Six more FRCs and Approval of Full Rate Production, Time for a Multi-year Contract

File:USCG Sentinel class cutter poster.pdf

You may have already seen that the Coast Guard exercised a $250.7M option for six more Webber Class WPCs (Fast Response Cutters). I have seen it reported in six to eight different blogs. Here is the Acquisition Directorates (CG-9) news release. These will be units 19 though 24 of the class.

It is certainly welcome news, but I is worth remembering that this was not in the original budget request. A year ago I reported a similar event, the exercise of an option for six FRCs when only two had been requested in the budget. I called for a multi-year contract at that time.

Quoting the CG-9 news release, “This contract action follows the Sentinel-class FRC acquisition project receiving DHS approval to enter full-rate production Sept. 18, 2013.   Also known as the “Produce, Deploy and Support” acquisition phase, approval was granted after the cutter successfully completed Initial Operational Test and Evaluation (IOT&E).  This approval allows the Coast Guard to continue with FRC acquisitions.”

A year ago three vessels had been delivered, now we have seven. FY2014 is the last year of the current contract with Bollinger. In February 2012, the Coast Guard exercised a $27.2M option to purchase the “Procurement and Data License Package” for the Cutters so the Coast Guard now owns the design which would allow other shipyards to bid to build follow-on ships of the same class.

Everything is in place to make this program a multi-year procurement. We have a proven design that we wish to procure in fairly large numbers, 34 more over at least the next six fiscal years, and the Coast Guard owns the design. The Coast Guard can put the contract out to bid, if not FY2014, at least by in FY-2015.

All the most successful Navy ship building contracts (DDGs and SSNs) have been multi-year contracts.  These contracts are a win-win-win. The shipyard gets steady work that they can make a rational plan to fulfill efficiently. The service gets a predictable stream of new ships, and the nation saves from five to 15% on the cost of the assets. Its time the Coast Guard took advantage of this option.

File:The USCGC Margaret Norvell, delivered to the USCG 2013-03-21, but not yet commissioned.jpg

USCGC Margaret Norvell, USCG photo