Navy John Lewis (TAO-205) Class Oiler
Shipbuilding Program: Background and
Issues for Congress
Updated August 26, 2022
Congressional Research Service
https://crsreports.congress.gov
R43546

Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program

Summary
The Navy procured its first John Lewis (TAO-205) class oiler in FY2016, and a total of eight
have been procured through FY2022, including the seventh and eighth in FY2022. The first six
were procured under a block buy contract authorized by Section 127 of the FY2016 National
Defense Authorization Act (S. 1356/P.L. 114-92 of November 25, 2015). TAO-205s are being
built by General Dynamics/National Steel and Shipbuilding Company (GD/NASSCO) of San
Diego, CA. The first ship in the class was delivered to the Navy on July 26, 2022.
Current Navy plans call for procuring a total of 20 TAO-205s. The Navy’s proposed FY2023
budget requests $794.7 million for the procurement of the ninth TAO-205 class ship, and an
additional $128.1 million in cost-to-complete procurement funding to cover cost growth on TAO-
205s procured in prior years.
Issues for Congress include the following:
 cost growth and schedule delays in the TAO-205 program;
 whether to procure in FY2023 one TAO-205 class ship (as requested), no TAO-
205 class ship, or two TAO-205 class ships;
 whether to procure TAO-205s in FY2023 and subsequent years under a multiyear
procurement (MYP) or block buy contract;
 the total number of TAO-205s the Navy will require in coming years to support
its operations, particularly in light of the Navy’s new Distributed Maritime
Operations (DMO) operating concept;
 issues regarding the TAO-205 program discussed in a June 2021 Government
Accountability Office (GAO) report assessing major DOD acquisition programs;
and
 whether to encourage or direct the Navy to build TAO-205s with more ship self-
defense equipment than currently planned by the Navy.
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Appendixes
Appendix A. TAO-205 Ship Self-Defense Equipment .................................................................. 16

Contacts
Author Information ........................................................................................................................ 17

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Introduction
This report provides background information and issues for Congress on the John Lewis (TAO-
205) class oiler shipbuilding program, a program to build a new class of 20 fleet oilers for the
Navy. The issue for Congress is whether to approve, reject, or modify the Navy’s annual ship
authorization and funding requests and acquisition strategy for the program. Congress’s decisions
on this issue could affect Navy capabilities and funding requirements and the U.S. shipbuilding
industrial base.
Background
Navy Fleet Oilers
Role of Fleet Oilers
The primary role of Navy fleet oilers is to transfer fuel to Navy surface ships that are operating at
sea, so as to extend the operating endurance of these surface ships and their embarked aircraft.
Fleet oilers also provide other surface ships with lubricants, fresh water, and small amounts of dry
cargo. Fleet oilers transfer fuel and other supplies to other surface ships in operations called
underway replenishments (UNREPs). During an UNREP, an oiler steams next to the receiving
ship and transfers fuel by hose (see Figure 1, Figure 2, and Figure 3).1
Oilers are one kind of Navy UNREP ship; other Navy UNREP ships include ammunition ships,
dry cargo ships, and multiproduct replenishment ships. The Navy’s UNREP ships are known
more formally as the Navy’s combat logistics force (CLF). Most of the Navy’s CLF ships are
operated by the Military Sealift Command (MSC).
Although the role of fleet oilers might not be considered as glamorous as that of other Navy ships,
fleet oilers are critical to the Navy’s ability to operate in forward-deployed areas around the world
on a sustained basis. The U.S. Navy’s ability to perform UNREP operations in a safe and efficient
manner on a routine basis is a skill that many other navies lack. An absence of fleet oilers would
significantly complicate the Navy’s ability to operate at sea on a sustained basis in areas such as
the Western Pacific or the Indian Ocean/Persian Gulf region. The Navy states that

1 The Navy states that
A typical connected replenishment starts when a warship makes an “approach” on a CLF ship. The
CLF ship maintains steady course and speed while the “customer ship” approaches and comes
alongside the CLF ship, matching course and speed. The distance between the two ships is usually
between 120-200 feet. The CLF ship then passes heavy metal wires, to the customer ship, that are
connected at the replenishment stations. These wires are placed under tension to support fuel hoses
for refueling operations or trolleys that move pallets of provisions, ammunition, or other cargo from
ship to ship. Ships with flight decks can also receive provisions and ammunition via vertical
replenishment. During this evolution a helicopter transfers cargo in external sling loads, or in the
case of mail or passengers, inside the helicopter.
(Statement of Mr. F. Scott DiLisio, Director, Strategic Mobility / Combat Logistics Division,
Office of the Chief of Naval Operations, on the Logistics and Sealift Force Requirements and Force
Structure Assessment Before the House Armed Services Committee Seapower and Projection
Forces Subcommittee, July 30, 2014, p. 3.)
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the ability to rearm, refuel and re-provision our ships at sea, independent of any restrictions
placed on it by a foreign country, is critical to the Navy’s ability to project warfighting
power from the sea.
As the lifeline of resupply to Navy operating forces underway, the ships of the Navy’s
Combat Logistic Force (CLF) enable Carrier Strike Groups and Amphibious Ready Groups
to operate forward and remain on station during peacetime and war, with minimal reliance
on host nation support.2
Figure 1. Fleet Oiler Conducting an UNREP

