ARLINGTON, Va. — The head of the Coast Guard said production of the service’s Offshore Patrol Cutter construction is almost a year behind schedule due to damage from Hurricane Michael.
Commandant Adm. Karl Schultz expects delivery of the first of the cutters from Eastern Shipbuilding in 2023 with the next three to be delivered in succeeding years, he said speaking at a Navy League breakfast.
The service may know more about the way ahead following a meeting Wednesday in Baltimore with shipbuilders interested in bidding in the re-competition for a contract potentially worth $10.5 billion.
“Eastern has the right to re-compete,” he said. Schultz added the Panama City-Fla.-builder had to show that it can deliver the 21 cutters that would be needed.
Eastern has to show it still has the workforce available to complete the work, even if all the hurricane destruction was repaired. The storm displaced many residents of the area, and skilled workers were lured away to other jobs in the region.
“They have to be able to show us [they have] the workforce,” Schultz said. “Do they have the production capability.”
The Coast Guard awarded Eastern a contract in Sept. 2016 to build the future USCGC Argus (WMSM-915) with options to build up to nine OPCs. Eastern beat General Dynamics Bath Iron Works and Bollinger Shipyards to land the design and construction contract.
The re-competition is an extraordinary step but is designed to hold down costs and try to put the program back on schedule. Schultz said the delays could raise the price of the first four cutters by more than $650 million.
When they enter service, the new ships will be replacing cutters averaging about 50 years of age.
“We want to have a legitimate competition,” Schultz said in answer to an audience question.
The service’s chief acquisition civilian James Knight added, “we want to find out what we need to do to level that playing field” to draw interest from other shipyards. “We really need industry input to see where flexibility” can be achieved because “we get the benefits of that” in drafting the request for proposals that could go out this month.
In his remarks, the commandant said the Coast Guard sounded out “eight or nine companies” in its request for information on what comes next in the program.
“We think we have a pretty mature design” for the cutters, but “cost will be relevant” in deciding which yard or yards will receive the contract,” Schultz said.
“This can go a lot of different ways.”
He added, “Eastern has a reputation of building good ships. …Now they have to prove it.”