FierceHomelandSecurity is reporting a bill, H.R. 4005, out of the House Transportation and Infrastructure Committee (the Coast Guard’s traditional authorizers) that would set authorization levels for the Coast Guard in FY2015 and 2016. “No large spending increases under proposed Coast Guard reauthorization”
Their write up contained an unexpected and pleasant surprise,
“Among its provisions would be one authorizing the service to enter into a multiyear contract for procurement of Offshore Patrol Cutter ships. The Coast Guard and its advocates have a long-standing argument with the Office of Management and Budget over whether it should have multiyear funding for ship procurement. The Coast Guard contends it keeps the per-unit cost of new ships down; OMB prefers to have ships fully funded before the service lets a new acquisition contract.”
Congressional Researcher Ronald O’Rourke has been pointing out the advantages of multi-year contracts for years, “Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress” (pdf), Congressional Research Service, Ronald O’Rourke and Moshe Swartz, June 27, 2012.
Frankly, I had little hope it would be applied to the OPC, and only hoped it might be applied to the Fast Response Cutters, “Six More FRCs and Approval of Full Rate Production, Time for a Multi-Year Contract.”
It is hugely advantageous, in saving money for the American Tax Payer, and it eliminates uncertainty for both the contractor and for the Coast Guard. All the most successful Navy shipbuilding contracts are multiyear including those for both SSNs and Burke Class destroyers.
Now lets hope the bill becomes law and that a multiyear contract is awarded.