Source: Navy photo accessed May 5, 2014, at http://www.navy.mil/view_image.asp?id=163895. The Navy states
that the photo is dated October 24, 2013, and shows the oiler Tippecanoe (TAO-199) extending its fuel probe to
the Aegis cruiser USS Antietam (CG-54), a part of the George Washington (CVN-73) Carrier Strike Group, in the
South China Sea.
Existing Kaiser (TAO-187) Class Oilers
The Navy’s existing force of fleet oilers consists of 15 Henry J. Kaiser (TAO-187) class ships
(Figure 4), commonly called Kaiser-class oilers for short.3 These ships were procured between
FY1982 and FY1989 and entered service between 1986 and 1996. They have an expected service
life of 35 years; the first ship in the class reached that age in 2021. The ships are about 677 feet
long and have a full load displacement of about 41,000 tons, including about 26,500 tons of fuel
and other cargo. The ships were built by Avondale Shipyards of New Orleans, LA, a shipyard that
eventually became part of the shipbuilding firm Huntington Ingalls Industries (HII). HII

2 Statement of Mr. F. Scott DiLisio, Director, Strategic Mobility / Combat Logistics Division, Office of the Chief of
Naval Operations, on the Logistics and Sealift Force Requirements and Force Structure Assessment Before the House
Armed Services Committee Seapower and Projection Forces Subcommittee, July 30, 2014, pp. 2-3.
3 The oilers shown in Figure 1, Figure 2, and Figure 3 are also Kaiser-class class oilers.
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subsequently wound down Navy shipbuilding operations at Avondale, and the facility no longer
builds ships. (HII continues to operate two other shipyards that build Navy ships.)
Figure 2. Fleet Oiler Conducting an UNREP

Source: Cropped version of Navy photo accessed May 5, 2014, at http://www.navy.mil/view_image.asp?id=
61415. The Navy states that the photo is dated July 13, 2008, and shows the oiler Leroy Grumman (TAO-195)
refueling the frigate Underwood (FFG-36) during an exercise with the Iwo Jima (LHD-7) Expeditionary Strike
Group in the Atlantic Ocean.
Figure 3. Fleet Oiler Conducting an UNREP

Source: Cropped version of Navy photo accessed May 5, 2014, at http://www.navy.mil/view_image.asp?id=1737.
The Navy states that the photo is dated June 19, 2002, and shows the oiler Walter S. Diehl (TAO-193), at center,
conducting simultaneous UNREPs with the aircraft carrier John F. Kennedy (CV-67) and the Aegis destroyer
Hopper (DDG-70). CV-67, a conventionally powered carrier, has since retired from the Navy, and all of the
Navy’s aircraft carriers today are nuclear powered. Even so, Navy oilers continue to conduct UNREPs with Navy
aircraft carriers to provide fuel for the carriers’ embarked air wings.
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Figure 4. Kaiser (TAO-187) Class Fleet Oiler

Source: Cropped version of U.S. Navy image accessed April 14, 2014, at http://www.navy.mil/management/
photodb/photos/130703-N-TG831-240.jpg. (The oilers shown in Figure 1, Figure 2, and Figure 3 are also
Kaiser-class class oilers.)
TAO-205 Program
Program Name
Navy oilers carry the designation TAO (also typed as T-AO). The T means the ship is operated by
MSC with a mostly civilian crew; the A means it is an auxiliary ship of some kind; and the O
means that it is, specifically, an oiler. TAO-205 will be the Navy’s next oiler after TAO-204,
which is the final Kaiser-class oiler.
On January 6, 2016, then-Secretary of the Navy Ray Mabus announced that the TAO-205 class
ships will be named for “people who fought for civil rights and human rights,”4 and that the first
ship in the class, TAO-205, which was procured in FY2016, was being be named for
Representative John Lewis,5 making TAO-205 one of a small number of Navy ships that have
been named for people who were living at the time that the naming announcement was made.6
TAO-205 class ships consequently are now known as John Lewis-class oilers.

4 Valerie Insinna, “Navy to Name Next Generation Oilers for Civil Rights Icons,” Defense Daily, January 7, 2016. For
more on the names of TAO-205 class ships, see CRS Report RS22478, Navy Ship Names: Background for Congress,
by Ronald O'Rourke.
5 “Secretary of the Navy Ray Mabus Names Fleet Replenishment Oiler,” Navy News Service, January 6, 2016; Sam
LaGrone, “SECNAV Mabus Names First TAO(X) Next Generation Oiler After Rep. John Lewis,” USNI News, January
6, 2016; “Navy to Name New Oiler after Civil Rights Icon,” Military.com, January 6, 2020; Valerie Insinna, “Navy to
Name Next Generation Oilers for Civil Rights Icons,” Defense Daily, January 7, 2016.
6 Representative Lewis died on July 17, 2020. For more on Navy ships named for people who were living at the time
that the naming announcement was made, see CRS Report RS22478, Navy Ship Names: Background for Congress, by
Ronald O'Rourke.
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Ship Design and Capabilities
The TAO-205 class design (Figure 5) will have capabilities similar to those of the Kaiser-class
ships, and will rely on existing technologies rather than new technologies. To guard against oil
spills, TAO-205s are to be double-hulled, like modern commercial oil tankers, with a space
between the two hulls to protect the inner hull against events that puncture the outer hull. (The
final Kaiser-class ships are double-hulled, but earlier ships in the class are single-hulled.)
Figure 5. John Lewis (TAO-205)

Source: Cropped version of photograph accompanying National Steel and Shipbuilding Company, “General
Dynamics NASSCO Launches First Ship in the T-AO Fleet Oiler Program for the U.S. Navy,” January 13, 2021.
Note: Launching is when a ship that is under construction is put into the water for the final phases of its
construction.
Planned Total Procurement Quantity
Currently Planned Total Procurement Quantity of 20
The required number of oilers largely depends on the numbers and types of other surface ships
(and their embarked aircraft) to be refueled, and the projected operational patterns for these ships
and aircraft. The Navy’s current force-level objective, released on December 15, 2016, calls for
achieving and maintaining a 355-ship fleet, including 32 CLF ships, of which 20 are to be TAO-
205s.7 Consistent with this plan, the Navy currently wants to procure a total of 20 TAO-205s.

