Navy Secures Groundbreaking T-AO Block Buy Deal

By employing a block buy approach, the U.S. Navy anticipates a cost reduction of $491 million compared to executing the program via annual contracts.

“This T-AO block buy exemplifies the Department of Navy’s strategy to enhance near-term capacity while extending capabilities across our fleet,” stated Nickolas H. Guertin, Assistant Secretary of the Navy for Research, Development, and Acquisition. “This multi-billion dollar deal showcases our innovative approach to maintain maritime supremacy while fostering investment within our shipbuilding industrial base.”

The agreement includes a Shipbuilding Capability Preservation Agreement with NASSCO, aimed at broadening the industrial base by incentivizing shipbuilders to undertake additional private sector work. This initiative reduces the Navy’s operational costs and aligns with the Secretary of the Navy’s Maritime Statecraft initiative to fortify the shipbuilding industry.

John Lighthammer, Program Manager for the Auxiliary and Special Mission Shipbuilding Program Office under the Program Executive Office (PEO) Ships, emphasized, “This block buy contract offers much-needed capabilities for our fleet, cost savings for the Navy, and stability for the shipbuilding industrial base. The Navy’s partnership with NASSCO is crucial, relying on their skilled workforce and an extensive network of vendors and suppliers to build and deliver these ships.”

T-AO Fleet Replenishment Oilers serve as the primary fuel transporters from supply ports to station ships. They provide essential replenishment of bulk petroleum products, dry stores, packaged cargo, fleet freight, mail, and personnel to combat and support forces at sea.

PEO Ships, a pivotal organization within the Department of Defense, manages the development and procurement of various maritime vessels including destroyers, amphibious ships, auxiliary and special mission ships, sealift ships, and support vessels.