Oceaneering International, Inc. (OII Quick QuoteOII - Free Report) has secured a major firm-fixed-price, indefinite-delivery/indefinite-quantity (“IDIQ”) contract from the United States Navy. Valued at $33,134,365, this contract, designated as N64498-25-D-4007, is a strategic acquisition that will supply critical infrastructure and mission-specific equipment for the Navy’s fleet of Virginia-class submarines.

The contract award is a significant achievement for Oceaneering, reflecting both its engineering prowess and long-standing relationship with the Department of Defense. This also demonstrates continued U.S. investment in the modernization and readiness of one of the most advanced classes of attack submarines in naval history.

Key Deliverables Under the Contract

As part of the agreement, Oceaneering is tasked with producing and delivering a series of specialized components that serve core operational functions on Virginia-class submarines. The contract includes sail racetracks, payload tube loading platforms and all-up-round (“AUR”) canister special support equipment ladder kits with associated custom shipping crates.

These components are designed to integrate seamlessly with the submarines' modular architecture. The sail racetrack system, in particular, supports enhanced movement and storage solutions in the sail section of the vessel, ensuring optimal access and operability. Payload tube loading platforms contribute to faster, safer reloading of mission-specific payloads, while the canister support equipment ensures efficient logistics, protection and deployment of ordnance. Each piece of equipment must meet stringent Navy specifications for durability, performance under pressure and operational reliability in extreme underwater conditions.

Strategic Execution in Chesapeake, VA

All production and logistics operations related to this contract will take place in Chesapeake, VA. This location not only offers proximity to the Norfolk naval base and other essential U.S. Navy infrastructure, but it also provides access to a skilled maritime and defense-focused labor force. The work is scheduled to be completed by June 2030, representing a sustained period of collaboration between Oceaneering and the U.S. Navy.

The long-term nature of this contract allows for consistent quality control, efficient output scaling and integration of evolving naval requirements over time. It also positions Chesapeake as a strategic industrial site supporting the United States' underwater warfare capabilities.

Funding and Financial Allocation

Initial funding of $2,085,151 from Fiscal Year 2025 Other Procurement (Navy) funds has been obligated to kick-start the project. These funds are structured to remain active beyond the end of the current fiscal year, ensuring that the financial base for the contract remains stable and actionable through the multi-year production timeline.

This structure allows OII to efficiently allocate resources and infrastructure without interruption, enabling seamless execution and on-time delivery for all contract deliverables.

Contract Award Through Competitive Procurement

The contract was awarded through a transparent and competitive procurement process conducted via the System for Award Management portal. OII emerged as the leading bidder out of five competitors, strengthening its status as a preferred partner of the Navy.

The contract selection and oversight fall under the purview of the Naval Surface Warfare Center, Philadelphia Division (NSWC Philadelphia), which is responsible for the development and deployment of ship systems for both surface vessels and submarines. This division plays a critical role in ensuring that vendors meet strict military standards and performance expectations.

Implications for the Virginia-Class Submarine Program

The Virginia-class submarine fleet represents the cutting edge of the U.S. Navy's undersea warfare capabilities. Designed for deep-sea, open-ocean and littoral missions, these submarines are equipped with state-of-the-art sensors, weaponry and propulsion systems. The components supplied under this contract will directly support the operational versatility and combat readiness of the fleet.

Sail racetracks, payload tube platforms and AUR canister equipment ensure that Virginia-class submarines can carry out a broad range of missions, from strategic deterrence to intelligence gathering and special operations deployment, without compromising performance or efficiency. These additions will enhance the submarines’ ability to deploy payloads quickly, maintain stealth and operate in hostile environments for extended periods.

The new support structures will also streamline onboard logistics, improve handling safety and reduce turnaround time for maintenance and resupply operations, thereby maximizing mission availability. In effect, this contract will provide both immediate tactical advantages and long-term strategic enhancements to the Navy's most versatile attack submarine class.

Oceaneering's Enduring Contribution to Naval Defense

With a long-established history of delivering high-performance technologies to both commercial and defense sectors, OII continues to be a linchpin in U.S. maritime defense strategy. The company's capabilities span subsea robotics, automated systems, engineered solutions, and complex offshore and underwater infrastructure.

By meeting and exceeding the rigorous standards of the U.S. Navy, OII reinforces its standing as an innovator and dependable partner in national security. Its commitment to engineering excellence, supply-chain integrity and lifecycle support ensures that the systems OII delivers are mission-ready and future-proofed.

Economic and Regional Impact

The Chesapeake-based execution of this contract will result in substantial economic growth for the surrounding region. OII is expected to hire across several disciplines, including precision engineering, systems integration, quality assurance, logistics coordination and project management.

Beyond job creation, this contract will generate ongoing business for regional suppliers and service providers, stimulate technical education and workforce development, and solidify Chesapeake’s position as a key node in the national defense manufacturing ecosystem.

Conclusion

The $33 million IDIQ contract awarded to OII for specialized Virginia-class submarine components marks a pivotal development in the continued modernization of the U.S. Navy. With production set through 2030 and oversight by the Naval Surface Warfare Center, this initiative represents a collaborative, forward-thinking investment in undersea warfare superiority.

Oceaneering’s unparalleled technical capability and strategic regional presence uniquely position it to fulfill the Navy’s specific demands. Through this contract, the Navy not only gains critical operational enhancements but also fortifies its long-term readiness in an increasingly complex maritime security landscape.

OII's Zacks Rank & Other Key Picks

OII has a Zacks Rank #2 (Buy).

Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 (SUBCY Quick QuoteSUBCY - Free Report) , which sports a Zacks Rank #1 (Strong Buy), Paramount Resources Ltd. (PRMRF Quick QuotePRMRF - Free Report) and RPC, Inc. (RES Quick QuoteRES - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Subsea 7 is valued at $5.49 billion. The company is a global leader in delivering offshore projectsand services for the energy industry, specializing in subsea engineering, construction and installation. Headquartered in Luxembourg, Subsea 7 supports both the oil & gas and renewable energy sectors with integrated solutions, including subsea infrastructure, heavy lifting and life-of-field services.