WASHINGTON — Maritime company TOTE Services has selected Hanwha Defense USA (HDUSA) for the Navy and Marine Corps’ Landing Ship Medium (LSM) program, the company announced today, in the first-ever award under a new setup for Navy acquisition.
The award, worth $269 million for one LSM vessel built at Hanwha Philly Shipyard, marks the first shipyard selection from TOTE Services as the vessel construction manager of the LSM program for the Navy, and the first US Navy contract for HDUSA. The contract also includes options for up to three additional vessels.
“Since acquiring Philly Shipyard in 2024, Hanwha has made significant investments in its workforce and technology to pave the way to build ships for the U.S. Navy and other federal customers,” HDUSA President and CEO Michael Coulter said in a statement today. “PAE (Portfolio Acquisition Executive) Maritime has made it clear this program is a priority for the U.S. Navy and Marine Corps, and Hanwha looks forward to working with TOTE Services to ensure an on-time and on-budget delivery.”
The VCM model is common in commercial shipbuilding, but is a new one for Navy shipbuilding. The Navy announced in July that TOTE would serve as the service’s first VCM, as part of a $2.2 billion contract award the Navy said aimed to “maximize commercial practices to accelerate delivery, improve cost discipline, and expand the U.S. shipbuilding industrial base.”
According to the Navy, the VCM serves as the prime contractor and therefore carries direct contractual oversight of construction and delivery for the LSM. Hanwha’s selection comes after TOTE had put out a request for proposals in July.
“This award shows the speed at which the VCM model can move from RFP to contract,” Jeff Dixon, president of TOTE Services, said in a statement today. “Through a competitive process, we secured strong terms that benefit the government, along with build positions that allow construction to start in the fourth quarter of 2027.”
Prior to the Navy selecting TOTE Services as VCM for the LSM, the service had tapped Bollinger Shipyards to construct the initial LSM and awarded a contract to Fincantieri Marinette Marine for long-lead time materials for another four vessels. TOTE said today that it’s engaged in “productive contract discussions” with both these shipyards, and that they are still “expected to play a meaningful role in building the LSM fleet,” according to a news release.
Fincantieri Marine Group CEO, George Moutafis, said that the company is committed to the LSM program, and that the previous contract for materials “provides a critical foundation for our role.”
“Our focus now is on securing the right agreement, one that gives the Navy, the VCM and our shipbuilders an executable program, clear requirements, a realistic schedule and the conditions to deliver successfully,” Moutafis said in a statement. “With our experienced American workforce, our undeniable capacity and our end-to-end expertise, we are ready to support our fellow shipbuilders and to lead in any way that the VCM may call us to.”
The Navy and Marine Corps revealed in December 2025 that the foundation for the LSM program was derived from a ship design from Dutch shipbuilder Damen. The ship aims to haul Marines and their equipment through island chains in the Indo-Pacific region.
While the Navy said in July that the first LSM was slated for delivery in 2029, TOTE’s announcement today claims the first vessel’s delivery is now expected in 2030.
TOTE is familiar with the VCM model and is also the VCM for the National Security Multi-Mission Vessel program for the US Maritime Administration. Hanwha also builds those vessels.
Ownership Stakes At Philly
Today’s news comes days after Hanwha Defense USA unveiled plans to acquire a controlling stake in Hanwha Philly Shipyard, which Hanwha had purchased in December 2024.
Currently, Hanwha Systems has a 60 percent stake, with Hanwha Ocean holding the remaining 40 percent, according to a news release from Tuesday. It was not clear from the release how much of a percentage Hanwha Defense would actually have, but it is apparently large enough that the yard will now operate under the leadership of the Korean-giant’s defense arm, with Tom Anderson, a retired US Navy rear admiral, overseeing the shipyard.
“As Hanwha Defense USA continues to grow its multi-domain presence across the U.S., bringing the Philly Shipyard under HDUSA will further align our government and commercial shipbuilding efforts,” said Coulter in a statement. “We look forward to continuing to invest in our Philly Shipyard facilities and workforce in preparation for exciting work ahead.”
UPDATED 3:30 p.m. EST: This story has been updated with comments from Fincantieri Marine Group.
