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Coast Guard cutter program’s third phase could see rematch between Austal, Eastern Shipbuilding – Breaking Defense

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An Offshore Patrol Cutter still under construction sits at Eastern Shipbuilding’s shipyard. (Photo courtesy of Eastern Shipbuilding.)

WASHINGTON — A senior Coast Guard officer overseeing the Offshore Patrol Cutter program indicated he’d be open to working with either Austal or Eastern Shipbuilding Group for the third phase of the program, potentially setting up a rematch between the two companies with billions of dollars in work on the line.

“It’s very urgent we get those OPCs out there and I would take any strategy that would get us [the] ships,” Rear Adm. Chad Jacoby, assistant commandant for acquisition, told the audience Tuesday at an event hosted by the American Society for Naval Engineers.

The Offshore Patrol Cutter, a top acquisition priority for the Coast Guard, is a multi-mission vessel and will replace the service’s legacy medium-endurance cutters, which Jacoby noted are undergoing service life extensions to keep them operational until the OPCs are operational.

The Florida-based Eastern Shipbuilding Group in 2016 was selected to build the first four hulls in the class. Then, following a competition last summer, Alabama-based Austal USA beat out ESG and other contractors for the program’s second phase contract award to build the next 11 hulls.

That leaves potentially 10 more ships to complete the 25 anticipated vessels in the program of record. Jacoby said the service is planning to conduct a third phase for the OPC program but no timeline has been decided yet. When asked about the prospect of maintaining two contractors in the same way that some Navy programs do, Jacoby made clear his priority is getting the ships built and operational quickly.

“I’m always open to, in the future, if people are cranking out good ships and they make a case for keeping the production line going — I don’t know how that would play out on the Hill — but all I want is ships as fast as I can get them,” he said.

When contacted by Breaking Defense on Wednesday, Larry Ryder, vice president at Austal USA for business development and external affairs, said his company “is focused on delivering OPCs to the Coast Guard on time and on budget. We expect to continue to build OPCs to meet the Coast Guard’s full demand into the future.”

Joey D’Isernia, Eastern Shipbuilding’s president, told Breaking Defense his company is “very interested in any path” that would result in his company continuing to build more OPCs.

“We are the fastest and lowest risk option for the Coast Guard to get these critical assets online, but time is of the essence to keep our OPC production line hot,” he said.

To maintain delivery momentum, the company would need the OPC’s third phase to be expedited or for the Coast Guard to award ESG a fifth hull, according to another company official who spoke on the condition of anonymity. At the latest, a long-lead time materials contract for that ship would need to be awarded by the end of 2024, the official added.

Any Coast Guard decision on the third phase of the program is likely to attract attention on Capitol Hill. Following the phase two contract award to Austal, Florida’s congressional delegation in the House and Senate publicly took aim at both the Department of Homeland Security and Austal USA concerning allegations ESG made in a lawsuit filed in the US Court of Federal Claims, among other things. ESG had claimed Austal had an “unfair competitive advantage and conflict.”

In early November, the presiding judge ruled in favor of the government and Austal USA, which joined the case as an intervenor, according to court documents. However the judge’s opinion has not yet been made publicly available.

“We are disappointed in the court’s decision,” D’Isernia said. “Having just successfully launched hull one, and with hulls two, three and four well on their way, we remain convinced our shipyard is the lowest risk, best value, and most qualified to be building the Offshore Patrol Cutters.”

D’Isernia added, “After the OPC stage two decision was announced last year, we quickly pivoted our business development priorities to capturing our next large government shipbuilding program, or programs, and building back our esteemed commercial shipbuilding line.

“We have made huge strides on these growth initiatives. While we are ardent about sustaining the OPC production line for OPC’s, we stand as a critical asset for the Navy’s industrial base as they embark on the aggressive expansion of their future fleet,” he continued.

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