Below is the announcement from Coast Guard headquarters. Some comments first.
The contract award, $208.26 million, does not actually include construction of the first cutter, presumably that will be included in the FY2023 budget. The potential value of up to “$3.33 billion if all options are exercised” equates to an average cost for 11 ships of $303M each. Keep in mind, that does not include government furnished equipment and other cost that go along with building new ships, including the precommissioning crew and its support and infrastructure improvements that may be required to accommodate these substantially larger ships.
Given that Eastern, builder of the first four OPCs, did not win the contract, and the contract allows “flexibility to propose and implement new design elements that benefit lifecycle cost, production and operational efficiency and performance” then we can expect to have A-class and B-class OPCs.
Considering that the Independence class LCS program is ending, this is an extremely important win for Austal and vendicates their decision to invest in steel shipbuilding.
Coast Guard awards contract for Stage 2 of the Offshore Patrol Cutter Acquisition
WASHINGTON – The Coast Guard awarded a fixed-price incentive (firm target) contract to Austal USA of Mobile, Ala. to produce up to 11 offshore patrol cutters (OPCs). 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.
In 2019, 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. Informed by industry feedback received through a robust engagement strategy, the Coast Guard released a request for proposal Jan. 29, 2021, for OPC Stage 2 detail design and production. 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.
“The offshore patrol cutter is absolutely vital to Coast Guard mission excellence as we recapitalize our legacy medium endurance cutters, some of which are more than 50 years old,” said Adm. Linda Fagan, commandant of the Coast Guard. “The OPCs are the ships our crews need to protect our national security, maritime safety and economic prosperity. I look forward to the new cutters joining our fleet.”
The 25-ship OPC program of record complements the capabilities of the service’s national security cutters, fast response cutters and polar security cutters as an essential element of the Department of Homeland Security’s layered maritime security strategy. The OPC will meet the service’s long-term need for cutters capable of deploying independently or as part of task groups and is essential to stopping smugglers at sea, interdicting undocumented non-citizens, rescuing mariners, enforcing fisheries laws, responding to disasters and protecting ports.
More information about the award can be found here.