By using the block buy approach the Navy expects savings of $491 million as compared to the total anticipated costs of carrying out the program through annual contracts.

This T-AO block buy delivers on the Department of Navy’s commitment to get more players on the field while growing near-term capability and capacity,” said Nickolas H. Guertin, Assistant Secretary of the Navy for Research, Development and Acquisition (ASN RD&A). “This multi-billion dollar award reflects innovation to build and sustain our maritime dominance and allows for critical investment and sustainment of our shipbuilding industrial base.

This award includes a Shipbuilding Capability Preservation Agreement with NASSCO that broadens and strengthens the shipbuilding industrial base by providing an incentive for a shipbuilder to obtain new private sector work, thereby reducing the Navy’s cost of doing business.  This strengthening of the industrial base is aligned with the Secretary of the Navy’s Maritime Statecraft initiative.

“This block buy contract will provide capability for our fleet while providing cost savings to the Navy and stability for the shipbuilding industrial base,” said John Lighthammer, program manager, Auxiliary and Special Mission Shipbuilding Program Office, Program Executive Office (PEO) Ships. “The partnership between the Navy and NASSCO is important and we rely on the shipbuilding workforce at NASSCO and their many vendors and suppliers to construct and deliver these ships.”

T-AO Fleet Replenishment Oilers operate as the primary fuel pipeline from resupply ports to station ships, providing replenishment of bulk petroleum product, dry stores/packaged cargo, fleet freight, mail and personnel to combatants and support forces underway.

PEO Ships, one of the Department of Defense’s largest acquisition organizations, is responsible for executing the development and procurement of all destroyers, amphibious ships and craft, auxiliary ships, special mission ships, sealift ships and support ships.