7 For more on the Navy’s 355-ship force-level goal, see CRS Report RL32665, Navy Force Structure and Shipbuilding
Plans: Background and Issues for Congress, by Ronald O'Rourke.
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Potential Change in Planned Total Procurement Quantity
The Navy and DOD have been working since 2019 to develop a new Navy force-level goal to
replace the Navy’s current 355-ship force-level goal that might or might not change the currently
planned total procurement quantity of 20 TAO-205s. The future mix of CLF ships is to include a
new class of ship, called the Next-Generation Logistics Ship (NGLS), that is to be smaller and
individually less expensive than the TAO-205 design.8 For additional discussion of Navy and
DOD efforts to develop a new Navy force-level goal to replacement the current 355-ship goal, see
the CRS overview report on Navy force structure and shipbuilding plans.9
Annual Procurement Quantities
The Navy procured the first TAO-205 in FY2016, and a total of eight have been procured through
FY2022, including the seventh and eighth in FY2022. The Navy’s five-year (FY2023-FY2027)
shipbuilding plan programs the procurement of six more TAO-205s in FY2023-FY2027, in
annual quantities of 1-2-1-1-1.
Unit Procurement Cost
Under the Navy’s FY2023 budget submission, the TAO-205s to be procured in the five-year
period FY2023-FY2027 have estimated unit procurement costs of $794.7 million, $678.9 million
(an average for the two ships programmed for procurement that year), $732.8 million, $746.8
million, and $764.0 million, respectively.
Builder
TAO-205s are being built by General Dynamics/National Steel and Shipbuilding Company
(GD/NASSCO) of San Diego, CA, a shipyard that builds Navy auxiliaries, DOD sealift ships,
and commercial cargo ships. The first ship in the class was delivered to the Navy on July 26,
2022.
Block Buy Contract
The first six TAO-205s were procured under a block buy contract that was authorized by Section
127 of the FY2016 National Defense Authorization Act (S. 1356/P.L. 114-92 of November 25,
2015). It was earlier estimated that the block buy contract would reduce the procurement cost of
the second through sixth TAO-205s by an average of about $45 million each, compared to costs
under the standard or default DOD approach of annual contracting.10 The Navy states that about

8 For more on the NGLS program, see CRS In Focus IF11674, Navy Next-Generation Logistics Ship (NGLS) Program:
Background and Issues for Congress, by Ronald O'Rourke.
9 CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by
Ronald O'Rourke.
10 The Senate Armed Services Committee, in its report (S.Rept. 114-49 of May 19, 2015) on the FY2016 National
Defense Authorization Act (S. 1376), stated
Fleet replenishment oiler program (sec. 118)
The committee recommends a provision [Section 118] that would grant the Secretary of the Navy
contracting authority to procure up to six fleet replenishment oilers (T–AO(X)). This new ship class
is a nondevelopmental recapitalization program based on existing commercial technology and
standards. The ship design is considered to be low risk by the Navy, with the design scheduled to
be complete prior to the start of construction on the lead ship. This provision would generate an
estimated $45.0 million in savings per ship compared to annual procurement cost estimates. In
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$35 million of the $45 million in per-ship savings will come from using advance procurement
(AP) funding for batch-ordering TAO-205 components. The Navy states that this use of AP
funding could have occurred under annual contracting, and that the savings that are intrinsic to
the block buy contract are thus about $10 million per ship.11
FY2021 and FY2022 Legislation Regarding U.S. Content Requirement for
Certain Components
Section 845 of the FY2021 National Defense Authorization Act (H.R. 6395/P.L. 116-283 of
January 1, 2021) states (emphasis added)
SEC. 845. MISCELLANEOUS LIMITATIONS ON THE PROCUREMENT OF GOODS
OTHER THAN UNITED STATES GOODS.
(a) IN GENERAL.—Section 2534 of title 10, United States Code, is amended—
(1) in subsection (a)—
(A) by striking paragraphs (2) through (5) and redesignating paragraph (6) as paragraph
(3);
(B) by inserting after paragraph (1) the following new paragraph:
‘‘(2) COMPONENTS FOR NAVAL VESSELS.—The following components of vessels,
to the extent they are unique to marine applications:
‘‘(A) Gyrocompasses.
‘‘(B) Electronic navigation chart systems.
‘‘(C) Steering controls.
‘‘(D) Propulsion and machinery control systems.
‘‘(E) Totally enclosed lifeboats.’’;
(C) in paragraph (3), as so redesignated, by striking ‘‘subsection (k)’’ and inserting
‘‘subsection (j)’’; and
(D) by adding at the end the following new paragraph:

