Alabama-based yard in Coast Guard wins cutter contract fight

(The Center Square) – An Alabama-based shipyard that received a $3.3 billion contract to build up to 11 Coast Guard cutters has received a favorable ruling in federal litigation.

Chief Judge Elaine Kaplan ruled on Tuesday against Eastern Shipbuilding, which is building the first four Offshore Patrol Cutters. The Panama City, Florida-based shipbuilder sued after Austal USA won the follow-up contract for the cutters.

Eastern launched the first of the 360-foot cutters, the future USCGC Argus, on Oct. 27. The Coast Guard’s plan is to order 25 of them.

Kaplan listened to sealed oral arguments Aug. 3 in the U.S. Court of Federal Claims.

The chances of Eastern Shipbuilding overturning the decision weren’t the best. According to one analysis of U.S. Court of Federal Claims, only 9.7% of protests are sustained by the court. Eastern originally contested the contract award with the General Accounting Office, but removed that challenge to contest it in court.

Eastern is a newcomer to military shipbuilding, but says the four-cutter building program will create 10,304 jobs from 2016 to 2024.

Mobile-based Austal is the U.S. subsidiary of Australia’s Austal Limited and builds U.S. Navy Independence class littoral combat ships and Spearhead class fast expeditionary transport vessels, both primarily of aluminum construction.

Austal is building a new yard next to its aluminum one to build steel ships, such as four of the new Navajo class salvage ships for the U.S. Navy.

The yard is also contracted to produce modules for both the Virginia class nuclear-powered attack submarines and, more recently, the upcoming Columbia class nuclear-powered ballistic missile submarines.

Costs for the program, which is supposed to build 25 cutters to replace 28 aging ships, have increased 40% since 2012 according to a recent report from the General Accounting Office.

With the newest of the Coast Guard’s medium endurance cutters commissioned in 1991 and the oldest in 1964, it is the Coast Guard’s highest procurement priority.

Due to personnel shortages, the service announced on Oct. 31 that its enlisted workforce is 10% short and will decommission permanently three older medium endurance cutters, temporarily sideline seven 87-foot patrol boats for future reactivation and use 65-foot harbor tugs, which have icebreaking capability, during ice season.

In August, Eastern received a contract to build a medium hopper-type barge for the U.S. Army Corps of Engineers.