Bid protest withdrawn, Austal USA gets go ahead for OPC stage 2

Written by Nick Blenkey
OPC Stage 2 cutter

11-ship OPC Stage 2 program is worth a potential $3.3 billion

The Coast Guard yesterday issued a notice to Austal USA, the offshore patrol cutter (OPC) Stage 2 contractor, to proceed on detail design work to support future production of OPCs. The Coast Guard issued the notice following the withdrawal of the bid protest filed in July with the Government Accountability Office (GAO) by Eastern Shipbuilding Group Inc. (ESG). Once that protest was filed, as is the norm in these cases, the contract with Austal USA was put on hold.

The Coast Guard says that on June 30, 2022, it awarded a fixed-price incentive (firm target) contract through a full and open competition to Austal USA to produce up to 11 offshore patrol cutters. 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 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.

ESG was the original prime contractor for the whole of the OPC program, but 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.”

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