addition, the provision would provide a long-term commitment to the shipbuilder and vendors,
which would enable workforce stability and planning efficiency. (Pages 11-12)
The committee print that includes the legislative text and joint explanatory statement for the enacted FY2016 National
Defense Authorization Act (S. 1356/P.L. 114-92 of November 25, 2015) stated
Fleet replenishment oiler program (sec. 127)
The Senate amendment contained a provision (sec. 118) that would grant the Secretary of the Navy
contracting authority to procure up to six fleet replenishment oilers (T–AO (X)). This new ship
class is a non-developmental recapitalization program based on existing commercial technology
and standards. The ship design is considered to be low risk by the Navy, with the design scheduled
to be complete prior to the start of construction on the lead ship. This provision would enable an
estimated $45.0 million in savings per ship, for ships 2–6, for a total of $225.0 million in savings
compared to current annual procurement cost estimates.
(114th Congress, 1st Session, Committee Print No. 2, National Defense Authorization Act for Fiscal
Year 2016, Legislative Text and Joint Explanatory Statement to accompany S. 1356, P.L. 114-92,
November 2015, Printed for the use of the Committee on Armed Services of the House of
Representatives, p. 608)
For more on block buy contracts, see CRS Report R41909, Multiyear Procurement (MYP) and Block Buy Contracting
in Defense Acquisition: Background and Issues for Congress, by Ronald O'Rourke and Moshe Schwartz.
11 Source: Navy briefing on TAO-205 program for CRS and CBO, April 12, 2019.
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‘‘(4) COMPONENTS FOR T–AO 205 CLASS VESSELS.—The following
components of T–AO 205 class vessels:
‘‘(A) Auxiliary equipment, including pumps, for all shipboard services.
‘‘(B) Propulsion system components, including engines, reduction gears, and
propellers.
‘‘(C) Shipboard cranes.
‘‘(D) Spreaders for shipboard cranes.’’;
(2) by amending subsection (b) to read as follows:
‘‘(b) MANUFACTURER IN THE NATIONAL TECHNOLOGY AND INDUSTRIAL
BASE.—A manufacturer meets the requirements of this subsection if the manufacturer is
part of the national technology and industrial base.’’;
(3) in subsection (c)—
(A) by striking ‘‘ITEMS.—’’ and all that follows through ‘‘Subsection (a) does not apply’’
and inserting ‘‘ITEMS.—Subsection (a) does not apply’’; and
(B) by striking paragraphs (2) though (5);
(4) in subsection (g)—
(A) by striking ‘‘(1) This section’’ and inserting ‘‘This section’’; and
(B) by striking paragraph (2);
(5) in subsection (h), by striking ‘‘subsection (a)(3)(B)’’ and inserting ‘‘subsection (a)(2)’’;
(6) in subsection (i)(3), by striking ‘‘Under Secretary of Defense for Acquisition,
Technology, and Logistics’’ and inserting ‘‘Under Secretary of Defense for Acquisition
and Sustainment’’;
(7) by striking subsection (j);
(8) by redesignating the first subsection designated subsection (k) (relating to ‘‘Limitation
on Certain Procurements Application Process’’) as subsection (j); and
(9) in subsection (k) (relating to ‘‘Implementation of Auxiliary Ship Component
Limitation’’), by striking ‘‘Subsection (a)(6)’’ and inserting ‘‘Subsection (a)(3)’’.
(b) REVIEW OF SELECT COMPONENTS.—The Secretary of the Defense shall expedite
the review period under paragraph (3)(B) of section 2534(j) of title 10, United States Code,
as redesignated by subsection (a), to not more than 60 days for applications submitted
pursuant to such section 2534(j) for the following components for auxiliary ships:
(1) Auxiliary equipment, including pumps, for all shipboard services.
(2) Propulsion system components, including engines, reduction gears, and propellers.
(3) Shipboard cranes.
(4) Spreaders for shipboard cranes.
Section 8103(a) of the FY2022 DOD Appropriations Act (Division C of H.R. 2471/P.L. 117-103
of March 15, 2022) states
SEC. 8103. (a) None of the funds provided in this Act for the TAO Fleet Oiler program
shall be used to award a new contract that provides for the acquisition of the following
components unless those components are manufactured in the United States: Auxiliary
equipment (including pumps) for shipboard services; propulsion equipment (including
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engines, reduction gears, and propellers); shipboard cranes; spreaders for shipboard cranes;
and anchor chains specifically for the seventh and subsequent ships of the fleet.
FY2023 Funding
The Navy’s proposed FY2023 budget requests $794.7 million for the procurement of the ninth
TAO-205 class ship and an additional $128.1 million in cost-to-complete procurement funding to
cover cost growth on TAO-205s procured in prior years.
Issues for Congress
Cost Growth and Schedule Delays
One issue for Congress concerns cost growth and schedule delays in the TAO-205 program. The
Navy informed CRS on August 31, 2021, that the estimated procurement cost of the lead ship in
the TAO-205 program had increased to $759.4 million12—an increase of $85.2 million, or 12.6%,
from the ship’s originally estimated and funded procurement cost of $674.2 million. The delivery
date for the ship has also been delayed. One cause of the cost growth and delivery delay is an
incident in July 2018 that flooded a graving dock (i.e., dry dock) at the TAO-205 shipbuilder,
GD/NASSCO.13 Other causes of cost growth include cyber security change orders that were not
provided in the original shipbuilding construction contract award, and cost growth in
government-furnished equipment (GFE) for the ship.14 The delivery dates for subsequent ships in
the program have also been delayed.
As noted earlier, cost growth in the TAO-205 program has required the Navy to request cost-to-
complete funding to cover cost growth on TAO-205s procured in prior years. The TAO-205
program has received a total of $145.7 million in cost-to-complete funding through FY2022. The
Navy’s proposed FY2023 budget, as noted earlier, requests an additional $128.1 million in cost-
to-complete funding, and the Navy’s FY2023 budget submission projects that an additional
$113.1 million and $12.6 million will be requested for FY2024 and FY2025, respectively. The
sum of all these figures is $399.549 million, which equates to roughly half the currently estimated
procurement cost of a TAO-205.
As noted later in this report, a June 2021 Government Accountability Office (GAO) report stated
that
A 2018 incident involving a flooded dry dock delayed and disrupted the shipbuilder’s
operations. With fewer ships under construction at one time, the shipyard must now
allocate the same fixed overhead costs over fewer ships....

