General Dynamics Corporation ( GD ) NASSCO, a major U.S. defense shipbuilder, secured a $1.7 billion award to construct two new John Lewis-class fleet oilers for the Navy.

The agreement funds T-AO 215 and T-AO 216, expanding one of the service's most significant replenishment programs.

Dave Carver, president of General Dynamics NASSCO, said the new ships will help maintain stable employment at the company's San Diego shipyard. He noted that steady production prevents future layoffs and supports the Navy's strategic fleet goals.

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Funding Preserves Workforce Stability

NASSCO's shipbuilding backlog continues to grow.

The company is already under contract for a majority of the Navy's 20-ship program and four vessels have reached the fleet. The new award comes through a multi-ship deal that could eventually include eight more oilers.

Carver said the oiler series holds deep meaning for employees because it's the shipyard's longest continuous Navy production run. He said the program reflects the workforce's experience and commitment to national defense.

Program Expands Long-Term Construction

The Navy selected NASSCO in 2016 to design and deliver the first group of next-generation oilers.

The service later expanded that initial award to add three more ships, and a new agreement in 2024 increased the total even further.

The 742-foot vessels allow Navy combatants to refuel and resupply at sea. Each oiler can move more than 160,000 barrels of fuel, transport dry cargo, and provide aviation support while cruising at roughly 20 knots.

Four oilers have been delivered since the first contract, and five more hulls are under construction at NASSCO's southern California yard. Company engineers are preparing design and tooling for the next wave of production tied to the latest award.

General Dynamics ( GD ) oversees the program as part of its maritime portfolio. The defense contractor employs more than 100,000 people worldwide and generates revenue across shipbuilding, combat systems, aviation, and technology.

Price Action: GD shares are trading higher by 0.17% to $350.10 premarket at last check Tuesday.

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