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Navy Exercises Option for Fourth T-AKE Ship, Awarding $288 Million Contract to NASSCO

SAN DIEGO, CA – National Steel and Shipbuilding Company (NASSCO), a wholly owned subsidiary of General Dynamics (NYSE: GD), announced today that the U.S. Navy has exercised an option to build a fourth ship for the T-AKE program, a new class of combat logistics force ships, at a contract value of $288 million.

The company was awarded a $709 million contract in October 2001 for the design and construction of the first two ships in the T-AKE program. The Navy exercised its option for the third ship, to be built at a value of $290 million, in July 2002. With exercise of the fourth ship option, the total value of the program is $1.3 billion. NASSCO’s T-AKE contract has options exercisable by the Navy for eight additional ships over the next five years, for a potential contract value of approximately $3.7 billion. Functional design work on the T-AKE 1, which has been designated the Lewis and Clark class, is approximately 90 percent complete. Construction of the first ship will begin in September with delivery scheduled for 2005.

“The T-AKE is the first new Navy combat logistics force ship design in almost 20 years and is the first to combine lower-cost commercial design rules and specifications with high-performance, proven international marine technologies such as integrated electric-drive propulsion,” said Richard Vortmann, president of NASSCO. “The T-AKE will benefit directly from NASSCO’s ongoing commercial shipbuilding programs and its long history of building auxiliary and support ships for the Navy,” he added.

NASSCO recently delivered the first of two roll-on/roll-off trailerships under contract to Totem Ocean Trailer Express, Inc. (TOTE), and is building four double-hull tankers for BP Shipping Company of Alaska.

The T-AKE is a dry cargo/ammunition ship that will be operated by the Military Sealift Command, providing logistic lift from sources of supply either in port or at sea and will transfer cargo – ammunition, food, fuel, repair parts, and expendable supplies and material – to station ships and other naval forces at sea. The T-AKE will contribute to the Navy’s ability to maintain its global presence, replacing aging T-AE ammunition ships and T-AFS combat stores ships that are nearing the end of their service lives.

The T-AKEs will be 210 meters (689 feet) in length and 32.2 meters (105.6 feet) in beam, with a design draft of 9.12 meters (29.9 feet). The ships will carry almost 7,000 metric tons of dry cargo and ammunition and 23,500 barrels of marine diesel fuel. The T-AKEs will be the first modern Navy ships with an integrated electric-drive propulsion system, and have been designed to maximize cargo-handling efficiency and minimize the costs of operation and maintenance over their expected 40-year life.

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 57,000 people worldwide and anticipates 2003 revenues of $15 billion. The company has leading market positions in mission-critical information systems and technologies, land and amphibious combat systems, shipbuilding and marine systems, and business aviation.

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Any "forward-looking statements" contained in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

General Dynamics Corporation (ticker: GD, exchange: NYSE)
News Release -Monday, July 21, 2003
Press Contact: (619) 544-7708