WASHINGTON – The Navy on Thursday awarded Austal USA’s shipyard in Mobile, Ala., an expected $1.6 billion contract to build 10 high-speed military transport ships.

The work could be a boon to the company’s facility on the Mobile River, which has about 1,000 employees and has been waiting on a Navy decision for another lucrative contract that appears to have stalled.

The company was competing with two other shipbuilders, including Maine’s Bath Iron Works, for the transport ship work. The vessels – a joint project between the Navy and Army – are designed to move quickly in and out of conflict areas, transporting troops, cargo and vehicles.

Sen. Richard Shelby first announced the contract this week, although it wasn’t confirmed until Thursday afternoon.

“I am pleased that the Navy continues to recognize Austal’s tremendous shipbuilding capabilities,” Shelby said in a news release. “This award enhances south Alabama’s defense community and complements our state’s service to our armed forces.”

In a statement, BIW said it would continue to explore other shipbuilding opportunities.

“If nothing else, this once again highlights that competition is intense throughout the shipbuilding industry,” the statement said.

Shelby, a Republican from Tuscaloosa and influential member of the Senate’s Appropriations Committee, said the contract for the transport ship would allow Austal to maintain its work force in Alabama.

The Navy’s current acquisition plan calls for building 10 vessels between fiscal years 2010 and 2015, Shelby said. The first is slated to be delivered in 2011, the Navy said.

The ships will include a flight deck for helicopters and a ramp allowing vehicles to quickly drive off the ship.

Rear Admiral Willam E. Landay III, the Navy’s program executive officer for ships, said the transport ships are urgently needed and called it a good example of military branches working together on mutual needs.

Austal Ltd. is an Australian-based ship maker specializing in high-speed ferries and transport vessels. It opened its U.S. facility in Mobile in 1999.

The company also is part of a consortium competing to build a fleet of Navy combat ships. But that contract has been held up because of cost overruns, and it remains unclear who will win the work or how many combat ships will ultimately be built.