD) NASSCO subsidiary has received a potential $3.2 billion contract from the U.S. Navy to design and build six replenishment oilers.
The Defense Department said Thursday the contract has a base value of $640 million for the initial T-AO 205 class fleet replenishment oiler, which could be followed by one ship per year from fiscal 2018 to fiscal 2022 if funds are appropriated.
DoD added the contract covers line items for five follow ships and contains options for provisioned item orders, special studies and engineering, industrial, contract design, cost reduction and implementation support services, among others.
Work will occur in Mexico and in California, Michigan, Virginia, Wisconsin, Louisiana, Oregon, Massachusetts and other locations through July 2020 for the first ship and July 2025 for the rest of the replenishment oilers.
The Naval Sea Systems Command will obligate the base contract amount at the time of the award from the Navy’s fiscal 2016 shipbuilding and conversion funds.
Replenishment oilers work to resupply fuel, fleet cargo and stores to customer ships at sea.