12 Navy information paper on TAO-205 dated August 25, 2021, provided to CRS by Navy Office of Legislative Affairs
on August 31, 2021.
13 For press reports about the graving dock incident and its impacts on work being done at GD/NASSCO, see, for
example, Megan Eckstein, “NASSCO Drydock Floods, Damaging Under-Construction Expeditionary Sea Base,” USNI
News, July 13, 2018; David Larter, “Partial Dry-Dock Collapse Floods US Navy Ship Under Construction,” Defense
News, July 13, 2018; Tyler Rogoway, “Dry Dock Collapse In San Diego Floods Expeditionary Sea Base Under
Construction,” The Drive, July 13, 2018; Maritime Executive, “Graving Dock Failure at NASSCO Leads to Layoffs,”
Maritime Executive, August 14, 2018; Ben Werner, “Navy: Dry Dock Accident Will Set Back Miguel Keith
Construction At Least 6 Months,” USNI News, October 18, 2018.
14 Source: Navy FY2022 program briefing on TAO-205 program for CRS and Congressional Budget Office (CBO),
July 19, 2021.
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The program’s schedule continues to experience delays due to the events of the last two
years. As we reported last year, as a result of events that began with the 2018 flooding of
one of the shipbuilder’s dry docks, planned delivery of ships two through six slipped by 5
to 12 months. The incident did not affect the lead ship’s schedule, but the late delivery of
the ship’s main engines and certain other components delayed the lead ship’s delivery date
by 7 months.... 15
The Navy stated in July 2021 that the delivery date for TAO-205 has been delayed from June
2021 to March 2022 due to the graving dock incident, late delivery of outfitting materials, and a
need to repair or carry out rework on other parts of the ship, and that the delivery dates of the
second through sixth ships in the class have been delayed by 12 to 15 months due to the graving
dock incident, late delivery of materials, throughput delays caused by delays in building the first
ship, and impacts from the COVID-19 situation.16
Number of TAO-205s to Procure in FY2023
Another issue for Congress is whether to procure in FY2023 one TAO-205 class ship (as
requested), no TAO-205 class ship, or two TAO-205s. In assessing this issue, Congress may
consider various factors, including the following:
 the expected service lives and scheduled retirement dates of the existing TAO-
187 class oilers;
 construction times for new TAO-205s;
 potential changes in the required number of oilers (see next section);
 shipyard workloads and employment levels at GD/NASSCO;
 the amount of funding that would be needed to procure one or two TAO-205s in
FY2023; and
 competing Navy or other DOD uses for such funding.
From FY2016 through FY2022, annual TAO-205 procurement quantities have been as follows: 1-
0-1-2-2-0-2. As part of its action on the Navy’s proposed FY2022 budget, Congress funded the
procurement of two TAO-205s—one more than the single TAO-205 that the Navy had requested
for procurement for FY2022.
Multiyear Procurement (MYP) or Block Buy Contracting
Another issue for Congress is whether to procure TAO-205s in FY2023 and subsequent years
under a multiyear procurement (MYP) or block buy contract. MYP and block buy contracting are
two types of multiyear contracting. As discussed in the CRS report on MYP and block buy
contracting, using MYP or block buy contracting can reduce the combined procurement cost of
the ships being procured, but can also reduce Navy and congressional flexibility for responding to
changes in strategic or budgetary circumstances that might affect Navy shipbuilding plans.17

