Attorneys play a major role in TOTE Services’ contract with Philly Shipyard

Cozen O’Connor announced the successful execution of a major ship building contract worth up to $1.5 billion between its client, TOTE Services LLC (TOTE Services) an affiliate of TOTE, LLC (TOTE), and an industry leader in ship management, marine operations, and vessel services, and Philly Shipyard Inc., (Philly Shipyard) one of the country’s leading shipbuilders and the sole operating subsidiary of Philly Shipyard ASA.

The contract, developed with guidance from Jeff R. Vogel and Anne E. Mickey of Cozen O’Connor’s Transportation & Trade practice, covers the construction of a new class of vessel, the National Security Multi-Mission Vessel (NSMV). A major financial boost to the greater-Philadelphia economy, the agreement covers the construction of up to five NSMVs and brings a projected 1,200 skilled shipbuilding jobs to Philly Shipyard.

TOTE Services was selected by the U.S. Department of Transportation’s Maritime Administration (MARAD) in May 2019 to be the Vessel Construction Manager (“VCM”) for the NSMV program to ensure the utilization of best practices in commercial ship construction. TOTE Services placed an initial order with Philly Shipyard for the first two vessels (NSMVs 1 and 2)— with deliveries scheduled for Spring and Winter 2023 — while retaining options for the other three vessels. The approximate contract value of the first two ships is $630 million.

“I can’t say enough about the experience and support Cozen O’Connor brought to the table,” said TOTE General Counsel Joe Misenti. “Jeff and Anne provided invaluable guidance, especially with regard to the intricacies of MARAD’s contracting requirements. Their attention to detail resulted in a major win for TOTE Services, MARAD, Philly Shipyard and the city of Philadelphia.”

The NSMV series will replace the current training ships at state maritime academies in New York, Massachusetts, Maine, Texas and California. The new vessel class will be owned by MARAD and will include state-of-the-art training facilities and the latest in maritime technological advancements with space to train up to 600 cadets at sea, maximizing the ship’s capabilities and its mission to provide future mariners with a world-class education. It also features modern hospital facilities, a helicopter pad and the ability to accommodate up to 1,000 people to support humanitarian assistance and disaster relief (HA/DR) operations in times of need.

“This is an important project, not just for Philadelphia, but for our national security industrial base,” says Jeffrey F. Lawrence, chair of Cozen O’Connor’s Transportation & Trade practice. “These vessels will promote growth of our nation’s domestic shipbuilding industry while also addressing a critical shortage of qualified officers needed to crew commercial and government-owned sealift ships during crises. We’re thrilled to support TOTE Service’s mission and MARAD’s vision to build a capable training and HA/DR platform.”