NASSCO Awarded $940m - T-AKE Ship

Wednesday, December 17, 2008

General Dynamics NASSCO, a wholly-owned subsidiary of General Dynamics (NYSE:GD) , has been awarded a $940m contract from the U.S. Navy for the construction of two T-AKE dry cargo-ammunition ships and to purchase long-lead construction materials for two additional T-AKE ships.

Under the contract, NASSCO receives full funding for the construction of USNS Washington Chambers (T-AKE 11) and USNS William McLean (T-AKE 12). Earlier this year, NASSCO received a total of $200m to purchase the long lead materials for these ships. Construction of the Washington Chambers and the William McLean is scheduled to begin in the first and fourth quarters of 2009, respectively. The new contract also provides $200m for procurement of T-AKE 13 and 14's engines and other components that have significant manufacturing lead times. A contract that fully funds both ships is expected by February 2010. Construction of the unnamed thirteenth and fourteenth ships is scheduled to begin in the second and fourth quarters of 2010, respectively.

"This contract award permits General Dynamics NASSCO, our team of suppliers and subcontractors to maintain an efficient schedule to build these highly-capable Navy auxiliary ships at the best value to the U.S. government," said Frederick J. Harris, president of General Dynamics NASSCO.

With the contract award, the Navy is exercising its remaining options to build all 14 ships in the T-AKE class. NASSCO has already delivered six T-AKE ships and is currently building the seventh through tenth ships of the class.

General Dynamics NASSCO employs approximately 4,650 people and is the only major ship construction yard on the West Coast of the United States. In addition to the T-AKE program, the San Diego shipyard is building the first three ships of a new class of nine product carriers for U.S. Shipping Partners.

(www.nassco.com)

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