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July 1, 2016 / 9:54 AM

General Dynamics NASSCO wins $640 million Navy oiler contract

Contract is for the lead T-AO 205 ship in the new class of fleet replenishment oilers.

National Steel and Shipbuilding, a division of General Dynamics, has received a $640 million U.S. Navy contract for the service's next-generation John Lewis-class oiler ship. The USNS Tippecanoe replenishment ship is shown here approaching the USS Ronald Reagan in 2016. U.S. Navy photo by Mass Communication Specialist 3rd Class Eduardo Otero

National Steel and Shipbuilding, a division of General Dynamics, has received a $640 million U.S. Navy contract for the service's next-generation John Lewis-class oiler ship. The USNS Tippecanoe replenishment ship is shown here approaching the USS Ronald Reagan in 2016. U.S. Navy photo by Mass Communication Specialist 3rd Class Eduardo Otero

WASHINGTON, July 1 (UPI) -- National Steel and Shipbuilding Company, a division of General Dynamics, has been awarded a $640 million contract for the lead ship of the U.S. Navy's John Lewis-class T-AO 205 fleet replenishment oiler.

The deal for the lead ship also includes a fix-price-incentive block buy contract for the detail design and construction of six of the ships.

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The contract includes line items for five follow ships and options for special studies, engineering and industrial services, provisioned item orders, contract design support, cost reduction and implementation and other direct costs.

If all options are exercised and authorized, the cumulative value of the contract will be $3.1 billion.

Work will be performed in California, Michigan, Virginia, Mexico, Wisconsin, Louisiana, Oregon and Massachusetts.

Lead ship work is expected to be completed by July 2020, with work for the following ships expected to be done by July 2025.

The ship is designed to transfer fuel to surface ships and have the capacity to carry 156,000 barrels of oil, including the Navy's new bio fuels, National Steel and Shipbuilding said.

The ships will also sport a significant dry cargo capacity, aviation capability and will be able to reach 20 knots.

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