Orange's location at a bend in the Sabine River, adjacent to the immense virgin pine forests of southeast Texas, made it an ideal site for shipbuilding. However, by 1930 all of the easily obtainable timber was exhausted, and the associated sawmills closed. The Depression of the 1930s also weighed heavily on the population of Orange. In July 1940, Congressman Martin Dies and Vice-President John Nance Garner attached an amendment to a large general appropriations bill to build twenty-four surf-landing crafts and twelve destroyers in Orange. The Office of Supervisor of Shipbuilding, USN, Orange, Texas, was established at this time, with CDR. E.B. Perry as the first supervisor. The supervisor was responsible for directing the construction of the thirty-six crafts, and also the establishment of a shipyard in Orange to support the endeavor.
The facility was built on sixty-five acres at a bend in the Sabine River. Levingston Shipbuilding's tugboat and barge shipyard occupied a small portion of the west side, and the remainder was occupied by Consolidated Steel Corporation's steel fabricating plant, where the Office of the Supervisor was also located. On May 14, 1941, construction began at Consolidated Steel on the Destroyers USS Aulick and USS Charles Ausburne, the first two warships constructed on the gulf coast for
the U.S. government. In total, thirty-nine destroyers and 100 destroyer escorts were built at the Consolidated Steel Corporation yard during World War II. After the war, the Naval facility prepared ships for storage in the Naval Reserve Fleet as the United States Naval Inactive Ship Maintenance Facility.