CG issues Draft RFP for Second Phase of FRC Procurement

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The Acquisition Directorate is reporting that they have issued a draft Request for Proposal (RFP) for a new contract to build Webber class WPCs.

It will provide for options of either four or six cutters per year for seven years. If all options were exercised the maximum number of cutters that could be built would total 42, but this probably will not be the case.

In February 2012, the Coast Guard exercised a $27.2M option to purchase the “Procurement and Data License Package” for the Webber class Fast Response Cutters, so the Coast Guard can allow other shipyards to bid to build follow-on ships of the same class.

25 September 2013, the Coast Guard exercised an option for six more cutters. This resulted in a total 24 Webber class built or under contract. I believe this was FY2013 money and we will see another contract to exercise the final option on the existing contract bringing the total to 30, which leads to a question. There is a statement in the RFP that I find difficult to understand, B.2.(b) “The total number of cutters obtained under this contract will be limited to twenty-six (26).” All along the program of record has been 58 of these vessels. The maximum number of vessels that can be funded under the phase one contract is 30 cutters so why limit this second contract to 26 when we have a stated requirement for 28 more? Does the Coast Guard plan on making a sole source buy of two ships in FY2015 and award this contract in FY2016?

Why preemptively limit the buy to less than the total of the options anyway. There might be a change of plans that would increase the Coast Guard requirement. The Navy might want to buy some using our existing contract, or the Coast Guard might want to make a Foreign Military Sale purchase on behalf of a friendly foreign government.

Despite being probably the best candidate we will ever see (a mature program with a proven product, approved by the Department for full rate production, that will continue for at least another five years), I saw no indication that a multi-year procurement was considered. I would hope that savvy ship builders would offer this as an additional option. It is still not too late for the Coast Guard to obtain Congressional permission to award a Multi-year Procurement for these ships. Or for Congress to direct this money saving procurement method.

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

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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