15 Government Accountability Office, Weapon Systems Annual Assessment[:] Updated Program Oversight Approach
Needed, p. 189.
16 Source: Navy FY2022 program briefing on TAO-205 program for CRS and Congressional Budget Office (CBO),
July 19, 2021.
17 See CRS Report R41909, Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition:
Background and Issues for Congress, by Ronald O'Rourke.
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At an April 26, 2022, hearing on Navy and Marine Corps investment programs before the
Seapower subcommittee of the Senate Armed Services Committee, the Department of the Navy
witnesses were asked about the savings that might be realized by using Economic Order Quantity
(EOQ) purchasing (a feature of MYP contracting and some block buy contracts) for procuring
TAO-205s to be procured in FY2023 and subsequent years. A Navy official replied that the Navy
had estimated a 7% savings for using a block buy contract to procure a certain group of four
amphibious ships (three LPD-17 Flight II class amphibious ships and one LHA-type amphibious
assault ship),18 and that the percentage savings for a group of TAO-205s could be higher, since the
ships to be procured in this case would all be of the same class, which would maximize the
potential for achieving savings through batch-ordering of common components.19
Total Required Number of TAO-205s
Another issue for Congress concerns the total number of TAO-205s the Navy will require in
coming years to support its operations. As mentioned earlier, the Navy and DOD have been
working since 2019 to develop a new Navy force-level goal to replace the Navy’s current 355-
ship force-level goal, and the future mix of CLF ships is to include a new class of ship, called the
Next-Generation Logistics Ship (NGLS). The Navy is implementing a new operational concept,
called Distributed Maritime Operations (DMO), that could lead to the development of a fleet with
larger numbers of individually smaller ships, and to more-widely dispersed Navy operations.
DMO could affect requirements for Navy logistics, including oilers. The Navy states that
To support a larger, more distributed force, increased numbers of T-AOs and NGLS
platforms improve resiliency of the logistics force. The final CLF force size and mix will
continue to evolve pending the NGLS AoA [analysis of alternatives] and additional
studies.... 20
Issues Discussed in June 2022 GAO Report
A June 2022 GAO report—the 2022 edition of an annual GAO report assessing major DOD
acquisition programs—stated the following about the TAO-205 program:
Technology Maturity, Design Stability, and Production Readiness
All Lewis class critical technologies were mature and the design was stable prior to
construction start in 2018. However, over the past year, the program experienced
challenges that led to further delays in the planned delivery dates for the first two ships.
We reported last year that the lead ship’s planned delivery date was delayed by 7 months
to June 2021. Over the past year, additional issues further delayed the planned delivery to
March 2022. Program officials attributed these delays to four factors:
• High levels of rework, which the program stated is normal for a first-of-class ship.
• Late deliveries related to materials.
• Propulsion faults that required the ship to be dry-docked from March 2021 to May 2021.

18 For additional discussion of the authority that Congress granted for using such a contract, see CRS Report R43543,
Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for Congress, by Ronald
O'Rourke.
19 Source: Spoken testimony at the hearing of Frederick J. Stefany, Principal Civilian Deputy, Assistant Secretary of the
Navy (Research, Development and Acquisition), Performing the Duties of the Assistant Secretary of the Navy
(Research, Development and Acquisition).
20 U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2023, April 2022, p. 5.
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• COVID-19 caused the shipyard’s absentee rate to spike in fall 2020 to nearly 20 percent.
Program officials stated that the delay in the lead ship’s planned delivery affected other
program events. For example, the planned date for operational testing slipped by 9 months
(from January to October 2022) and planned initial operational capability slipped by 3
months (from February to May 2023). As a result, the planned date for the full-rate
production decision was delayed by 14 months. These issues, among others, also led to a
12- to 15-month delivery delay for each of the remaining five ships under contract.
The program is experiencing cost growth that program officials reported will be borne by
both the shipbuilder and the government. Among other factors, the program attributed
recent cost growth to Economic Price Adjustments for labor and material costs. We
previously reported that the program experienced cost overruns for higher-than-expected
inflation, especially for materials like steel, due to increased tariffs. The program estimates
the first and second ships will exceed their original target costs. Program officials stated
that the parties will share costs to a target amount, but the government will not pay an
amount above the contract ceilings for the ships except for Economic Price Adjustments.
The program is actively working on cost reduction initiatives through a Cost Reduction
Working Group. As of January 2022, the Navy funded and implemented 91 cost savings
initiatives. The Navy projects that the program’s return on investment from these initiatives
will be significant over the life span of the program.
Software and Cybersecurity
The program reported it does not have any software development efforts and that its
software is almost entirely commercial-off-the-shelf. The program satisfied all cyber
requirements and received its Authorization to Operate on October 7, 2021.
Program officials stated that they anticipate potential cost growth related to cybersecurity
in the future as a result of DOD’s Cybersecurity Maturity Model Certification
requirements. They told us that the magnitude of the cost growth is unclear at this point but
will not affect the cost of any ships currently under contract.
Other Program Issues
For the seventh ship, the Navy now plans to award a contract modification on a sole-source
basis to the current T-AO 205 contractor. The Navy included up to six ships in its original
contract and originally planned to purchase future ships through competitively awarded
contracts. According to the program office, its original approach was intended to allow the
program to receive more detailed production information developed through
manufacturing the first ship before competing future procurements. The program office
noted that the Navy is currently analyzing its acquisition strategy to award follow-on
vessels, which may involve a combination of sole-source or competitive contract awards
and will consider the Navy’s requirement for deactivating the existing class of Fleet
Replenishment Oilers.
Program Office Comments.
We provided a draft of this assessment to the program office for review and comment. The
program office provided technical comments, which we incorporated where appropriate.
According to the program office, the program continues to follow shipbuilding best
practices along with leveraging commercial vessel design practices to minimize risks,
reduce ship costs, and drive affordability into the design. The program office noted that
while the program experienced cost growth, the program office and the shipbuilder
continue to look for additional opportunities to reduce costs in the design while balancing
life-cycle costs and fleet requirements. Additionally, it stated that the lead ship of the class
completed a series of in-port and at-sea demonstrations in early February 2022. Finally,
the program office stated that the Navy is working with the shipbuilder on the delivery of
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all ships under contract as COVID-19 continues to affect the shipbuilder’s workforce and
supply chain.21
TAO-205 Ship Self-Defense Equipment
Another issue for Congress is whether to encourage or direct the Navy to build TAO-205s with
more ship self-defense equipment than currently planned by the Navy. The issue relates to how
changes in the international security environment might affect how the Navy operates and equips
its underway replenishment ships. For additional background information on this issue, see
Appendix A.
Legislative Activity for FY2023
Summary of Congressional Action on FY2023 Funding
Table 1 summarizes congressional action on the Navy’s request for FY2023 procurement and
advance procurement (AP) funding for additional TAO-205s. The Navy’s proposed FY2023
budget requests $794.7 million for the procurement of the ninth TAO-205 class ship and an
additional $128.1 million in cost-to-complete procurement funding to cover cost growth on TAO-
205s procured in prior years.
Table 1. Congressional Action on FY2023 Funding for Additional TAO-205s
Millions of dollars, rounded to nearest tenth
Authorization
Appropriation

