Congress OKs $500 Million to Build Navy Ship at Nassco

Congress has tentatively approved $500 million for a fourth combat supply ship for the Navy that will be built at the National Steel & Shipbuilding Co., it was announced Friday.

The appropriation was announced by three San Diego-area congressmen, who said it will save more than 1,000 jobs at the Nassco shipyard in 1993, when the ship is scheduled to go into production. The company now has about 4,000 employees.

Known as the AOE-10 (auxiliary oiler explosives), the ship is designed to travel at a speed of at least 25 knots while carrying a maximum load of 150,000 barrels of fuel and 1,800 tons of munitions.

Nassco is now building three other AOEs under a $1-billion Navy contract. The first of the ships was launched in October, 1990, and is scheduled to be delivered to the Navy in May. Fred Hallett, Nassco’s chief financial officer, said the other two AOEs are in different stages of construction.

The other two ships are scheduled to be delivered to the Navy in late 1993 and early 1994, Hallett said.

Although the $500-million appropriation for the fourth ship still has to be approved by the full House and Senate, a spokesman for Rep. Randy (Duke) Cunningham (R-San Diego) said that the funding is “virtually guaranteed.”

However, Hallett said that, even if the money is approved, the Navy still has to exercise an option to have the new ship built.

“It would be a tremendous asset to a shrinking Navy,” Hallett said. “It’s the kind of ship that we need to project force and help a stronger, capable Navy.”

The AOE is designed to resupply a carrier battle group at combat speed and in combat conditions. Older supply ships are not capable of traveling at fleet speed.

Building a fourth AOE would enable Nassco to continue operating almost to the end of the century, when shipyard officials hope to compete in the double-hull market. Nassco is counting on U.S. oil companies to upgrade their single-hull ships with double hulls to prevent accidents such as the 1989 one of the Exxon Valdez that spilled oil off the Alaskan coast.

“Nassco hopes to participate very strongly in that market,” Hallett said. “We have maintained about a 30% market share for U.S. flag tankers.”