The U.S. Navy on Monday announced it has awarded a $2.2 billion contract to TOTE Services LLC, Jacksonville, Fla., to serve as vessel construction manager (VCM) for the Navy's new Medium Landing Ship (LSM) program.
Under the contract, TOTE Services will oversee construction subcontracts for an initial batch of up to eight McClung-class LSMs. The Navy has directed the company to execute and manage subcontracts with Bollinger Shipyards, Lockport, La., for one vessel and Fincantieri Marinette Marine, Marinette, Wis., for four vessels. TOTE Services will have flexibility to determine the award strategy for up to three additional ships in that initial batch.
As VCM, TOTE Services will hold the prime contract directly with the Portfolio Acquisition Executive for Maritime (PAE Maritime), giving it contractual responsibility for issuing and managing the shipyard subcontracts and putting it in direct control of shipyard performance. The company said it will soon begin issuing requests for proposals to qualified U.S. shipyards and will move forward with shipyard selection, supplier engagement, construction planning, and program mobilization.
The first LSM is expected to be delivered in fall 2029. The full program calls for a 35-ship fleet.
The Navy said the arrangement, combined with a proven ship design from Damen Shipyards Group, Gorinchem, Netherlands, is intended to reduce cost and schedule risk and reflects a broader shift toward commercial acquisition practices.
"The VCM strategy is an innovative shift in Navy shipbuilding. We are changing the way we do business, and leveraging commercial best practices to improve cost, schedule, and performance," said Will Mahan, performing the duties of assistant secretary of the Navy for research, development, and acquisition. "With a five-month duration between RFP release and contract award, we achieved a nearly 50% reduction to traditional contracting timelines. This reflects the immediate impact our Portfolio Acquisition Executives are having to accelerate shipbuilding."
"We're taking a proven design and leveraging congressional authorities to move with urgency and approach shipbuilding differently," said Christopher Miller, portfolio acquisition executive for Maritime. "TOTE Services will be an important partner, and we're excited to work with them to continue the momentum on this program and begin bending steel."
TOTE Services — part of the TOTE Group, Jacksonville, a transportation and logistics company and member of the Saltchuk, Seattle, family of companies — was the sole bidder for the LSM VCM contract, according to the Pentagon.
The company previously served as VCM for the National Security Multi-Mission Vessel (NSMV) program for the U.S. Maritime Administration, a five-ship effort in which the company oversaw shipyard selection, design, construction, testing, delivery, and lifecycle logistics. Three of those vessels have been delivered from Hanwha Philly Shipyard, Philadelphia, with the remaining ships expected within the next 12 months.
Jeff Dixon, president of TOTE Services, called the LSM award a major milestone for the company and for the VCM contracting model.
"This is a tremendous responsibility and a defining moment for American shipbuilding, the VCM model, and TOTE Services," Dixon said. "We are grateful to PAE Maritime, the Marine Corps, Congress, and the many government leaders who have championed this important program and helped bring the VCM model to a mission of national importance. We look forward to collaborating with and supporting PAE Maritime as we work together on LSM. The U.S. is counting on this program to succeed, and our job is clear: steward the work responsibly, cultivate the best talent and expertise, move with urgency, and deliver for the American people."
"The shipyards building these vessels are central to the success of the LSM program, and we are ready to support them every step of the way," said Chris Clark, vice president of new construction at TOTE Services. "Our commitment is to provide the clarity, consistency, and support our industry partners need to do what they do best: deliver high-quality ships for the American people."
TOTE Services said it will subcontract with several firms to support technical execution of the program, including Leidos Gibbs & Cox, Arlington, Va.; The McHenry Management Group, Chesapeake, Va.; MAD Security, Huntsville, Ala., and Damen.
Matthew Paxton, president of the trade group Shipbuilders Council of America, pointed to the NSMV program as evidence that the VCM approach can work at scale.
"The VCM model shows what is possible when government requirements are paired with commercial shipbuilding practices and sustained investment in American shipyards and maritime workers," Paxton said. "The success of the NSMV program has created a strong foundation for expanding domestic shipbuilding capacity and delivering the ships our nation needs."
The 328'1"x52'6" McClung-class LSM is designed to support U.S. Marine Corps distributed operations and littoral maneuvers, providing the ability to rapidly move and sustain forces in contested coastal environments. Each ship will have capacity for 500 metric tons of cargo and up to 282 troops.
The program began as the Light Amphibious Warship in 2020, but early industry bids for a custom design exceeded $350 million per hull. In 2024, the Navy pivoted to a commercial off-the-shelf design to cut costs and accelerate production. In December 2025, the LST 100 design from Damen was selected as the technical basis for the class.
The award is among the first major contracts issued under the Navy's centralized Portfolio Acquisition Executive structure for Maritime, which consolidates authority over surface ship acquisition under a single organization. The PAE model was established as part of a broader Navy effort to streamline shipbuilding oversight and speed delivery of combat-ready vessels amid rising competition with China's expanding naval fleet.
