OPC Multi-Year Procurement-a Clarification

I have been made aware that the earlier post on this topic might lead to some confusion. Lets look at it in more detail. This is what the bill actually says about this,

“SEC. 215. MULTIYEAR PROCUREMENT AUTHORITY FOR OFFSHORE PATROL CUTTERS.

” In fiscal year 2015 and each fiscal year thereafter, the Secretary of the department in which the Coast Guard is operating may enter into, in accordance with section 2306b of title 10, United States Code, multiyear contracts for the procurement of Offshore Patrol Cutters and  associated equipment.”

First, it should be apparent that this applies only to the Offshore Patrol Cutter (OPC). This will not help with the Fast Response Cutter (FRC) program.

Second it refers specifically to section 2306b of title 10, the section governing muti-year procurements (MYP), which brings with it some specific requirements, one of which is that to be eligible for consideration for a multi-year procurement, the program must be  “stable.” In the case of shipbuilding, this usually means that the first ship is at least complete. That will probably be in 2020, by which time, at least the first three ships should have already been contracted.

There is a form of contracting that would provide many of the advantages of multi-year procurement (MYP) that can include these first few ships, this is Block Buy Contracting (BBC) as was used at the start of the Navy’s current submarine program, but that was not what was authorized.

Clearly the House Transportation and Infrastructure Committee wants to allow the Coast Guard to exploit potentially more efficient forms of contracting, but the potential of multi-year procurement of OPCs is still years away. If they want to realize savings earlier, they will need to authorize Block Buy Contracting for the Offshore Patrol Cutters and/or Multi-Year Procurement for the Fast Response Cutters.

There is another issue here also. That is the disagreement between the Department and Administration (in the form of OMB) on one side and the Coast Guard and some members of Congress on the other about what elements of the project must be funded before it is considered fully funded and a contract can be awarded. This is a funding approach question. and it is actually not directly connected to the contracting mechanism. Authorizing MYP does not resolve this disagreement. The Department and Administration’s apparent reticence may be symptomatic of a desire to delay committing, which would work against the long term commitment required for a multi-year procurement, but it should be obvious to anyone that while the final number of OPCs may be open for debate, the Coast Guard does need at least the eleven that are currently planned to be included (one contracted and ten as options) in the initial construction contract.

3 thoughts on “OPC Multi-Year Procurement-a Clarification

  1. Pingback: The 2015 Budget is Coming, Really it is, Maybe, Sometime | Chuck Hill's CG Blog

  2. Pingback: Could This Be the Start of Something Big? | Chuck Hill's CG Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s