Request
HASC
SASC
Enacted
HAC
SAC
Enacted
Procurement
794.7
1,540.7
794.7

794.7
782.6

Advance procurement (AP)
0
0
0

0
0

Cost-to-complete
128.1
128.1
128.1

128.1
128.1

(Quantity)
(1)
(2)
(1)

(1)
(1)

Source: Navy FY2023 budget submission, committee and conference reports, and explanatory statements on
FY2023 National Defense Authorization Act and FY2023 DOD Appropriations Act.
Notes: HASC is House Armed Services Committee; SASC is Senate Armed Services Committee; HAC is
House Appropriations Committee; SAC is Senate Appropriations Committee. Cost-to-complete funding, also
known as completion of PY (prior-year) shipbuilding programs, is funding for the completion of ships procured in
prior fiscal years. Cost-to-complete funding is generally provided to cover cost growth on prior-year-funded
ships.
FY2023 National Defense Authorization Act (H.R. 7900/S. 4543)
House
The House Armed Services Committee, in its report (H.Rept. 117-397 of July 1, 2022) on H.R.
7900, recommended the funding levels and ship quantity shown in the HASC column of Table 1.

21 Government Accountability Office, Weapon Systems Annual Assessment[:] Challenges to Fielding Capabilities
Faster Persist, GAO-22-105230, p. 184.
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Senate
The Senate Armed Services Committee, in its report (S.Rept. 117-130 of July 18, 2022) on S.
4543, recommended the funding levels and ship quantity shown in the SASC column of Table 1.
Section 124 of S. 4543 as reported by the committee states
SEC. 124. PROCUREMENT AUTHORITIES FOR JOHN LEWISCLASS FLEET
REPLENISHMENT OILER SHIPS.
(a) CONTRACT AUTHORITY.—
(1) PROCUREMENT AUTHORIZED.—In fiscal year 2023 or 2024, the Secretary of the
Navy may enter into one or more contracts for the procurement of not more than eight John
Lewis-class fleet replenishment oiler ships.
(2) PROCUREMENT IN CONJUNCTION WITH EXISTING CONTRACTS.—The
ships authorized to be procured under paragraph (1) may be procured as additions to
existing contracts covering such program.
(b) CERTIFICATION REQUIRED.—A contract may not be entered into under subsection
(a) unless the Secretary of the Navy certifies to the congressional defense committees, in
writing, not later than 30 days before entry into the contract, each of the following, which
shall be prepared by the milestone decision authority for such program:
(1) The use of such a contract is consistent with the Department of the Navy’s projected
force structure requirements for such ships.
(2) The use of such a contract will result in significant savings compared to the total
anticipated costs of carrying out the program through annual contracts. In certifying cost
savings under the preceding sentence, the Secretary shall include a written explanation
of—
(A) the estimated end cost and appropriated funds by fiscal year, by hull, without the
authority provided in subsection (a);
(B) the estimated end cost and appropriated funds by fiscal year, by hull, with the authority
provided in subsection (a);
(C) the estimated cost savings or increase by fiscal year, by hull, with the authority
provided in subsection (a);
(D) the discrete actions that will accomplish such cost savings or avoidance; and
(E) the contractual actions that will ensure the estimated cost savings are realized.
(3) There is a reasonable expectation that throughout the contemplated contract period the
Secretary of the Navy will request funding for the contract at the level required to avoid
contract cancellation.
(4) There is a stable design for the property to be acquired and the technical risks associated
with such property are not excessive.
(5) The estimates of both the cost of the contract and the anticipated cost avoidance through
the use of a contract authorized under subsection (a) are realistic.
(6) The use of such a contract will promote the national security of the United States.
(7) During the fiscal year in which such contract is to be awarded, sufficient funds will be
available to perform the contract in such fiscal year, and the future-years defense program
(as defined under section 221 of title 10, United States Code) for such fiscal year will
include the funding required to execute the program without cancellation.
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(c) AUTHORITY FOR ADVANCE PROCUREMENT.—The Secretary of the Navy may
enter into one or more contracts for advance procurement associated with a ship or ships
for which authorization to enter into a contract is provided under subsection (a), and for
systems and subsystems associated with such ships in economic order quantities when cost
savings are achievable.
(d) CONDITION FOR OUT-YEAR CONTRACT PAYMENTS.—A contract entered into
under subsection (a) shall provide that any obligation of the United States to make a
payment under the contract for a fiscal year is subject to the availability of appropriations
for that purpose for such fiscal year.
(e) MILESTONE DECISION AUTHORITY DEFINED.—In this section, the term
‘‘milestone decision authority’’ has the meaning given the term in section 4251(d) of title
10, United States Code.
FY2023 DOD Appropriations Act (H.R. 8236/S. 4663)
House
The House Appropriations Committee, in its report (H.Rept. 117-388 of June 24, 2022) on H.R.
8236, recommended the funding levels and ship quantity shown in the HAC column of Table 1.
Section 8099(a) of H.R. 8236 as reported by the committee states
SEC. 8099. (a) None of the funds provided in this Act for the TAO Fleet Oiler program
shall be used to award a new contract that provides for the acquisition of the following
components unless those components are manufactured in the United States: Auxiliary
equipment (including pumps) for shipboard services; propulsion equipment (including
engines, reduction gears, and propellers); shipboard cranes; spreaders for shipboard cranes;
and anchor chains specifically for the seventh and subsequent ships of the fleet.
Senate
The explanatory statement for S. 4663 released by the Senate Appropriations Committee on July
28, 2022, recommended the funding levels and ship quantity shown in the SAC column of Table
1. The recommended reduction of $12.131 in procurement funding is for “Excessive cost
growth.” (Page 114)
Section 8100(a) of S. 4663 as released by the committee on July 28, 2022, states:
SEC. 8100. (a) None of the funds provided in this Act for the TAO Fleet Oiler program
shall be used to award a new contract that provides for the acquisition of the following
components unless those components are manufactured in the United States: Auxiliary
equipment (including pumps) for shipboard services; propulsion equipment (including
engines, reduction gears, and propellers); shipboard cranes; spreaders for shipboard cranes;
and anchor chains, specifically for the seventh and subsequent ships of the fleet.

