Posted on July 5, 2022
The Coast Guard reports that it has awarded a fixed-price incentive (firm target) contract to Austal USA, Mobile, Ala., to produce up to 11 Offshore Patrol Cutters (OPCs). The initial award is valued at $208.26 million and supports detail design and long lead-time material for the fifth OPC, with options for production of up to 11 OPCs in total. The contract has a potential value of up to $3.33 billion if all options are exercised.
The original prime contractor for the whole of the OPC program, Panama City, Fla., based Eastern Shipbuilding, in June 2019 submitted a request to the Coast Guard’s parent agency, the Department of Homeland Security for extraordinary contract relief after its shipbuilding facilities sustained significant damage resulting from Hurricane Michael, a Category 5 storm, in October 2018. In response, then Acting Secretary of Homeland Security Kevin K. McAleenan made the decision to grant extraordinary contract relief limited to the first four hulls.
Following that, the Coast Guard revised the OPC acquisition strategy “to mitigate emergent cost and schedule risk by establishing a new, full and open competition for OPCs five and through 15, designated as Stage 2 of the overall program. Informed by industry feedback received through a robust engagement strategy, the Coast Guard released a request for proposal Jan. 29, 2021, for OPC Stage 2 detail design and production. The Coast Guard’s requirements for OPC Stage 2 detail design and production were developed to maintain commonality with earlier OPCs in critical areas such as the hull and propulsion systems, but provide flexibility to propose and implement new design elements that benefit lifecycle cost, production and operational efficiency and performance.”
In addition to Austal USA, yards bidding for Stage 2 of the program included Eastern Shipbuilding, Bollinger Shipyards and HII.
“The Offshore Patrol Cutter is absolutely vital to Coast Guard mission excellence as we recapitalize our legacy medium endurance cutters, some of which are more than 50 years old,” said Adm. Linda Fagan, commandant of the Coast Guard. “The OPCs are the ships our crews need to protect our national security, maritime safety and economic prosperity. I look forward to the new cutters joining our fleet.”
In a stock exchange announcement, Austal USA’s parent Austal Limited said that construction of the 110-meter OPC’s will take place at Austal USA’s new US$100 million steel shipbuilding facility in Mobile, Alabama.
Austal Limited Chief Executive Officer Paddy Gregg said the new contract was the third steel shipbuilding program awarded to Austal USA and acknowledged the expanded capability of the shipyard.
“The United States Coast Guard’s new Offshore Patrol Cutters are an outstanding opportunity for Austal USA to further demonstrate the shipyard’s new steel shipbuilding capability; based on years of proven construction experience through the delivery of the LCS and EPF programs for the United States Navy,” Gregg said. “The Offshore Patrol Cutters are a critical capability in the United States’ homeland security and the Coast Guard’s most important acquisition program, and the Austal USA team is very excited and proud to be delivering this major shipbuilding program for the USA.”
Austal USA president Rusty Murdaugh said: “This contract award is the result of our continued investment in our people and our facilities. We are thrilled for the opportunities this will bring to our local community and our tremendous supplier base, as this program will provide our shipbuilding team the stability for continued growth.”
U.S. Senator Marco Rubio (R.-Fla.) was less thrilled.
“Today’s decision is short-sighted,” Rubio said. “When I visited Eastern Shipbuilding last year, I saw firsthand their commitment to building reliable, state-of-the-art ships. They have proven they can do the job and do it well. This decision will cost taxpayers more money and slow down the delivery of these critical vessels.”