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Concept art of the new ocean surveillance vessel T-AGOS-25 that Austal USA will build. (Courtesy of Austal USA)

Corrected 5/25/2023 at 1:54 pm ET: This story has been updated to correct details about the Navy’s procurement timeline and costs for the T-AGOS ship class. The story was updated previously to correct information about a partner involved in Austal’s bid.

WASHINGTON — The Pentagon awarded Austal USA a contract to build the lead ship in what’s envisioned as the first of seven next-generation oceanic surveillance ships — in all a potential $3 billion program.

The initial $113 million contract is for designing T-AGOS 25, an auxiliary vessel focused on underwater surveillance, according to the Pentagon’s routine contract announcements published on Thursday night. The announcement states the Navy received one other offer in addition to Austal, but the Department of Defense does not routinely reveal the identity of contractors that fail to win work.

Austal will be the ship’s prime contractor but teamed up with L3 Harris Technologies, Massachusetts-based Noise Control Engineering and Louisiana-based TAI Engineers — both of which are specialized engineering firms — as well as Thomas-Sea Mine Constructors, a Louisiana-based vessel repair and construction company.

The primary mission of surveillance vessels such as T-AGOS is to gather and provide underwater acoustical data that helps the larger Navy fleet find and defeat enemy submarines.

The newly awarded contract is for the lead ship, T-AGOS-25, which lawmakers cleared the Navy to purchase in fiscal 2022. The service’s long-term shipbuilding plan anticipates the Navy will continue buying T-AGOS-class vessels in FY25 and maintain a procurement profile of one per year onward. Budget justification documents indicate the lead ship will cost roughly $790 million, a significant increase from previously projected cost that was closer to $430 million. “The lead ship cost estimate has increased due to several factors affecting shipbuilding prices including direct material inflation, supply chain challenges, and increased non-recurring engineering costs,” the budget documents explain.

“The Austal USA team is excited to support the U.S. Navy with this critical program. We have enjoyed our long partnership with the Navy in delivering aluminum ships and we are honored to continue that relationship in delivering high-quality steel ships on schedule and on budget,” Austal USA President Rusty Murdaugh said in the May 18 statement.

Anthony Nigara, president of maritime at L3Harris, said in the same release, “As the electronic and propulsion systems integrator, we’re excited to be a partner on the Austal USA team to develop the next class of TAGOS ocean surveillance ships. Our strong partnership with Austal reinforces our commitment to delivering advanced, surveillance-capable platforms to meet the U.S. Navy’s mission requirements.”

The Navy’s budget justification documents indicate the first ship should be delivered to the service in January 2028.