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Appendix A. TAO-205 Ship Self-Defense
Equipment
This appendix provides additional background information on the issue of whether to encourage
or direct the Navy to build TAO-205s with more ship self-defense equipment than currently
planned by the Navy.
During the Cold War, the Navy procured underway replenishment ships to support a two-stage
approach to underway replenishment in which single-product “shuttle” ships (such as oilers,
ammunition ships, and dry stores ships) would take their supplies from secure ports to relatively
safe mid-ocean areas, where they would then transfer them to multiproduct “station” ships called
TAOEs and AORs. The TAOEs and AORs would then travel to Navy carrier strike groups
operating in higher-threat areas and transfer their combined supplies to the carrier strike group
ships. As a result, single-product shuttle ships were equipped with lesser amounts of ship self-
defense equipment, and TAOEs and AORs were equipped with greater amounts of such
equipment.
When the Cold War ended and transitioned to the post-Cold War era, threats to U.S. Navy ships
operating at sea were substantially reduced. As a consequence, the amount of ship self-defense
equipment on the TAOEs and AORs was reduced, and a single-stage approach to underway
replenishment, in which oilers and dry stores ships took supplies from secure ports all the way to
carrier strike group ships, was sometimes used.
Now that the post-Cold War era has transitioned to a new strategic environment featuring
renewed great power competition with countries like China and Russia,22 and a consequent
renewal of potential threats to U.S. Navy ships operating at sea, the question is whether TAO-
205s should be equipped with lesser amounts of ship self-defense equipment, like oilers were
during both the Cold War and post-Cold War eras, or with greater amounts of ship self-defense
equipment, like TAOEs and AORs were during the Cold War. Building TAO-205s with more ship
self-defense equipment than currently planned by the Navy could increase TAO-205 procurement
costs by tens of millions of dollars per ship, depending on the amount of additional ship self-
defense equipment.
Section 1026 of the FY2016 National Defense Authorization Act (S. 1356/P.L. 114-92 of
November 25, 2015) required an independent assessment of the Navy’s combat logistics force
ships. The report was delivered to Congress in February 2016. A copy of the report was posted by
the media outlet Politico on March 11, 2016. The report states the following:
The T-AO(X) will only have a limited capability to defeat a submarine launched torpedo
attack and no capability to defeat a missile attack. When delivered, the TAO(X) will have:
—[the] NIXIE Torpedo Countermeasure System [for decoying certain types of torpedoes]
—[the] Advanced Degaussing System (Anti-Mine) [for reducing the ship’s magnetic
signature, so as to reduce the likelihood of attack by magnetically fused mines]
When required, the T-AO(X) will also have ability to embark Navy Expeditionary Combat
Command Expeditionary Security Teams (EST). The ESTs will embark with several crew
served weapons and are designed to provide limited self-defense against a small boat
attack.

22 For more on this transition, see CRS Report R43838, Renewed Great Power Competition: Implications for Defense—
Issues for Congress, by Ronald O'Rourke.
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The T-AO(X) will have Space, Weight, Power and Cooling (SWAP-C) margins for future
installations of the following systems:
—[the] Close In Weapon System (CIWS) or SeaRAM (Rolling Airframe Missile) [for
defense against missile attack]
—[the] Anti-Torpedo Torpedo Defense System (ATTDS) [for destroying torpedoes]
Even after the installation of a CIWS or ATTDS, if the T-AO(X) was to operate in anything
other than a benign environment, the ship will require both air and surface escorts.
The decision to rely on [other] Fleet assets to provide force protection [i.e., defense against
attacks] for the T-AO(X) was validated by the JROC [in June 2015].23

Author Information

Ronald O'Rourke

Specialist in Naval Affairs

Disclaimer
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23 Department of the Navy, Report to Congress on Requirements for the Fleet Replenishment Oiler, T-AO(X), February
2016 (with cover letter dated February 12, 2016), p. 8. The report was posted by Politico on March 11, 2016, at
http://static.politico.com/1e/e0/f26a9fb1471aacd5358c420fcf10/navy-oiler-report.pdf, and accessed by CRS on March
15, 2016.
Congressional Research Service
R43546 · VERSION 98 · UPDATED
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