WASHINGTON — Austal USA has received its first contract to build a steel ship after revamping its aluminum-only construction yard in Alabama, with the U.S. Navy awarding the company $144 million to design and build two towing, salvage, and rescue ships (T-ATS).

The Mobile shipyard announced in June 2020 it would take $50 million in federal government funds and an equal amount of its own money to upgrade the yard to build steel ships, which is primarily what the Navy fields. Austal has built aluminum Independence-variant littoral combat ships and expeditionary fast transport ships (EPF), but the LCS line is coming to an end and the future of the EPF remains unclear.

“The Austal USA team is excited to get to work on this program and leverage our new steel manufacturing line to support the U.S. Navy’s and U.S. Coast Guard’s requirements for steel ships,” Austal USA President Rusty Murdaugh said in an Oct. 5 news release.

Austal Vice President of Business Development and External Affairs Larry Ryder told Defense News in August that being selected to serve as the “follow yard” for the Constellation-class frigate program — creating additional capacity for the Navy by building Fincantieri’s frigate design at a second yard — is the ideal program for Austal’s new steel shipbuilding capability.

The U.S. Coast Guard’s offshore patrol cutter program or the Navy T-AGOS ocean surveillance ship program would also be fine options for Austal, he said, and the yard will compete for the light amphibious ship and next-generation logistics ship even though they’re simpler programs that don’t take full advantage of the workforce’s talents.

“We need to get some awards,” he said, to avoid layoffs during the transition from the LCS program to whatever steel program comes next.

This T-ATS award will help bridge that gap for Austal and its workforce, who will be ready to start building steel ships when the manufacturing line opens in April.

The contract, announced Oct. 5, includes two ships and options for three more. Executing all options would bring the total value to more than $385 million.

“Austal USA will utilize its proven ship manufacturing processes and innovative methods that incorporate lean manufacturing principles, modular construction, and moving assembly lines, all housed under the company’s new state-of-the-art enclosed steel production facility set to open in April,” the company said in the news release.

“T-ATS will provide ocean-going tug, salvage, and rescue capabilities to support U.S. fleet operations and will be a multi mission common hull platform capable of towing heavy ships. These ships will be able to support current missions, including oil spill response, humanitarian assistance, and wide area search and surveillance. The platform also enables future capability initiatives like modular payloads with hotel services and appropriate interfaces,” it continued.

Megan Eckstein is the naval warfare reporter at Defense News. She has covered military news since 2009, with a focus on U.S. Navy and Marine Corps operations, acquisition programs, and budgets. She has reported from four geographic fleets and is happiest when she’s filing stories from a ship. Megan is a University of Maryland alumna.

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